Candlestick charts were created centuries ago in Japan in order to track changes in the price of their once most traded commodity: rice. Since then, the candlestick chart has been utilized by traders all over the world in order to more completely and more succinctly track price changes in just about every asset that is traded on a global basis. Candlestick charts are able to convey more information in a smaller space than any other type of chart that has yet been invented. You can use these charts to help you with your binary options trading after just a little study.
Understanding candlestick charts – Basics on How To Read Candlestick Charts:
A candlestick chart shows the opening and closing prices for a session, plus the high, low, and range. A group of candlesticks placed together in a single chart can show you not only individual sessions of trading, but also how those sessions interrelate to each other. There are many different patterns that traders use to help predict future price changes, but the main idea is that trading is a beast that is controlled by human psychology. When patterns appear, traders will react in a certain way, thus making candlestick charts an overall accurate method at predicting future prices.
How to use a candlestick chart:
Using a candlestick chart is not difficult, as many people expect them to be. They are color coded so that you can more accurately determine whether a trading session was profitable or not with just a single glance. By learning the patterns that have become universally accepted as predictive tools, you can use candlestick charts to effectively predict where prices will go, on any level of trading. These charts can be used for any asset and any timeframe. Day traders can look at minute by minute trading sessions while investors can look at daily or even weekly sessions to help them better understand market patterns.
Candlestick charts and binary options traders:
Binary options traders use candlestick charts to help them determine if the price of their underlying asset will increase or decrease over the stated life of a trade. Because candlestick charts are typically more thorough than other charts, these are a crucial weapon within the arsenal of any binary options trader. They make understanding trends a much quicker process and as such, are effective at predicting prices.
For binary options traders, especially short term traders, the candlestick chart is a necessity. By understanding these charts and learning the patterns that are most effective at price predictions, you can become more profitable with your options trading.
Where To Get A Candle Stick Chart
There are plenty of sites where you can get charting software like candle stick charts. As a matter of fact, there are too many to review! Most traders use something like MetaTrader 4 or “MT4″. The screen shots above come from freestockcharts.com. You just have to click on settings > plot style > CandleStick