Our goal is to keep things simple. Trading in any aspect can be complicated, but doesn't have to be. When it comes to charts; like this EUR/USD 1 Hour above; it shows previous data. The previous data can be viewed on different time frames to examine the Currency in a more detailed way.
The Goal of Chart Reading
Simply put, we read historic information to see what has happened to find some clues of future intent. We don't control markets (people spend Billions of dollars to move the market in small portions;) so we have to align ourselves with the markets.
What the What?
Without some road map, charts can be tricky. Here is a breakdown of the chart above to bring some clarification.
The Goal of Chart Reading
Simply put, we read historic information to see what has happened to find some clues of future intent. We don't control markets (people spend Billions of dollars to move the market in small portions;) so we have to align ourselves with the markets.
What the What?
Without some road map, charts can be tricky. Here is a breakdown of the chart above to bring some clarification.
- Candle Stick Shadow (Wick): This part of the Candlestick is to show where price previously was but since moved away from.
- Bear Candle: This candle body shows that during this period of time that price pressed lower and closed lower.
- Bull Candle: This candle body shows that during this period of time that price moved higher and closed higher.
- Price Axis: This area shows price levels.
- Time Axis: This area shows the measured period of time and date
So now that you have a view of the chart components there is another important factor we need to shed light on... The Japanese Candle stick.
Candle Sticks, Wicks, and Ticks
They are argued to have been created between the 1700's - 1800's to analyse Rice markets by the Japanese.
What they do is clearly show us within a certain period of time where the market was started, where it attempted to go, and where it is now. Here is a great look at how they function:
So now you have a basic understanding of charts and the candles in the charts, you can began to look at what Price Action has done in a set period of time. So there is one last point we want to touch before we wrap this up.
Call me Frames, Time Frames
So off the top we want to explain there is no golden or magic time frame, there are many great (and just as many poor) reasons why to trade specific time frames. However it really comes down to the individuals trading strategy, risk, and even psychology.
CurrencyClouds™ utilizes multiple time frames to gain a clear view on Market Climates. The Time Frame is a composition of what price has done in a particular period of Time. Each Candlestick represents a length of time. Here is a list of popular times in Currency Markets:
These are the most popular Time Frames used, there are others such as 30 Minute, 2 Hour, 6 Hour, 2 Day, etc.
Our goal is to bring a basic introduction to understanding charts and candlesticks. This isn't the only way to view price action, but the most popular and we hope this helped.
If you have any questions post your comments below, or you can Facebook us, Tweet us, and email us!
- Remember, Keep your head in the Clouds! -
Call me Frames, Time Frames
So off the top we want to explain there is no golden or magic time frame, there are many great (and just as many poor) reasons why to trade specific time frames. However it really comes down to the individuals trading strategy, risk, and even psychology.
CurrencyClouds™ utilizes multiple time frames to gain a clear view on Market Climates. The Time Frame is a composition of what price has done in a particular period of Time. Each Candlestick represents a length of time. Here is a list of popular times in Currency Markets:
- 1 Minute
- 5 Minute
- 15 Minute
- 1 Hour
- 4 Hour
- Daily
- Weekly
- Monthly
These are the most popular Time Frames used, there are others such as 30 Minute, 2 Hour, 6 Hour, 2 Day, etc.
Our goal is to bring a basic introduction to understanding charts and candlesticks. This isn't the only way to view price action, but the most popular and we hope this helped.
If you have any questions post your comments below, or you can Facebook us, Tweet us, and email us!
- Remember, Keep your head in the Clouds! -