Forex Candlestick Charts

Rising in popularity amongst currency traders, Forex Candlestick Charts pack a large amount of data in a small space. Quite similar to the forex bar charts, the only difference is that it contains price direction information. Read on to know more about Candlestick charts.

The currency exchange Candlestick charts consists of the body and the shadows, made by the opening and the closing price in the forex market. When the opening price is lower than the closing price the body is left blank or white. When the opening price is higher than the closing price the body is filled with color, usually black. Depending on the trading platform, certain Currency Candlestick charts have prediction qualities. Often, you will come across Forex Candlestick Charts filled with color (red/green) to make it more attractive and easier to read than the traditional black and white.

Consisting of the same four primary price points: the high, the low, the open and the close, the forex trading Candlestick charts are considered easier to view and analyze than as over the other charts in forex. If the high and low prices are located beyond the open-close range, they are marked by two lines known as the upper and lower shadows. Protruding from the top of the candlestick's body and marking the high price for the given time period represented by the bar, you will see the higher shadows. Conversely, you will see the lower shadow protruding from the bottom and marks the low price.

The price is measured along the vertical axis of the chart, while the time along the horizontal axis. With its roots of origin in Japan, it is a type of box graph and often has several additional symbols attached to it to convey other bits of information.

The purpose of candlestick charts is strictly to serve as a visual aid. There are several advantages of candlestick charting. They are easy to interpret, and are best for a beginner in forex. Being easy to use, traders adjust almost immediately to the information in the bar notation. Having cool names such as the shooting star for the candlestick patterns have is another attraction for they are easy to remember and thus recognize.

Now that you can easily understand why currency exchange candlestick charts are so cool and popular with the traders all across the world. If you are a beginner you can start with practice trading using forex trading Candlestick charts and do so until you understand the behavior and functioning of the forex market.