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One of the important indicators that aid traders decipher candlestick charts are candlestick patterns. Candlestick patterns are valuable for making effortless systems that will advise you regarding the compilation of a trend in order for you to start trading.

The shape of the candlesticks refer to the high, low, open and closing price of stocks, currencies or commodities during a specific period. The period covered is typically user selectable.

Day traders usually choose 5 minutes although 15 minutes may be your choice for certain cases. For longer period trading you can opt for longer periods.

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The candle body defines the diversity of the close and open points. If it’s green/blue (for colored charts) or white then the lower borders of the rectangular body is the open and price went upwards during the particular period. Should it be black or red in charts with color, the top border indicates the opening market price and during that period, the price moved down.

In candles, vertical lines sticking up from the top and down from the bottom are called wicks. he highest position the price ever hit is the top of the upper wick portion. The low is the bottom of the lower wick.

This kind of analysis assists the trader to know at a glance if values tumbled or shot up during the analysis time frame. Bearish tendencies or rise in price are depicted by green or white candles while bullish tendencies or fall in price would be pointed out by red or black candles.

Aside from this, the high and low comparably to open and close prices are rapidly obvious. You might have a candle that is extensiovely solid, sans the wick.

This is known as the Marubozu pattern. Prices never went more or lesser than the opening and closing prices in this scenario.

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he high value as opening price and low value as closing price is represented by the red or black candle. The low price was the open and the close is the high price when the candle is green or white.

A relatively even upward or downward trend is defined by a long body. A lengthy wick situated on either bottom or top would imply a reversal.

In conclusion, to ensure accurate trend reading, candlestick must be read within the context of the preceding candlesticks. Then you can conceive more complex candlestick patterns demonstrating the anticipated trends to come.

Disclaimer: Currency investing is not risk free, can result in material losses, and is not suitable for everybody.