Japan was the first country to use candlestick charts over a century before the other two kinds of charts were developed on the rest of the planet: point-and-figure and bar charts. Such types of charts concentrate on how the feelings of traders impact the market. As a trader, you can make assumptions about such trends that help you forecast the short-term trajectory of rates.
About candlestick charts
When it comes to its parts, the candlestick chart is not that far from the bar chart. It also requires a market that is high, low, open and close price throughout the day. Much of the candlestick chart is considered the “real body.” This is the pricing range between open and close prices. If it is filled in, it means that the close price was better than the open price. It’s the other way around when it’s blank.
The sections below and above the “real body” are considered the “shadows.” They’re showing high and low rates for a day, and they can be long or short.
Bar charts and candlestick charts
Apart from how they appear, there are not many variations between the candlestick charts and the bar charts. They both display the same details. The greatest aesthetic distinction between them is that the candlestick charts are more vivid and physically impactful.
When it comes to the trends used by a candlestick chart, produced by price fluctuations, they are either bullish or bearish. A bullish trend suggests a price that is expected to rise. A bearish one indicates a price that is expected to decline. However, traders can never take these behaviors as promises because that is not their function.
There are many trends to keep a close eye on, but these two main ones are the most important to remember.
Candlestick charts have been developed to support traders with their attempts to make more effective efforts. As the Japanese have learned, feelings influence how the price of an asset varies. These charts help traders get an understanding of what could happen soon.
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