04 Aug, 2017

What is the role of Candle Sticks in Trading, and how candles have been creating..?

Role of candlestick in trading

Candle stick determines the point to which we have to trade, gives the opening, closing high & low price of our trading. According to trading formation of candlestick is very important. It determines the entry & exit point of trading, also the mood of the market so it provides our success point. In each trading the formation of candlestick is different, because it depends upon the time frames that we select for trading. Each candle forming according to the time frames that we select. For example if we select 5 minute time frame then the formation of candles happen in five minute.

The other benefit of candle stick is that you can get the correct point of sell/buy in trading. Its shape varies according to the price variation. Sizes of candles indicate the stability of the price. Example if a candle has long size it is stabile price, that type of candles is rare. We can see that when we check the market.

Mainly there are three types of candle stick, we can see in market chart. They are Bullish candle, bearish candle & doji candle. Bullish candles are formed in the uptrend of market & bearish candle forms in the down trend of market, are same in size like a rectangular piece. They also predict the market movement before moving starts. Bullish candles predict the uptrend of market & bearish candle predict the down trend of market. It is very helpful for us that the pre determination of market movement. Bearish candles are in red color & bullish candles are green in color. Doji candle are formed when the open & closing price of chart is same. Its size is differing from others. It looks like a cross or a plus sign.

There are some similarities with each candle is that one candles close value is the next candles open value.  So we can trade the close value or open value of next signal after the signal come. We can see sticks on the up & down of the candles. Rectangular portion called body & stick portion called shadow. High price is marked by the top of the candle shadow & low is marked by the bottom of the candle shadow.

Candle stick chart is more accurate than other charts; it gives the correct minute point of price. So most of the traders prefer candle stick chart. Candles shape has some difference from each other, some is wide rectangular, some is thin rectangular depends upon the price.

In my opinion it is clear that follow candle stick pattern is better & easy in trading compared to other. It is a tip to fresher compared to other complicated charts. We can predict the entry & exit point of trading through a candle stick very easily. Also can predict the future movement of trend line, it is very helpful to us to exit from the sudden movements of market without achieving large loss in trading.  So candlestick plays an important role in trading.

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