Note the picture below. This is called "Candlestick Chart" because of its shape is like a candle. This graph is taken from Netdania (www.netdania.com), a provider of realtime chart for forex. In addition there are many providers Netdania other charts that can be accessed for free without paying a dime. Each provider has a chart and it looks different from each other. Not a problem according Belajarforex because if we can use a single platform should also chart other platforms requiring only minor adjustments.
This graph was made in the 17th century by the people of Japan that was originally used to monitor price movements on commodity products. Steven Nison is known as the first to popularize this model chart. Very representative because it consists of High, Low, Open and Closing Price makes the most popular chart used by forex analysts. If you are unfamiliar with security products, this graph is never used to monitor the price. Why?Simple, requiring only the price of the securities closing price just is not like in forex trading.Actually there are more types of charts such as bar charts, dot charts, line charts, and more. But the candlestick is more widely used by traders because it looks easy to read alias representative.
Pictured above is a graph of the exchange rate of EUR / USD. If you see a dotted blue line on top of it is the last price on the value of EUR / USD is at 2.0052 means that the EUR price of USD 2.0052 (remember how to read a quote that is never explained in the previous module). See also the small print at the top left that says "M15 = minutes 15. That means one candle (one bar) represents the price movement for fifteen (15) minutes.Candlestick interpretation based "pattern" that is. Candle is green means the price goes up or closing price of greater value than the opening price. Instead, a red candle means the price goes down or clsoing price lower in value than the opening price. Then what vertical lines above and below the candle that? That is the highest price and lowest price during the given period. In the example above is the lowest and highest price for each hour for the period used is per-hour.
If using the term Bullish and Bearish then the green is a bullish pattern and the red ones are Bearish pattern. For more details see the image below:
Do not be surprised if you see a different color for the second price above eg blue with red. Not a problem, depending on each provider in providing the color chart.Now consider the image below:
This is a candlestick for the GBP / USD 1h chart using the period (ie 1 Candlestick represents the movement for 1 hour). Axis "X" in particular the part that I put a red box is a clock movement that was about to be discussed. The clock showed 09.00 and 10.00, which means Candlestick thereon represent movement from 9:00 until 10:00, the images shown by the red candlestick. Here's how to read it: At 09:00 price opened at 1.9987 and then at 10:00 the price closed at 1.9970.
Then followed by the next green candle from 10.00 to 11.00, the price opened at 1.9971 and then closed at 1.9974 at 11:00, so forth and continue to other candle.
Now the question arises, whether the opening price must be equal in value to the closing price on the previous candle? No. Not necessarily, and indeed it often happens that the opening price is different from the closing price on the previous day. This often occurs when passing days off (Saturday and Sunday) is if there are special events. Inequalities are usually called "gap." Gap is often used by technical analysts to predict prices.
For more details see the image below:
The discussion of the gap will be separated from this article because it offended the technical analysis and quite spacious. For the time being it is enough for us to be able to read candlestick before knowing technical analysis. Do not forget to read other articles on this website to deepen your analysis capabilities.Well, now you already know the key to forex charts reading was at least able to feel the direction of price movement. Perhaps you're thinking: "Gotcha! Finally I was able to open a real account! Woo hoo ... "
Wait a minute. Can not read it yet can certainly benefit. Continue your forex school to complete before you decide to open a real account. See you at the next class.
We will begin studying technical analysis! Yippee. Prepare your brain men!
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