Japanese Candlestick is defined as a cost plotting method that provides a fast and simple method of identifying the cost movement of a pair of currency. This particular technique has been utilized in Japan for millions of years and is now being used in the West. Most of the Forex traders utilize candlesticks for cost predictions as it rapidly shows power and action of bears and bulls over cost of a pair of currency.
There are generally two ways for using Japanese Candlesticks. First important way is to go through the display of the data in a single candlestick. Second process is design identification procedure of utilizing the candlesticks in specific combinations. This specific tutorial focuses on information attainedfrom a specific candlestick. You will note that a single candlestick offers useful information to trader.
Important parts of the Japanese Candlestick
Body is known as thick part of candlestick. It signifies range between the closing and opening costs of the period. The specific positions of closing and opening costs will alter based on whether the specific period was bearish or bullish. If body is clear or white, the pair of currency experienced a bullish time period. On the contrary, if body gets filled up or remains black, the pair of currency experienced a bearish time period. The width and length of body will alter every period of trading.
Shadows are defined as thing lines below and over the body. They signify low and high prices for a specific period. Length of shadeswill alter each period of trading. There are times when you will not find any type of shades. Sometimes, there may be a shadow over and below a form.