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Since some people asked for it, I’m going to do a series on reading trading charts. The most commonly used type of chart is a Japanese candlestick chart, so we will begin here.
This is part 1
-Candles represent the price action that takes place in a specified time period. For instance, a daily chart, each candle (bar) represents the price action from a single day, even though the full chart will show many days of price action. The main timeframes I use are 15 minute, 4hr, 1d, 1w depending on volatility or what type of trading I’m doing.
-green candles close higher than they open. The bottom of the candle body represents opening price, the top is the closing price. The shadows (wicks) represent the high and low price for the period.
-red candles close lower than they open. The top represents the opening price, the bottom represents the close. The shadows (wicks) represent the high and low price for the period.
This is the most basic part of reading a chart, but a single candle contains loads of info. 11 replies
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