Bollinger bands etc. and they can act as an additional filter for trades.
2. Provide Advance Warnings of Market Reversals
Because of the way candlestick charts are drawn, they can give warnings of market reversals far quicker than traditional bar charts, and are a great way to spot overbought or oversold scenarios.
This can of course improve market timing and bottom line profits.
3. They're Easy for Everyone to Use
Because candlestick charts use, the same open, high, low and close data that traditional bar charts use, they are easy to use for both novice and experienced traders.
4. Unique Insight into Market Momentum
The way the candlestick chart is drawn not only gives the direction of price, but also the momentum behind the market move. This is down to the way the candlestick chart graphically illustrates the relationship behind the open, high, low, and close by the drawing of the candlestick chart.
Just like a bar chart, a daily candlestick line contains the market's open, high, low and close for the days trading.
However, candlestick charting adds an extra dimension in the way that they are drawn.
The candlestick has a wide part, called the "real body." This real body represents the range between the open and close of that
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