Candlestick Forex
The oldest charts used for price prediction are the Candlestick charts. Way back in the 1700s a legendary rice trader used Candlestick Charts as a way to predict the price of rice. These charts are versatile and dynamic and so they are very popular in forex trading.
These charts are colorful, unlike typical charts and the colors define different nature of price movement. High, low, open and close are the four prices of the most importance. The body and the shadow are the names of the two parts that make up each candle as each period is shown by the open and closing price which is seen on the body. The body can change color from white to black and this represents differences in prices. The shadow then tells the intra-period of the high and low and tells of the amount of time has passed, be it minute, hours, days or weeks.
These charts are easy to read, shows the direction of the trade, its strength and can be combined with other technical indicators.
