Candlestick Charting Forex Trading

Candlestick Charting Forex Trading
Candlestick charts are about a hundred years. They are often called "Japanese candles" because the Japanese would use to analyze the price of rice contracts.
Similar to a bar chart, candlestick charts also display the open, close, daily high and low day. The difference is the use of color to show if the stock went up or down during the day.
The table below is an example of a candlestick chart for AT & T. Green lines indicate the share price rose, red indicates a decline. (Beware of the disparity between U.S. and Taiwan in the use of colors to indicate the stock price increase or decrease in Taiwan, we use red to indicate the stock price rose and green to indicate the price cut.)
Investors seem to have a "love / hate" relationship with candlestick charts. People either love them and often use them, or they are completely excluded from them.
There are several ways to look for with candlestick charts - here are a few of the popular ones and what they mean:


This is a bullish pattern - the stock opened at (or near) its low and closed near its high.
Contrary to the model above, this is a bearish pattern. It shows that the stock opened at (or near) and dropped significantly its high to close near the low.
Known as the "hammer, this is a bullish pattern only if it happens after the stock price dropped a few days.
A hammer is identified by a small body, together with a large range. The theory is that this model can be shown that a reversal in the downtrend is in the works.
Known as the "star". For the most part, stars typically indicate a reversal and / or hesitation. There is a possibility that after seeing the star will twist or change the current trend.
Keep in mind that there are more than 20 other models use technical analysts candlestick charting. Now, let's look at a more traditional style of charting stock price performance, known as point and figure charting.