Vantage FX (http://www.vantagefx.co.uk) looks at different chart types and what traders can decipher from them.

Candlestick Chart

Today we are looking at candlestick charts. The candlestick chart is the prefered tool for traders around the world, particularly in Asia where techncial charting began.

Traditionally, if the candle is red, the closing price was below the opening price. If in blue, the opening prices was below the closing price. You can change the colour settings of each 'candle'. We refer to these as bullish or bearish candles.

You can use various trends or candle figures to determine various types of technical analysis. Candles are also helpful when using Fibonacci retracements and technical analysis tools.