READING CANDLE CHART

In the world of trading, in general, when people talk about the technical analysis which first comes to mind is a graph (chart). The technician usually are using the chart because it is the easiest way to visualize the data of price movements over time. You can use the help of charts to determine trends and find patterns that could potentially lead you achieve incredible opportunities.

There are three types of charts in technical analysis, which will be explained one by one.

1. Line chart 
Line chart is a graph of the simplest depicted as a line connecting the closing prices. For example: in a few consecutive days trading closed at 100, 200, 150, 250 ... the price levels are connected by a straight line. With this graph we can see the general price movement within a specific time period.

Examples are like this:

2. Bar chart 
Bar chart is slightly more complicated than the line chart. This type of chart provides information on the opening price, closing, highest and lowest prices within a certain time period. Because it has such information, this chart is also called OHLC chart (Open-High-Low-Close). The following is the basic form of a bar chart:

bar chart

The lower end of this chart is the lowest price ever traded within a specific time period, while the upper end is the highest price. The vertical lines represent the range (range) price within that time period. Small horizontal line that is left is the opening price, while that on the right is the closing price. In the above example, the opening price is lower than the closing price. However, the opening price may be higher than the closing price.

Examples bar chart in the chart is as follows:

In simple terms we can say that the bar is a period of time, whether it be one month, one week, one day, one hour, or even minute. Depending on the time frame of how long we plot the chart.

3. Candlestick chart 
Named "candlestick" because it looks like with a candle. His full name is "Japanese canclestick chart", because it is said he was from the country Sakura.This type of chart provides exactly the same information with a bar chart, only "posture" the body more "sexy".

candlestick chart

Normally, the body of the candlestick chart is white and black. If his body is white then open its prices are below, otherwise if the black body is above the open price. So, the body itself describes the distance between the opening price at closing within a specific time period.

If the open price below the price closes, then commonly called a bull candle. In technical analysis, the term "bull" or "bullish" is used to describe the movement of price rises. To illustrate the movement of prices down, used the term "bear" or "bearish", resulting candlestick has open price above the close price is called bear candle. Use only "mnemonics" This is so much easier to remember: BULL = rose, BEAR = down ,

But if you consider black and white is less "stylish", or lack of interest to you, then you can replace it with the color you like. Other color combinations are often used example is the red to the blue bear to bull candle and candle. Remember, you'll spend more time observing the chart, so that the colors that appeal to you will help relieve boredom. The important thing, you know how to differentiate between a bull candle with bear candle.

Let's see an example of a candlestick following:

How, more interesting is not it? Or you have another color choice? Please express "color" you. Many traders prefer to use this type of chart because it helps visually to recognize the open, close, high and low than bar charts.

Below is an example of the graphical display of price movements using a candlestick chart: