Video course courtesy of www.informedtrades.com

Video course courtesy of www.informedtrades.com

Video course courtesy of www.informedtrades.com

Article by Karen Winton

Because candle stick charting provides a range of information and can be interpreted easily, most people choose trading with candlesticks compared to utilizing other data analysis tools for trading. People who want candlestick charts explained should also find a way to learn how to read candlestick charts properly.

Reading candlestick charts is not that hard. This is because the said chart only consists of two types of line: a narrow line that’s vertical in shape, and a wide line that’s also vertical in shape. Candlestick charts explained will also show you that the said chart has information such as: open, low, high, close, etc.

Traders who want to know how to read candlestick charts correctly will have to first understand what each of the candlestick terminologies mean. Once they know their meanings, they can start reading candlestick charts and come up with the proper interpretation and analysis:

The figure called as ‘Open’ actually refers to the first trading price, and is usually presented as a wide vertical line. Candlestick charting information will also inform traders that the Open indicator can be seen either at the top of the wide vertical line or at the bottom of the wide vertical line. If a downward candlestick is what you are using when trading with candlesticks, the Open indicator is located on top. Use of an upward candlestick, on the other hand, shows the Open indicator at the bottom part of the line.

Candlestick charts explained also contain information about the highest price that was traded. The said price is referred to as the ‘High’. The ‘High’ figure is found at the wick of the candlestick, or the top portion of the thin vertical line.

The term ‘Low’, on the other hand, refers to the lowest price that was traded. People who want to find out how to read candlestick charts should know that the ‘Low’ indicator is actually found at the bottom part of the candlestick wick.

The ‘Close’, another terminology you’ll come across if you are interested in using candle-sticks for trading Forex, refers to the last price that was traded during your time of trading. When reading candlestick charts, you’ll see that the ‘Close’ indicator, just like the ‘Open’ indicator, is found at the bottom or the top of the wide vertical line on the chart. The only difference is that in an upward candlestick, the ‘Close’ figure is placed on top, while in a downward candlestick the ‘Close’ figure is placed at the bottom.

The above mentioned terminologies are just a few of the various terminologies one should understand when it comes to trading with candlesticks. Remember that you need to have candlestick charts explained further if you really want to be successful not only in reading them, but also in making profit more easily with the use of the candle-sticks method of trading.

About the Author

Karen Winton is a trusted reviewer. To learn more about trading with candlesticks, read: Candlestick Trading for Maximum Profits. For tips on selling physical products, view: Info Product Killer.

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Predicting the future can be a notoriously tricky business. As mentioned earlier on, American futures trading contract is a type of derivative instrument, or financial contract, in which there will be two willing party agree to transact an underlying financial asset such as financial instruments or physical commodities for delivery in future at a particular price.

Buying a futures contract is basically agreeing to buy something that the seller has not yet produced for a fixed price. However, entering into a futures market does not necessarily mean that the buyer will be responsible for receiving or delivering large inventories of commodities. Primarily, the buyers and sellers in the futures market are with the objective to hedge risk or speculate rather than exchange physical goods. Futures market is not an activity of cash/spot market. This explains why futures are used as financial instruments by not only the producers and customers but also speculators who wish to gain from futures trading.

American Futures trading can be traced to as early as mid-nineteenth century. Before the North American futures market originated around 150 years ago, farmers would grow their crops and sell them in the market place. Without any indication of demand, supply often exceeds what is needed during a good harvest and unsold crops were left to rot. A good harvest doesn’t necessarily mean favourable to the farmers. Conversely, when the commodity was out of season or has a poor harvest, the crops product became very expensive due to the shortage in supply but consistent demand.

In the mid-nineteenth century, central grain markets were established and central marketplace was created for farmers to trade their commodities for immediate delivery(spot trading) or for a forward delivery ( to trade the commodities at a certain date in the future at a pre-determined price) This concept saved many farmers the loss of crops and profits and to stabilize the supply and prices in the off-season. This has eventually become the forerunners to today’s futures contract.

The future today is not tomorrow. A look back only 20 years ago demonstrates this perfectly. Today’s futures trading market is a global marketplace for not only agricultural commodities such as corn, coffee bean and wheat, but ranges from crude oil, gold, currencies and financial instruments such as Treasury bonds, options and securities. Futures trading market is a diverse meeting place of exporters, importers, farmers, manufacturers and even speculators who want to gain from the movement in futures contract prices. Thanks to the powerful modern information technology, commodities prices are seen throughout the world, so a American village farmer can match a bid from a buyer in London!

American Futures contract can be traded at New York Board of Trade (NYBOT), renamed ICE Futures US in September 2007. IT is a physical commodity futures exchange located in New York city. IT originated in 1870 as the New York Cotton Exchange. In 1988, the New York Board of Trade became the parent company of both New York Cotton Exchange and the Coffee, Sugar and Cocoa Exchange and now function as division of the NYBOT. On September 14,2006, NYBOT agreed to become a unit of ICE and this transaction was completed on January 12, 2007. So for anyone who is interested in American futures trading, research and read up on ICE Futures is necessary

Article by steve todd

Candlestick charting is great for traders wanting an extra edge in their quest for profits – this is due to the way the candle bodies are drawn, that gives a better insight that is visual, and shows trader psychology.

More traders than ever are using candlestick charts due to the extra trading edge they can get with this form of charting – if you have not used them before, then this article is for you.

Candlestick charts are not new, and have been used for hundreds of years by Japanese traders to predict and act on market movements.

Candlestick charting giving greater insight into human psychology

In the 1700′s, Homma, a Japanese trader in rice, noticed how the price of rice was influenced by human psychology as much as the supply and demand situation. Homma used candlestick charts to trade rice and amassed a huge fortune in the markets. In fact, it was rumored he never to have had a single losing trade!

Human psychology has never changed, and has remained constant over time – candlestick charting is therefore just as useful today, as it was hundreds of years ago.

The Re-emergence of Candlestick Charting

Steve Nison, book, “Japanese charting techniques,” bought candlestick charting back into the public domain in the 1990s. Currency traders soon started using candlestick charting instead of bar charts for greater insight into market movements.

So why use Candlestick Charts?

1. They complement other Technical Tools

You can use candlestick charts as you would use the common bar chart, and you can combine them with traditional market indicators. Candlestick charts are a great way to spot opportunities, and then filter, and time trades with other indicators.

2. Spotting trend changes

Because of the way candlestick charts are viewed, they can give warnings of market reversals, far more visually than traditional bar charts.

If you look at candlestick charting, the human psychology of the move literally jumps out the page at you.

3. Straightforward to use

Candlestick charts use, the same open, high, low and close data that traditional bar charts use, and are easy to draw.

In addition, there are many packages like supercharts and tradestation that will draw them automatically for traders.

The different candle names are also easy to remember.

4. Define market momentums

The way the candlestick chart is drawn not only gives the direction of price, but also the momentum behind the move.

The candlestick chart graphically illustrates the relationship behind the open, high, low, and close by the body – and adds an extra visual edge, due to the way they are drawn.

The candlestick has a wide part, called the “real body.” This real body represents the range between the open and close of that day’s trading.

When filled in black, the real body 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.

Above and below the real body we see the “shadows.” We see these as the wicks of the candle (which give them their name), and the shadows actually show the high and the low of the day’s trading.

If the upper shadow on the filled-in body is short, it indicates that the open that day was closer to the high of the day. On the other hand, a short upper shadow on a white, or unfilled body shows the close was near the high.

A Visual Aid to Give You an Edge

Candlestick charts should be used rather than traditional bar charts because they give you an extra visual dimension.

Regardless, of whether you are a day trader, position trader, system trader or a trader who likes to make your own trades, there is really nothing to dislike about candlestick charts!

Easy and fun to use, and providing a greater insight into market moves, along with the ability to use in any type of trading, means if you aren’t already using candlestick charting, then its time to start.

About the Author

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