What is a Candle in Forex Trading?

A candle is a price representation of a currency pair which is used to represent the high, low, opening price & closing prices of a currency pair for a specific period of time. Candlesticks resembles and looks like a candle with wicks on both ends thus their name - candles.

This type of price representation is often used by traders because it is easier to trade with and interpret when analyzing market price movement on the forex charts.

This candlesticks pattern can be selected for trading on MT4 software & traders can then use this candlesticks charts when trading currencies.

Candlesticks Charts - these currency candlesticks charts use the same price info as bar charts (open, high, low, and close). The forex candlesticks resembles and looks like a candle with wicks on both ends.

How to Interpret/Analyze Candlesticks Charts

The rectangle section is called the body.

The high and low are referred to as shadows and plotted as protruding lines.

Forex Candle Sticks Charts - How Do I Read Charts Beginner Traders Tutorial

The colour of forex trading candlestick is either blue or red:

• (Blue or Green Color Candles) - Prices headed up
• (Red Colour Candlesticks) - Prices went down

Most Forex platforms like the MT4 Software/Platform, use colours to mark the direction of price. Candlesticks colour used are blue or green: when the price moves upwards, color of candlestick is blue: when the price moves downward, color of candlestick is red.

Drawing Candles Charts on MT4 Platform

To draw these on the MT4 Software Platform, choose the charts drawing tools within the "MT4 Tool Bar" - illustrated and shown below.

Drawing Candles Charts in Meta Trader 4

To view this tool-bar on MT4 go to 'View' Next to file at the top left corner of the MetaTrader 4 Platform Software, Click 'View', Then Click 'Toolbars', Then check the 'Charts' Button. The above MT4 tool bar will appear.

Once above charts tool-bar, pops up you as a trader can then select the type of chart you as a trader want to convert to, If you want to trade using the bar charts format, click bar chart tool button as is shown above, for line chart click the line charts tool button key, for Japanese candlesticks charts click the "candlesticks charts tool button key".

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