Candlesticks Calculator

Candlesticks Calculator Tools

Candlestick Charts

Candlestick charts are a popular tool used in technical analysis to visualize the movement of financial instruments, such as stocks, currencies, and commodities.

They are widely used by traders and investors to understand market trends and identify potential trading opportunities.

History of Candlestick Charts

Candlestick charts were developed by Japanese rice traders in the 18th century. These traders used candlesticks to represent the price movements of rice in the futures market. The basic idea behind the candlestick chart is to represent the price movement of an asset over a period of time in the form of candles.

How To Understand Candles

• Each candlestick represents the price movement of an asset during a specific period of time, such as a day, a week, or a month.
• The candlestick consists of a body and two wicks, also known as shadows.
• The body represents the opening and closing prices of the asset, while the wicks represent the highest and lowest prices reached during the period.

Types of Candlesticks

Bullish Candlestick

A bullish candlestick is formed when the closing price is higher than the opening price.

Bearish Candlestick

A bearish candlestick is formed when the closing price is lower than the opening price.

The color of the candlestick varies depending on the trading platform and is usually green for bullish candles and red for bearish candles.

Important Points Of Candlestick

1. The length of the body of the candlestick represents the difference between the opening and closing prices.
2. If the body is long, it indicates a strong price movement, while a short body indicates a weak price movement.
3. The length of the wicks indicates the volatility of the asset. The longer the wicks, the higher the volatility.
4. Candlestick patterns are formed by a combination of one or more candlesticks.
5. These patterns are used to identify potential trading opportunities and to confirm market trends.
6. There are several types of candlestick patterns, including reversal patterns, continuation patterns, and indecision patterns.

Reversal Patterns

Reversal patterns are formed when the price of an asset changes direction after a trend.

• Hammer
• The shooting star
• The engulfing pattern
• The doji

Continuation Patterns

Continuation patterns are formed when the price of an asset takes a short break before continuing in the same direction as the trend.

• The triangle
• The pennant
• The flag

Indecision Patterns

Indecision patterns are formed when the price of an asset moves within a narrow range, indicating that the market is unsure about the direction of the asset.

• The spinning top
• The harami

By understanding candlestick patterns, traders can identify potential trading opportunities and confirm market trends.

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