July 9, 2014 by Janice

Business will forever be part of people’s lives. Wherever we go, whatever we do, it simply involves business. Eating which is a basic necessity of life involves business in the sense that what we eat was sold to us. When we drive to work, the cars we use were marketed to us. More importantly, the gasoline that we consume has a price that constantly fluctuates. Yes, everything we do, no matter how simple it is definitely involves business. As atheists say, “money dictates the movement of the earth”.

No matter what religion you are in, I am sure you have already realized how important money is. In this article, candlesticks will be discussed. Continue reading to have a better understanding of candlesticks and know how it is involved with money.

Candlesticks are a set of charts that are very effective in visualizing price movements. Currently, there are two very basic candlesticks- Bullish and Bearish. The bullish candle occurs when the close is higher than the open. It is denoted by the colors green or white. On the other hand, the bearish candle happens when the open is higher than the close. Usually, it is denoted by either red or black.

There are three main parts to a candlestick:

The first one is the “upper shadow”. This part puts an importance to three constants- the bullish candle (close), the bearish candle (open), and the high of the day. In graphical representation, the upper shadow is portrayed by the vertical line between the high of the day and the close or open.

The second part of a candlestick is the “real body”. The real body is simply the difference between the open and close. It is the colored portion of the candlestick.

The third main part of a candlestick is the opposite of the first. This is the “lower shadow”.  Instead of putting importance to the high of the day, this part is concerned with the lowest of the day. It is the vertical line between the low of the day and the open or close.

An excellent representation of the Candlestick basics

There are different candlestick patterns. All of which are very important in understanding a candlestick chart. These are some of the more important candlestick patterns:

• Bullish Engulfing Pattern
• Bearish Engulfing Pattern
• Dark Cloud Cover
• Doji
• Dragonfly Doji
• Evening Star
• Gravestone Doji
• Hammer
• Hanging Man
• Harami
• Inverted Hammer
• Morning Star
• Piercing Pattern
• Shooting Star
• Tweezer Tops & Bottoms
• Windows

Image from Online Trading Concepts