Reblog: How to Trade with Candlestick Charts Like a Pro
WHILE everyone is used to seeing the conventional line charts found in everyday life, the candlestick chart is a chart variant that has been used for around 300 years and discloses more information than your conventional line chart.
The candlestick is a thin vertical line showing the period’s trading range.
A wide bar on the vertical line illustrates the difference between the open and close.
Note: The daily candlestick line contains the currency’s value at open, high, low and close of a specific day.
The candlestick has a wide part, which is called the “real body“.
This real body represents the range between the open and close of that day’s trading.
When the real body is filled in or black, it means the close was lower than the open.
If the real body is empty, it means the opposite: the close was higher than the open.
Candlestick Charts
Just above and below the real body are the “shadows.”
Chartists have always thought of these as the wicks of the candle, and it is the shadows that show the high and low prices of that day’s trading.
When the upper shadow (the top wick) on a down day is short, the open that day was closer to the high of the day.
And a short upper shadow on an up day dictates that the close was near the high.
The relationship between the day’s open, high, low and close determine the look of the daily candlestick.
After viewing it, it is easy to see the wealth of information displayed on each candlestick.
At just a glance, you can see where a currency’s opening and closing rates, its high and low, and also whether it closed higher than it opened.
When you see a series of candlesticks, you are able to see another important concept of charting: the trend.
PART 1- Single Candles
Long Black Day– Long black day candlestick consists of real body which is much more longer than it’s shadow lines. This indicate the great difference between the open price and the close price for a trading day. Long black day candlestick shows that the open price is near the high, price closes lower and near the low. The longer the body of the candlestick is, the more bearish the signal.
Long White Day– Long white day candlestick consists of real body which is much more longer than its shadow lines. This indicate the great difference between the open price and the close price for a trading day. Long white day candlestick shows that the open price is near the low, price closes higher and near the high. The longer the body of the candlestick is, the more bullish the signal.
Short White Day– In theory, the short white candle cannot make up its mind between a reversal or continuation of the existing trend. In the real world, it performs as a reversal 52% of the time, which is close to the theoretical indecision.
Short Black Day– The same is valid for the short black day candles. They are showing hesitance between a bullish and a bearish state. Not much happens with this candle, unless it is part of an “inside bar” candlestick formation.
White Spinning Tops– A type of candlestick formation where the real body is small despite a wide range of price movement throughout the trading day. This candle is often regarded as neutral and used to signal indecision about the future direction of the underlying asset. Usually in an uptrend when far away from resistance, it is considered a continuation pattern. It is the “breath” that the market takes just before a continuation of its current trend.
Black Spinning Tops– Тhe interpretation here is the same: A type of candlestick formation where the real body is small despite a wide range of price movement throughout the trading day. This candle is often regarded as neutral and used to signal indecision about the future direction of the underlying asset. In a downtrend, when there is no imminent support level, this is considered as a continuation pattern.
Dragonfly Doji– A type of candlestick pattern that signals indecision among traders. The pattern is formed when the stock’s opening and closing prices are equal and occur at the high of the day. The long lower shadow suggests that the forces of supply and demand are nearing a balance and that the direction of the trend may be nearing a major turning point.
Gravestone Doji– A type of candlestick pattern that is formed when the 
opening and closing price of the underlying asset are equal and occur at the low of the day. The long upper shadow suggests that the day’s buying buying pressure was countered by the sellers and that the forces of supply and demand are nearing a balance. This pattern is commonly used to suggest that the direction of the trend maybe be nearing a major turning point. If it forms around major resistance area, it might be considered as a reversal candle.
Long-Legged Doji– A type of candlestick formation where the opening and closing prices are nearly equal despite a lot of price movement throughout the trading day. This candlestick is often used to signal indecision about the future direction of the underlying asset. Usually in the middle of the range, it could be taken as a continuation signal of the previous trend.
PART 2 – Candlestick Patterns (2 candles)
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