Candlestick Charts

Technical analysis charts

How to read stock charts - Candlestick Graphs and Charts

Japanese Candlestick charts or graphs,  show the changes in price for each
time segment for the setting you are viewing but give a reader a bit more information than a simple line chart. 

Click in the box at the bottom right of our interactive AVAFX chart below, and select Candlestick to see an example of a candlestick graph-chart.

This chart is set on Hourly  so for a candle-stick-chart that means that every 1 hour a candle will register on the chart and this will show the opening, high, low and closing prices that the stock has been traded at for that particular hour. The value of the next candle will then fluctuate as the price moves until the end of the next hour, at which point the next candle is sealed, and so on.

The following charts are examples of an up candlestick and a down candlesick and each show the price range that market has traded at for that particular time segment.

  • Up candlestick   -  where the market has risen and the closing price is higher than the opening price
  • Down candlestick  -  Where the market has fallen and the closing price is below the opening price
candlestick chart analysis candlestick charts explained      

So these charts are very useful for short, and long term technical analysis stock trading, or to back up another form of stock picking. As you can see, the same as with the bar charts,  these charts give us far more information than the basic line charts.

You can see the exact values for each candlstick on the chart below, by hovering your cursor above any of the candlesticks that you want to see the details for.



Technical Analysis Charts - Candlestick Charting Explained

This particular chart show live prices courtesy of Avafx and can be changed to show various different trading instruments such as stock indexes, commodities and various foreign currency trading pairs. All you need to do to change it is select from the range of instruments programmed in to the instrument box.

Time settings can be adjusted by selecting from the period box and the charts can be viewed in the different formats by selecting from the view box on the bottom right.

Candlestick Charting Explained  

We find that candlestick graphs-charts are far easier to read than any of the other types of chart and a lot more information can be obtained from them and these charts take technical analysis to another level.

In a similar way to the stock chart patterns analysis, in our candlestick chart analysis there are various candlestick chart patterns that we can use to identify possible turning points in a trend, or indeed it could be a continuation candlestick pattern.

Again, this is a huge area of analysis that we will go into in more detail in future updates to the site.

 How to read stock charts - Contents