eToro – Forex Trading Forum

[Tropezienne]

The upgraded eToro Platform has given us, among other things, Candlestick Charts. Now, I’ve come across these elsewhere since trying to learn about forex - and I’ve avoided them so far …

There are line charts, bar charts and candlestick charts used in forex. I’m most comfortable with line charts and their apparent simplicity.

Bar and Candlestick charts are more complicated and therefore show much more - the high, the low, the open and the close of a specific trading period. As Bar and candlestick charts give the same information (I think) I guess that it is a matter of personal choice which one experienced traders prefer.

What I’ve noticed about candlestick charts is that the ‘candles’ can be clear/white or solid/black and of different lengths. So I researched a bit more to find out the significance of these features. The length of the ‘candle’ represents the gap between the opening and closing prices for a particular time period and whether the body of the candle is solid or clear represents the relationship between these prices. If the closing price is lower than the opening price the candle is clear - and vice-versa.

These 'candles' seem to have wicks at both ends. For my next trick I'm going to find out what they signify.

Which kind of charts do you prefer? And why?

Julie the Newbie

http://who-gives-a-forex.blogspot.com/

[Tropezienne]

OK - I’ve been learning more about candlestick charts today and it seems that more experienced traders prefer them to line charts because they give a more comprehensive ‘at a glance’ view of the situation for a given period of time.

What I have to say, and how I express it, mayseem very simplistic to a lot of you - I am aiming at novices like myself but your more experienced input and explanations would be most welcome.

As I understand it, each candlestick covers a specific time period (a minute, a day, a week, a month, a year) and a solid coloured or black candlestick tells us that (during that period) the closing price is lower than the opening price and a clear or white candlestick means the opposite.

The candle 'wicks' at the top and bottom of the candlesticks are called ‘shadows’ and they show the high and low price for the period covered by that candlestick.

So, at a glance there is a lot of visually immediate information. This makes it easier to spot trends and especially to spot reversals when the market swings.

I am hoping to move on from scalping and day trading to swing trading - and candlestick charts will be an important tool for me.

Any advice? Comments? Corrections?

Julie the Newbie