Forex candle meanings

Candlestick charts are my preferred chart type because I can use candle chart patterns as part of the buying and selling process to find short term price turning points and additionally these patterns are used for support and resistance.
If you are new to candlestick charts it will not be that easy learning and recognizing all the patterns. I would like to suggest that you read through the chapter and that you start by recognizing at least the following patterns.
Bottom reversal: Hammer, Engulfing bullish, Bullish harami (cross), Piercing line and Morning star patterns.
Top reversal: Hanging man, Engulfing bearish, Bearish harami (cross), Dark cloud cover and Evening star patterns.
Introduction.
In the 1700s, a legendary Japanese rice trader named Homma used trading techniques that eventually evolved into the candlestick techniques that technical analysts on the Japanese stock market used in the 1870s. Steve Nison introduced these techniques to the Western world in his first book, Japanese Candlestick Charting Techniques.
The advantage of using candles on charts is that single or multiple candle patterns give earlier and more reliable reversal signals. Every candle shows the activity for the referenced period in hourly, daily, or weekly charts, for example.
Figure 6.1: Horizontal reference points of the candlestick.
In figure 6.1, the horizontal reference points of the candle represent the opening price, the highest price, the lowest price, and the closing price of the considered period. The rectangular portion of the candle, or the body, represents the range between the opening and the closing prices. If the closing price is higher than the opening price, the body is white (not filled). If the closing price is lower than the opening price, the body is black (filled).
A candle consists of either just a body or a body with an upper and/or a lower shadow. A candle with an opening and closing price at almost the same price level is called a doji (figure 6.2). The candlewicks are called shadows, and they extend up to the highest price and down to the lowest price of the related period. Candlestick charts can be used in any time frame, including minutes, hours, days, weeks, or months.
Candlestick chart patterns are formed by one or more candles; they indicate a short-term trend reversal or a trend continuation. You must always take into account the previous trend when interpreting candlestick patterns.
Candlestick patterns do NOT give price targets!
Figure 6.2: Candlestick naming.
Format, Naming, and Meaning.
Candlesticks Format Overview.
Figure 6.3: Candlesticks format description.
Format description:
Big white body (White Marubozu)
Big black body (Black Marubozu)
White opening Marubozu.
White closing Marubozu.
Black closing Marubozu.
Black opening Marubozu.
Four price doji.
Psychological Background.
The candlesticks in figures 6.4 and 6.5 demonstrate the psychological trading that takes place during the period represented by a single candle.
Figure 6.4: Candlesticks psychological background 1.
Figure 6.5: Candlesticks psychological background 2.
Figure 6.6: Rising power candles.
Figure 6.7 shows some candles with falling power.
Figure 6.7: Falling power candles.
Figure 6.8 shows candles with reversal power.
Figure 6.8: Candles with reversal power.
A big white body means buyers are in power, and the trend is up.
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Chart Basics (Candlesticks)
2.1 Level 1 Forex Intro 2.2 Level 2 Markets 2.3 Level 3 Trading.
3.1.1 Technical Analysis for Forex 3.1.2 Moving Averages in Forex 3.1.3 Identifying Trends in Forex 3.1.4 Resistance & Support 3.1.5 Double Tops And Double Bottoms 3.1.6 Bollinger Bands 3.1.7 MACD 3.2.1 U. S. Dollar 3.2.2 Euro 3.2.3 Japanese Yen 3.2.4 British Pound 3.2.5 Swiss Franc 3.2.6 Canadian Dollar 3.2.7 Australian/New Zealand Dollar 3.2.8 South African Rand 3.2.9 The Employment Situation Report 3.2.10 Unemployment Insurance Weekly Claims 3.2.11 The Fed 3.2.12 Inflation 3.2.13 Retail Sales 3.3.1 EUR-USD Pair 3.3.2 Trading Rules 3.3.2.1 Never Let a Winner Turn Into a Loser 3.3.2.2 Logic Wins; Impulse Kills 3.3.2.3 Never Risk More Than 2% Per Trade 3.3.2.4 Trigger Fundamentally, Enter and Exit Technically 3.3.2.5 Always Pair Strong With Weak 3.3.2.6 Being Right but Being Early Simply Means That You Are Wrong 3.3.2.7 Know the Difference Between Scaling In and Adding to a Loser 3.3.2.8 What Is Mathematically Optimal Is Psychologically Impossible 3.3.2.9 Risk Can Be Predetermined; Reward Is Unpredictable 3.3.2.10 No Excuses, Ever 3.3.3 USD-JPY Pair 3.3.4 GBP-USD Pair 3.3.5 USD-CHF Pair 3.3.6 Leverage 3.3.7 Fundamental Speed Strategy 3.3.8 Carry Trade 3.3.9 Money Management 3.3.10 Forex Futures 3.3.11 Forex Options.
5.1 Short Term 5.2 Medium Term 5.3 Long Term.
Now that you have some experience and understanding in currency trading, we will starting discussing a few basic tools that forex traders frequently use. Due to the fast paced nature and leverage available in forex trading, many forex traders do not hold positions for very long. For example, forex day traders may initiate a large number of trades in a single day, and may not hold them any longer than a few minutes each. When dealing with such small time horizons, viewing a chart and using technical analysis are efficient tools, because a chart and associated patterns can indicate a wealth of information in a small amount of time. In this section, we will discuss the "candlestick chart" and the importance of identifying trends. In the next lesson, we'll get into a common chart pattern called the "head and shoulders." (Day trading could be your cup of tea; you might want to read How To Set A Forex Trading Schedule .)
While everyone is used to seeing the conventional line charts found in everyday life, the candlestick chart is a chart variant that has been used for around 300 years and discloses more information than your conventional line chart. The candlestick is a thin vertical line showing the period's trading range. A wide bar on the vertical line illustrates the difference between the open and close.
The daily candlestick line contains the currency's value at open, high, low and close of a specific day. The candlestick has a wide part, which is called the "real body". This real body represents the range between the open and close of that day's trading. When the real body is filled in or black, it means the close was lower than the open. If the real body is empty, it means the opposite: the close was higher than the open.
Just above and below the real body are the "shadows." Chartists have always thought of these as the wicks of the candle, and it is the shadows that show the high and low prices of that day's trading. When the upper shadow (the top wick) on a down day is short, the open that day was closer to the high of the day. And a short upper shadow on an up day dictates that the close was near the high. The relationship between the day's open, high, low and close determine the look of the daily candlestick.
The chart above is an example of a one-month candlestick chart of the popular EUR/USD pair. Forex traders will analyze these charts closely to identify changes in momentum and After studying this type of chart, it becomes apparent that there is a wealth of information displayed on each candlestick. At just a glance, you can see where a currency's opening and closing rates, its high and low, and also whether it closed higher than it opened. When you see a series of candlesticks, you are able to see another important concept of charting: the trend. (For a more in depth analysis, check out The Art of Candlestick Charting .)

Important Candlestick Types - Part 1.
Japanese candlesticks are a way of visually representing price movements on a chart that is widely agreed to be more descriptive than traditional Western bar charts, or indicators which are merely derived from price. A Japanese candlestick chart allows price information to be more easily assimilated by the human eye, so the lesson begins with an explanation as to how each candle is drawn.
The open, high, low, and close of any candle / bar hold significance, but this lesson focuses on how to identify three of five most important and predictive types of candlestick patterns: the pin bar, the inside bar, and the outside bar.
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