Candlestick Charts

Candlestick charts are the most popular type of chart used by Forex Traders.



On a one-hour chart, a ‘candlestick’ is formed every hour. They are called candlesticks because they represent a candle, with a wick and body.

Each candlestick shows the following price information for that hour:

* The price high
* The price low
* The price at the beginning of the hour
* The price at the end of the hour

See the picture below for an example of candlesticks on an hourly chart:

The candle on the right is a bearish candle, which means the price went down during the hour.

Candlesticks are known as being either decisive or indecisive – which tells us how the market is thinking at the time.

A decisive candle will have a long, solid body and not much wick. This means that the market is moving in a decisive direction – either bullish or bearish.

The screen grab below is an example of a decisive candle:

The screen grab below is an example of an indecisive candle:

Candlestick patterns are formed by one or more candlesticks, and these give us our buy or sell signals.

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