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One of the traders aids in developing formulas of candlestick charts are the candlestick patterns. This can be accessible when producing simple systems that will brief you when a trend is emerging so that you can start a trade.
The type of the candlesticks refer to the high, low, open and closing price of stocks, currencies or commodities during a specific period. You can basically mark the duration that you want to show.
Day traders typically choose 5 minutes although 15 minutes could be your choice for specific cases. For longer duration trading you can choose longer periods.
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The body of the candle characterizes the difference between the open and close points. If it’s green/blue (for colored charts) or white then the lower boundaries of the rectangular body is the open and price went higher during the respective period. If it is black (or red on a colored chart then the opening price is the top boundary and the price tumbled.
In candles, vertical lines poking up from the top and down from the bottom are called wicks. The top of the upper segment of wick is the highest position that the price ever hit during the period. The bottom of the lower wick is the low.
The trader can conclude spontaneously the price behavior from this analytical method. A white or green candle manifests a rising price or bearish tendency and a black or red candle symbolizes a crumbling price or bullish tendency.
You can also inspect at a glance how the highs and lows ascribe with the opening and closing market prices. Then you may have an entirely concrete candle without a wick.
The name for this is Marubozu pattern. This signifies that the opening and closing prices were never approached in either direction by the low and high prices.
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The opening was the high price or the closing was the low price if the candle was red or black. If it is white or green, the opening value was the low and the closing value was the high.
A longish body means a relatively consistent movement either up or down. A reversal is marked by a long wick on the top or on the bottom.
For accurate trend index a candlestick needs to be considered in conjunction with the others that preceded it. Then you can devise more complex candlestick patterns signifying the anticipated trends to come.
Disclaimer: Foreign Exchange trading can be dangerous, can end up in material losses, and is not right for every person.