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Candlestick And Other Trading Chart Patterns

Candlestick And Other Trading Chart Patterns

By on Aug 24, 2016 in Basic Trading Chart Patterns, Make Money With Binary Options |

Candlesticks are parts of a binary trading chart, displaying the opening and closing price of an asset together with its range that is represented as a candle wick. Candles are aligned on the trading chart, providing the information about the assets, and they can a significantly higher amount of information than a regular linear chart. If you want to learn about best binary options brokers go to the review and start trading.

These are the basic parts of the candles:

The Bars – every candle looks like a rectangle, which indicates the price of the stock and whether it closes above or below the initial price. Candlesticks are usually green or red – green bar means that the asset closed the trade higher than the initial price, and red bar means that it closed the trade lower than the initial price. The size of the bar determines the movement of the asset’s price from the time it opened to the closing time.

Which_Chart_Type_Is_Best_For_You_body_Candlestick_Chart_next_to_Bar_ChartThe Wicks – also called shadows, the wicks are the lines on top and bottom of every candlestick. They represent the highest and the lowest point reached by the asset’s price in a particular period of time. Naturally, the top wick represents the highest price, and the low wick represents the lowest one.

Candlestick chart is a useful tool in binary trading, because if you know how to read it, you can make very accurate predictions for the future market movements and thus increase the success of your trading. You can get trading charts on many websites and through software installation (which usually proved better charts). Also, all of the top binary options brokers should provide you with a very good trading chart when you make an account and start trading. There are several other chart patterns you may encounter:

Doji – this is a single candle that shows little change between the opening and closing prices, therefore forming a cross shape. It shows that there is some delay on the market, but may be an indicator of the change that is going to occur.

bearish-engulfing-candlestick-patternEngulfing – when a candle with a small body gets followed by a candle with a larger body, it is said that the second candle engulfs the first one. This is usually an indicator of a bullish market of an asset.

Morning Star – when a candle with a short body finds itself between two candles with long bodies, at the bottom of a downward trend. This is the indicator of the market that is turning bullish.

Shooting Star – this is a candle with a short body and a long shadow that occurs between the shadows with longer bodies on the top of the upward trend. Opposite of the Morning Star – this candle indicates that the market is about to turn bearish.

Spinning Top – this is a candle with both long wicks and an open and close price near each other. It indicates big uncertainty in the movement of the asset’s price.

The Hammer -this is the candlestick that has a long lower wick and a short body on the top. It shows a large move to the low side after opening the trade with the asset. There is also the Inverted Hammer, which has a long top wick and a short body on the lower side, and it shows the opposite direction of the price that The Hammer.

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