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Japanese Candlestick Charting

Japanese Candlestick Charting

Methods of reading the Japanese candlestick charting:

For the junior traders, it may difficult to understand the platform, especially the graphic presentations and the Japanese candlestick charting which has tremendous amounts of figures, colors, and numbers. In fact, once you understand the program, you will then be able to easily use it and realize that it has been designed to help your success. The graphics of any trader are termed “Japanese candlestick charting”, and in the following article, you will find a detailed description of the first steps towards freedom of the technical analysis.

 

What is the Japanese candlestick charting?

The Japanese candlestick charting is the most popular graphics among all traders which enable them to determine the price trends of the financial product. The basic structure of in the Japanese candlestick charting takes the form of “candlestick” . for example, for the daily graphic each candlestick represents one day, and for the hourly graphic each candlestick represents one hour. In our example, the red candlestick refers to a declined value of a pair of currencies, whereas the green candlestick refers to an increased value of the pair of currencies. The main body of the candlestick represents the opening and the closing values. If we have a closer look at the green candlestick, we will see that the opening value was 1.50 whereas the closing value was 2.90. The values are given in the upper part and the lower part of the candlestick (3.10 and 1.20) represent the value to which the financial products have reached (These values differ from the opening value or the closing value) during the specified period of time.

 

Graph -1: the descending candlestick and the ascending candlestick:

The descending, ascending and the stable trends:


The Japanese candlestick charting may move upwardly or downwardly, or may else remain stable. The graph-2 is an hourly graph for a pair of currencies (AUD/USD) from the 9th to the 16th of January. The graph shows that from January 9th to January 13th the pair of currencies has increased to the level of 0.9084, and has decreased thereafter to the level of 0.8774 on January 16th. The green line represents the ascending trend, while the red line represents the descending trend, with the horizontal blue line representing here the state of stability between January 9th and January 10th. As shown in the graph, the trading in the pair of the currencies took place at the level 0.8930 in these dates. The ascending trend usually benefits the traders involved in purchase transactions, while the descending trend benefits those traders involved in sale transactions.

 

Graph-2: The ascending, descending, and the stable trend:


As you know, the Japanese candlestick charting may somehow be confusing, but once you understand the mechanism thereof you will see that it is an easy and effective means of tracing the values of the available instruments. Through this article, you will get a wonderful start for comprehending the technical analysis and will hence be able to determine the market trends and the future opportunities. These aspects will increase your chance of making profits, and will also allow you to do well with the graphics and the additional tools.

 

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