Candlestick charts offer a whole lot more information than your typical bar chart. This type of chart shows highs and lows, and opening and closing prices, but also shows where the body of trading volume took place. The great thing about candlestick charts is that they can be color coded so that you can easily see whether the price went higher or lower. A hollow candlestick reflects an increase in price while a black candlestick lets you know that the price went down. If you want to use a candlestick chart for your currency trading, you are not alone. Candlesticks are popular amongst forex traders but can be used for any financial instrument that changes in price.
Candlestick charts are just as versatile as other types of charts; you can use them for any time frame, whether it be a five year period, or up to the minute. Forex traders like these charts because they are quick and easy to use and work well with the Oracle Trader. This type of chart has also been around for a long time—there are many patterns that have been established over the years that are known to predict just where a price will go in the future.
The most important thing to remember about candlestick charts is that they need to be modified to fit your specific time frame. If you are a large volume day trader, you will want to look at a shorter time frame, maybe even minute by minute charts. The wonderful thing is that you don’t have to memorize a whole bunch of different patterns for each time frame you wish to trade. The patterns that have been established over the years transcend any specific time frame and can be used interchangeably.
