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Learn about Graphic Candlestick with Best Forex Broker

If you have been trading for a while, you must be familiar with charts. Here, the best forex broker will provide you some information about graphic candlestick, which is the most preferred one above all. Most forex traders prefer candlestick charts rather than line or bar charts.

Apart from being a better-looking graph, candlestick charts also help traders to find support and resistance levels with just one glance. However, there are actually several things to consider when you trade forex with candlestick charts. Below are the things that you need to know about graphic candlestick.

 

Made Ou

 

t of Four Foundations

4 foundations form each candle on a candlestick chart called OHLC, namely the opening price, the highest price, the lowest price, and the closing price. In the analysis of price movements, you can use equivalent price levels to draw support and resistance lines. 

However, you can only use the closing price reference (Closing) only to confirm whether the price movement has been broken (breakout) or reversed (bounce) after reaching the support and resistance lines.

Does Not Function Well at Low Time Frames

Users of candlestick charts are usually traders based on technical analysis. However, your technical analysis can be chaotic if you try to observe candlestick charts for trading at very low time frames, such as M5 or tick charts. Too much noise at low time frames, so the support and resistance displayed by the graph become inaccurate.

Time Frame in forex is a certain period of time which is determined as a period of observation of price movements. At different times, the price conditions displayed can be translated differently. According to practical terms, forex charts are formed from data on price movements collected within a certain time frame. Therefore, if the Time Frame is changed, the price movement data can be changed.

Different Candlestick Charts for Different Market

Every trader can trade using one or more time frames. A low time frame is usually considered to contain too many disturbing fluctuations, while a higher time frame is considered to better reflect overall price trends. Efforts to choose a Time Frame in the forex also consider these factors.

Generally, candlestick charts for the Daily time frame are arranged based on the Sydney market opening as a daily market opening point. However, chart formation can be different if you create a candlestick chart for the Daily time frame based on the London market opening as the daily market opening point. This is something that naturally happens, and not because your broker is cheating.

Can’t Describe Situations Outside Regular Trading Hours

If you look at the candlestick chart between the close of Friday and the opening of Monday, sometimes a very wide gap appears. This arises because candlestick charts cannot depict trading outside regular exchange hours. 

If you are keen to recognize what drives the emergence of the gap, then you can use it as a golden opportunity for profit. This is something that you need to note because this will affect how you see the graphic.

Can Be Used for Trading without Indicators

Do you aspire to trade forex without the hassle of putting up those indicators? Learn candlestick charts and various patterns that often appear in this graph, such as Morning Star, Evening Star, Shooting Star, Three White Soldiers, and so forth. 

Candlestick patterns are known to have very high accuracy, so skilled traders can use them for forex trading with no technical indicators at all. Of course, you need to study and practice continuously with broker forex salmamarket in order to reach that level of expertise!

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