Evolution of Charts

How Long Does it Take to Make Candles? – Technical Analysis


Jul.19.2013

In my previous piece I introduced candlestick charts. Now you might be asking, how long does it take to make candles? Here is the good news: we don’t actually need to get up and buy wax, wicks, and colors to make candles for forex trading. The platform that you downloaded (and that I hope is open on your computer right now as you read this) does all the work for you.

Get my updates. Free.

 

How Long Does it Take to Make Candles?

You can play around with the time tab on your platform, checking out candlestick charts with candles that were made in 1 minute, 5 minutes, an hour, a day, or even a month. The longer it takes for a candle to form, the less information you will have about the price movements in shorter periods, but the chart will give you a better idea of the general movement of the market.

A candlestick chart that is set to 1-min, shows almost immediate price actions in the market and is perfect for day traders, while a monthly chart is mostly used to analyze the general and long-term direction of the market.

Become the master of trading! Get Invest Diva's books NOW!

Invest Diva Books Ichimoku Secrets Guide to Making Money in Forex

Now let’s take a look at one bearish candlestick picked from EUR/USD monthly chart and see what secrets it reveals about the pair’s movements during one month:

How Long Does it Take to Make Candles? How Long Does it Take to Make Candles?

Now answer these questions:

  1. What was the price of 1 euro on the first trading day of the month?
  2. What was the highest price of euro during the month?
  3. What was the lowest price of euro during the month?
  4. How much was 1 euro on the last trading day of the month?

Answers:

  1. EUR/USD opened at 1.42195 on the first day of the month. That means that you had to pay $1.42195 to buy 1 euro.
  2. 1.45555 was the most expensive the euro got during the month
  3. 1.31800 was the lowest price of euro against the dollar during the month
  4. The pair closed at 1.35265 on the last day of the month

Exercise

On your demo trading platform, set the currency pair to EUR/USD on the Candlestick chart, then play around with the time period and check out where the currency pair has been in different periods. First check the 1-min chart. Then check the 5 min chart. Then look at the 15 minute chart, the Hourly chart, the 4-hour chart, the weekly chart, and the monthly chart. Which one gives you more insight into the most recent price actions? Which one gives you a longer-term view?

Get my updates. Free.

 

Related:

 

Tips and Tricks about Forex Trading

Back to Top

Learn How to Grow Your Wealth