What is a Candle in Forex Trading?
A candlestick 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 a candle with wicks on both ends thus their name - candles.
This type of price representation is commonly used by traders because it is easier to trade with and interpret when analyzing market price movement on the forex charts.
This candles pattern can be selected for trading on MetaTrader 4 platform and traders can then use this candlesticks charts when trading currencies.
Candles Charts - these forex candlesticks charts use the same price data as bar charts (open, high, low, and close). The forex candlesticks resembles a candle with wicks on both ends.
How to Interpret Candles Charts
The rectangle section is called the body.
The high and low are described as shadows and plotted as poking lines.
Forex Candle Sticks Charts - How Do I Read Charts Beginner Traders Guide
The color of forex trading candle is either blue or red:
- (Blue or Green Colour Candlesticks) - Prices headed up
- (Red Colour Candle-sticks) - Prices went down
Most Forex platforms like the MetaTrader 4 Platform Software, use colors to mark the direction of price. Candles colors 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 in MT4
To draw these on the MetaTrader 4 Platform Software, choose the charts drawing tools within the "MetaTrader 4 Tool Bar" - shown below.
Drawing Candlesticks Charts in Meta Trader 4
To view this tool bar on MetaTrader 4 navigate to 'View' Next to file at the left top corner of the MT4 Platform, Click 'View', Then Click 'Tool Bars', Then check the 'Charts' Button. The above MT4 tool bar will appear.
Once above charts tool-bar, pops up you can then choose the type of chart you want to convert to, If you want to trade using the bar charts format, click bar chart tool button as shown above, for line chart click the line charts tool button key, for Japanese candlesticks charts click the "candlesticks charts tool button key".
