Candlesticks are what currency traders look at to give them information about the session they are currently viewing.
A candlestick has 4 man components:
These 4 parts tell us a lot about the session we are viewing.
If a candle closes above the open price it is viewed as bullish. If a candle closes below the open price it is viewed as bearish. However this is not the whole story. The high and the low are also important because a candlestick may have had a very low, low but closed just below the open so whilst the candle is still bearish there will be a long wick to the downside. This could be a suggestion that sellers are exiting the market and price may move higher even though we just had a bearish candlestick. The reverse may happen with regards to a bullish candlestick.
Candles give us all the necessary information we need to enter and exit trades. They are the language of the forex market and understanding them is vital to your success within the forex market.
There are lots of patterns within the forex market some made up of a single candlestick, some need 2 candles, some 3 and in other cases there are large scale patterns requiring many many candles. But one all these patterns have in common is they all require candlesticks to be visualised and traded! Candlesticks are the single most important part of a forex chart. So don’t cover them up with a million and one different indicators!
We hope you enjoyed this brief introduction to candlesticks – Interested in our EA services? Why not get in touch with us and see how you can get started!
Look forward to hearing from you soon and thanks again for reading.