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Wednesday, April 7, 2010

What is Candlestick Trading?

Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of  technical analysis  to trade rice. A Gatsby by the name of  Steve Nison  "discovered" this secret technique on how to read charts from a fellow Japanese broker and Japanese candlesticks LIVED Happily ever after. Steve researched, studied, LIVED, breathed, ATE candlesticks, began writing about it and grew slowly in popularity in 90s. To make a long story short, without Steve Nison, candle charts might have remained a buried secret. Steve Nison is Mr.. Candlestick.

Okay so what the heck are candlesticks forex?
The best way to explain is by using a picture:

Forex candlestick anatomy

Candlesticks are formed using the open, high, low and close.
  • If the close is above the open, then a hollow Candlestick (usually displayed as white) is Drawn.
  • If the close is below the open, then a filled Candlestick (usually displayed as black) is Drawn.
  • The hollow or filled section of the Candlestick is called the "real body" or body.
  • The thin lines poking above and below the body displays the high / low range and are called Shadows.
  • The top of the upper shadow is the "high".
  • The bottom of the lower shadow is the "low".


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