Candlestick Stock Charts foir Beginners

Stock Charts for Beginners - What are Candlestick Chart Patterns ?

Candlestick charts were developed many hundreds of years ago by Japanese rice traders, on the stock market they are used to show the high, low, open and close of a share price and connect the high and low of the time period being studied with a thin line. The open and close are represented by the body of the candle, which is shaded a different color depending on whether the closing price was higher or lower than the opening price. In candlestick software packages usually if the close is higher then the body is white, if the close is lower than the open then the body is black (sometimes green and red are used instead).

Investing in Stocks for Beginners is made easier by candlestick patterns which show what the supply and demand was for a particular period and show whether buyers or seller were in control. Long white candlesticks mean that buyers were in control whereas black candles show that sellers were in control throughout the period in question (this may be five minutes, five days or a month etc...).

Long wicks show that there was a lot of action but at the end of the period the closing price was close to the opening price. If the body is at top with a wick at the bottom this means that the sellers were in control at the beginning but the buyers got control towards the end of the period. If the body is at bottom with a long wick at the top then the buyers were initially in control but then sellers took control at the end of the period.

Short candlesticks means that there was no action or that there was a battle between buyers and sellers but that neither won. If short candlesticks show up at top of a long uptrend or downtrend then it can show a change in the trend.

Check out the short youtube video on candlestick chart patterns by informed trades .com for more details

For more on technical analysis see stock charts for beginners

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