Candle Charts – Technical Analysis with Candlesticks

Candle charts were the next generation trading platform visuals after bar charts. Bar Charts were popular for a while, but just like our phones need an upgrade for cuter colors and better shapes all the time, the charts needed to be upgraded too. And just as most upgrades and improvements are done by the Japanese, this time too, the artistic touches to the Bars is believed to be done by the Japanese; but not recently and not by a Japanese forex trader.

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The Candlesticks chart was actually developed by a Japanese rice trader in the 16^th century. We don’t mind the outdated development and will go on to read more about the candles because we all like pretty, colorful and romantic stuff.Many of us girls have grown up with candles around us, and many of us probably have experimented candle making in middle school. Sometime later in life we discovered that making our own candles – of all shapes and sizes – gives us more satisfaction than the ones that we buy in TJ Maxx. And now here we are, bringing candles into forex trading. So let’s get to business and learn how to make candles.

The idea behind candlesticks in forex trading is simply filling the area between the open and close prices with “wax.” The vertical line between the open and close prices can be considered the wick inside the candle, and the extra wick that comes out of the top and bottom of the candle make the high and low prices in the specific time period that candle was made.

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In the forex world, the wicks coming out of top and bottom of the candle are called the Upper and Lower Shadows.

The next exciting step in our candle making is adding colors (We would have loved it if we could add fragrance too, but currently computers with smelling abilities are not invented yet.)

On the forex trading dance floor, only two colors at-a-time are allowed for the Candlesticks.

Colored Candle Charts – Red and Blue

One for the rising candles and one for the falling candles. You can choose black & white, pink & yellow, green & red or whatever you want. You can do this by clicking on the “settings” button on your trading platform.