Candlesticks Charts, an Introduction for Technical Analysis

Posted on September 3, 2008. Filed under: analysis | Tags: , , , , , |

There are two types of ways to analysis the price of a stock, fundamental analysis, and technical analysis. Fundamental analysis is used to gauge the price of a stock based on the fundamental attributes of the stock, such as price/earnings ratio, Return on invest, and associated economic statistics.

Technical analysis deals more with the psychological component of trading a stock, and is influenced for the most part on emotionalism.

The technical analyst is seeking to answer the question “how are other traders viewing this stock, and how will that effect the price in the immediate future”.

As you will see, the candlestick chart is the most effective way to gauge the (more…)

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Western line (OHLC) versus Japanese Candlestick

Posted on September 3, 2008. Filed under: analysis | Tags: , , , |

The Western bar chart is made up of four parts components, open, high, low, and close. The vertical bar depicts the high and low of the session, while the left horizontal line represents the open and the right horizontal line represents the close.

Figure 1

The Japanese Candlestick Line (Figure 2) uses the same data (open, high, low, and close) to create (more…)

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