Trading with timing

Candlestick is an ancient Japanese method from the 1700s that are similar to Line and bar chart. With Candlestick you will get more information than from a normal line and bar chart, because Candlestick also uses the opening price. If the opening price is not available Candlestick can not be drawn.

Similar to line and bar, the highest and lowest price is marked with a thin vertical line. A wide vertical rectangle is drawn between the opening and closing price. The rectangle is filled if the security's closing price is lower than the opening price, otherwise it is hollow. A wider bar indicates more strength/weakness than a narrower bar.

Candlestick is usually combined with moving averages and oscillators to increase the accuracy of the forecasts.


Fig 1 Candlestick chart.


More information on Candlestick Patterns and how to use Candlestick for stock trading can be found in this book
Japanese Candlestick Charting Techniques.