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Candlestick patterns are customary indicators that help a trader to define candlestick charts. Candlestick patterns are instrumental for making uncomplicated systems that will advise you regarding the establishment of a trend in order for you to begin trading.

The shape of the candlesticks refer to the high, low, open and closing price of stocks, currencies or commodities during a given period. This period can be selected by the trader.

Day traders generally choose 5 minutes however 15 minutes may be your choice for some cases. For longer term trading you can opt for longer periods.

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The body of the candle points the difference between the open and close points. If it’s a white or blue / green on charts with color, the lower body is the open and while you were considering it, the value advanced. A red (for colored charts) or black indicates the uppermost boundary is the opening price, although the price diminished during that period.

The wick is the title given to the vertical lines that usually stick up from the top and down from the bottom of the candle body. The top of the upper part of wick is the highest spot that the price ever achieved during the period. The bottom of the lower wick is the low.

This style of analysis helps the trader to know at a glance if values slashed or shot up during the analysis time frame. A white or green candle reveals a rising price or bearish tendency and a black or red candle illustrates a abating price or bullish tendency.

You can also examine at a glance how the highs and lows apply to the opening and closing values. Then you may have an absolutely definite candle without a wick.

The name for this is Marubozu pattern. This signifies that the opening and closing prices were never moved in either direction by the low and high rates.

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he high value as opening price and low value as closing price is represented by the red or black candle. If it is white or green, the opening rate was the low and the closing market price was the high.

A long body indicates a fairly steady movement either downward or upward. A lengthy wick either top or bottom denotes a reversal.

In conclusion, to ensure precise trend reading, candlestick must be read within the context of the preceding candlesticks. You then can continue to make more detailed candlestick patterns that will signify probable future trends.

Note: FX investing can be dangerous, can result in material losses, and is not suited for every person.

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