JAPANESE CANDLESTICKS -INTRODUCTION
Like in any aspect of trading,there are no absolutes......No absolute indicator,no absolute technique that will give us an absolute buy signal and definite profits.Traders play the probability game.......when the odds are in our favour,and the probability of success is present, we then enter into a trade.Do we definitely know that this trade will definitely work?No.Yet we enter if the odds are in our favour.
Therefore,for chart players,we have indicators,be they MACD,Stochs,TRIX,
etc.We look at the price and volume and analyse pivots.Trendlines are drawn,support/resistance lines are figured out ,patterns are looked out for........all these tell us that odds are increasing of a possible fall or breakout.
The Japanese Candlesticks are one such........they help in adding to the odds of a possible future movement in that particular stock or index.But as in everything in trading,they have to be used along with the others as mentioned above.
White Candle:This is a bullish candle.We have the body ,and we have the shadows(the line above and below the body proper).Body of the bullish white candle=Lower line of the body is the opening price.Upper line of the body is the closing price.The uppermost point of the shadow on top the body is the High ,and the lowermost point of the shadow below the body is the Low.
Black Candle:This is a bearish candle.Again,we have the body and the shadow above the body and the shadow below the body.
Here,the upper line of the body is the opening price,and the lower line of the body is the closing price.The uppermost point of the shadow on top is the High,and the lowermost point of the shadow below is the Low.
More later!!
Saint
