![]() ![]() The opening price is the beginning of the candle’s creation.Used extensively throughout the trading community, each candle delivers a story. Knowing the framework of a candlestick is essential in order to identify profitable patterns. Journalists often use line charts to give the reader a quick and concise picture. ![]() Simple line charts are useful when studying long-term trends. A line chart is the most basic chart used in finance, created by connecting a series of closing prices.The difference between the bar and candlestick chart falls on the thickness of the candle body. A candlestick chart, similar to a bar chart, also offers information on the open (O), high (H), low (L) and closing (C) prices over a given time period.Offering additional information over its more basic counterpart: the line chart, a completed bar provides the open price (O), high price (H), low price (L) and the closing (C) price. A bar chart, often labelled OHLC chart, employs the use of bars, representing the trading range of a security over a given time period.For that reason, before learning anything else, it is vital to understand the basics of each widely used chart (see figure 1.1 for a visual representation): Traders and investors who adopt technical analysis typically use price charts to identify market behaviour. ![]()
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