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  • Post #1
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  • First Post: Edited 6:05pm Feb 25, 2006 6:56am | Edited 6:05pm
Hi guys,

First post here on FF! Man am i glad i bumped into you guys!

Im trying to understand candle stick charts and am unsure if my understanding is correct or not.

If possible, could you guys let me know if im right or wrong in assuming the following...(beware, Very basic)

1) Reading Candlestick Charts is a way of analyizing previous days performance of traders in conjunction with the highs and lows of the exchange rate for the day?

2) From this we can expect what will happen today?

3) Open and Close is where majority of traders opened and closed there positions?

4) High is where the currency was at its highest price for that period of time, wheras the Low is the lowest price of currency at the given time period?

5) "Candlesticks with short shadows indicate that most of the trading action was confined near the open and close." - so this means that traders took good advantage of the increase/decrease of the exchange rate for that period of time?

6) "Candlesticks with long shadows show that trading action extended well past the open and close." - This is opposite of point 5? Traders were unable to take advantage of the rise/fall of the currency? If so...why would this have happened?



Thanks for all the help guys. I may be late with my reply cuz i have work now so please dont mind if i dont reply too quickly.

Cheers!
1) Reading Candlestick Charts is a way of analyizing previous days performance of traders in conjunction with the highs and lows of the exchange rate for the day?

It is pure psychology. If you know candlestick patterns you can easily say what can happen next. Candlestics can say you that the market is uncertain or the major points of retracements, support and resistance levels.

2) From this we can expect what will happen today?

It is always uncertinity what will happen next after certain pattern. It is wise to wait and have certain movement.

3) Open and Close is where majority of traders opened and closed there positions?

NO. it is the open and close price of certain period. Like today open price and today close price.

4) High is where the currency was at its highest price for that period of time, wheras the Low is the lowest price of currency at the given time period?

Yes.
superman Hi guys,

First post here on FF! Man am i glad i bumped into you guys!

Im trying to understand candle stick charts and am unsure if my understanding is correct or not.

If possible, could you guys let me know if im right or wrong in assuming the following...(beware, Very basic)

1) Reading Candlestick Charts is a way of analyizing previous days performance of traders in conjunction with the highs and lows of the exchange rate for the day?

2) From this we can expect what will happen today?

3) Open and Close is where majority of traders opened and closed there positions?
No. The Open was the price at which the First Trade of the period was settled. The Close was the price at which the Last Trade of the period was settled.

 4) High is where the currency was at its highest price for that period of time, wheras the Low is the lowest price of currency at the given time period?
Yes.

 5) "Candlesticks with short shadows indicate that most of the trading action was confined near the open and close." - so this means that traders took good advantage of the increase/decrease of the exchange rate for that period of time?
No. Candlesticks with a Short Shadow AND a Short Wick indicate that both Bulls & Bears Agree that the Price is headed in the same direction. Or that the ratio of Bulls:Bears is heavily weighted to one side. {assuming the Candlestick has some decent size to it}

6) "Candlesticks with long shadows show that trading action extended well past the open and close." - This is opposite of point 5? Traders were unable to take advantage of the rise/fall of the currency? If so...why would this have happened?
No. Candlesticks with long Shadows or Wicks can indicate a number of things.
1) That there was an Over Reaction to a fundamental event.
2) Stops have just been run. {Squeezed}
3) A point of S/R has just been satisfied and the price may now continue on it's merry way.
 If a Bull closed his position at the top of the Wick, he certainly took advantage and vice versa for Bears.

Thanks for all the help guys. I may be late with my reply cuz i have work now so please dont mind if i dont reply too quickly.

Cheers!
I see, Thanks for the help guys. Atleast now i know im not heading in the wrong direction.

Bemac i didnt understand what you meant by S/R etc. Im still running through the basics. But im sure when i get to them lessons i'll understand what you mean.

Thanks again fellas.
Hey by the way...Could any of you guys recomend any good learning material (basic through to advanced) on Candlestick charts? Thanks.
Quoting superman
I see, Thanks for the help guys. Atleast now i know im not heading in the wrong direction.

Bemac i didnt understand what you meant by S/R etc. Im still running through the basics. But im sure when i get to them lessons i'll understand what you mean.

Thanks again fellas.

Sorry to butt in..
S/R means Support or Resistance.

Okay, I'm butting out..

As for books, many are mentioning about Steve Nison's books.. Haven't read any yet thoug..
Quoting superman
I see, Thanks for the help guys. Atleast now i know im not heading in the wrong direction.

Bemac i didnt understand what you meant by S/R etc. Im still running through the basics. But im sure when i get to them lessons i'll understand what you mean.

Thanks again fellas.
Hi Superman,

S/R = Support & Resistance. Support is a value that falling prices tend to bounce back up off of; while Resistance is a value that rising prices tend to bounce back down off of.

You would do well to listen to Bemac. He's a pretty smart fellow when it comes to trading, and has good ideas.

Dial
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LOL... beat you to it Dial.. But yours was more helpful since it has additional explanation..
Quoting superman
Hey by the way...Could any of you guys recomend any good learning material (basic through to advanced) on Candlestick charts? Thanks.
Superman,

Here's a good place to start:

http://www.stockcharts.com/education...dlesticks.html

In your case, I would avoid the use of red, green and yellow candlesticks on your charts (those are the colors of Kryptonite!)

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
A very good book and reasonable in price at amazon, comes with an interactive CD reinforce and test the concepts.

By Martin J Pring
Candlesticks Explained

Pring also wrote another book that is very good.
Pring on Price patterns. Talks about Price Trends.
Pin bars, Inside days, Ouside days, book uses price bars not candlesticks.

Otherwise web stuff is free.

Quoting diallist
Superman,

Here's a good place to start:

http://www.stockcharts.com/education...dlesticks.html

In your case, I would avoid the use of red, green and yellow candlesticks on your charts (those are the colors of Kryptonite!)

Dial
Quoting superman
Hey by the way...Could any of you guys recomend any good learning material (basic through to advanced) on Candlestick charts? Thanks.
The fact that I'm Scottish doesn't mean I'm tight.
But I certainly do not like to use my money unwisely.

Start your Reading Education at the following posted URL.

There are tons of big name authors e-books there and they are Free.

http://www.giuciao.com/books/trading.htm
  • Post #12
  • Quote
  • Last Post: Feb 27, 2006 3:29pm Feb 27, 2006 3:29pm
Thank alot everyone!! This is more than enough to get me started.

Really appreciate it.


Quoting Bemac
The fact that I'm Scottish doesn't mean I'm tight.
But I certainly do not like to use my money unwisely.

Start your Reading Education at the following posted URL.

There are tons of big name authors e-books there and they are Free.

http://www.giuciao.com/books/trading.htm
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