Candle chart: how to use it
Candle chart has proven to be one of the most popular graph representations among traders. Each candle contains the information about quotes’ movement during a chosen period of time (30 seconds, 1 minute, 5 minutes, etc.) That is much more informative than analysing the area chart. You can set needed timeframe and see how it went: whether trend was rising or falling. That allows you to predict what will happen to another candle and make a profitable investment.
In that article we’ll give you all you need to know to start using candle chart and trade professionally.
Let’s start with what the color of the candle actually means. If the candle is green, it indicates the rising movement of quotes. If it is red - quotes were falling down during the chosen period of time.
Real body of each candle is restricted by the upper edge and lower edge. Those are open price and close price. For the green rising candle the lower edge is an open price level and the upper edge is a closing price. And for the red, falling candle the upper border indicates an open price and lower one is a close price.
Shadows of the candle are those thin lines above and below the body. Those show traders the range of quote movement during the selected time frame. In other words, although the candle is restricted by edges of open and close price, it still could have moved much higher or much lower than open or close price. Shadows show how far up or down quotes got during the selected time frame.
Apart from showing movements of quotes candles can also indicate certain patterns which help make your predictions way easier! We will surely share that knowledge with you in following articles.
Use all opportunities to profit. Trade smart with Ayrex!