Today’s time many peoples and technician working with candlestick charts. a trader must have knowledge of candles for day to day trade and we have to understand that using of indicator along with candles is best interpritation of a trade, we will start with basics of candles:
there a two kind of candle in charts one is Grean or white and second one is Red or Black in colour. Green candle shows positive trend and red is used for negetive trend. a candle shows opening, high, low and closing price , by them a candle express movment of price, direction and price range.Th e value to this form
of charting is found in the fact that all pricing data for a session is easily identifi ed at first glance and that viewing a series of sessions helps traders easily identify momentum, direction, and reversal.
The attributes of every candlestick are defi ned in three areas:
1. Opening and closing price. Each session’s opening and closing prices are found at the horizontal borders
of the rectangular box for the session. Th e opening price is at the bottom of a white candlestick or at the top of a black candlestick. The closing price is at the top of a white candlestick or at the bottom of a black candlestick. The rectangular box is called the real body. When the opening and closing price are identical or very close, the real body is replaced by a horizontal line. Th is type of formation is among the most revealing of candlestick sessions and is called a doji (in Japanese, “doji” means “mistake”)
2. Trading range from high to low. The full trading range for each session is represented bythe upper and lower extensions from the real body. These are called the upper shadow and lower shadow (also called tails or wicks). The complete lack of shadow has significance in many candlestick formations, and an exceptionally long shadow also
reveals failed momentum by buyers (long upper shadow) or sellers (long lower shadow), signaling potential reversal of the existing trend.
3. Direction of movement. One of the most powerful visual attributes of candlestick charting is the ability to immediately see the overall direction that price is moving. While line charts and OHLC charts reveal direction through the shape and duration of each session, the candlestick short-term trend is easily spotted. A white candlestick reveals that the session moved upward, and a black candlestick reveals a downward-moving session.
long candlesticks often signal continuation or reversal. When the long body appears in the same direction as the existing trend (white in uptrends or black in downtrends) it indicates continuation. When the long session is opposite, it often serves as a signal of reversal. One form of the long candlestick is the marubozu, which has little or no upper or lower shadow. Th e lack of extension above or below the session’s open or close indicates exceptional strength in the direction the long session moves. This reveals which side (buyers or sellers) are in control of price movement and which side manages the momentum in price