VOGAZ - Technical Analysis Tool and Charting Software

VOGAZ  - Technical Analysis Tool and Charting Software
VOGAZ- A Technical Analysis Tool and Charting Software for Stock, Forex & Commodity Market Investors and Traders.

Monday, April 18, 2011

Vogaz - Chaikin Money Flow

The Chaikin Money Flow oscillator is a momentum indicator that spots buying and selling by calculating price and volume together. This indicator is based upon Chaikin Accumulation/Distribution, which is in turn based upon the premise that if a stock closes above its midpoint [(high+low)/2] for the day then there was accumulation that day, and if it closes below its midpoint, then there was distribution that day.
 Chaikin Money Flow oscillator is calculated from the periodic readings of the Accumulation/Distribution Line.
Chaikin Money Flow is based on the observation that buying support is normally signaled by increased volume and frequent closes in the top half of the period's range. Likewise, selling pressure is evidenced by increased volume and frequent closes in the lower half of the periodic range.
A positive Chaikin Money Flow signals accumulation, while distribution is signaled by the indicator line below zero. The higher the reading (above or below zero), the stronger the signal.
The indicator often warns of break-outs & provides useful trend confirmation. When price is trading in a range, volume may indicate in which direction a breakout is most likely to occur. Higher volume at peaks means that an upward breakout is more likely. Higher volume at troughs indicates that a downward breakout is more likely.
There are three items that determine if an instrument is under accumulation and the strength of the accumulation.
1. If Chaikin Money Flow greater than zero, it is an indication of buying pressure and accumulation when the indicator is positive
2. The second item- determine how long the oscillator has been able to remain above zero. The longer the oscillator remains above zero, the more evidence there is that the security is under sustained accumulation. Extended periods of accumulation or buying pressure are bullish and indicate that sentiment towards the security remains positive.
The third indication- the actual level of the oscillator. Not only should the oscillator remain above zero, but it should also be able to increase and attain a certain level. The more positive the reading is, the more evidence of buying pressure and accumulation.

Vogaz - Bollinger Bands

Bollinger Bands are similar in comparison to moving average envelopes. Bollinger Bands are calculated using standard deviations instead of shifting bands by a fixed percentage. Bollinger Bands (as with most bands) can be imposed over an actual price or another indicator. When prices rise above the upper band or fall below the lower band, a change in direction may occur when the price penetrates the band after a small reversal from the opposite direction. Bollinger Bands are lines plotted in and around the price structure to form an "envelope." It is the action of prices near the edges of the envelope. Bollinger Bands are based upon a simple moving average.
Bollinger recommends using a 20-period simple moving average for the center band and 2 standard deviations for the outer bands. The length of the moving average and number of deviations can be adjusted to better suit individual preferences and specific characteristics of an instrument.
Bollinger Bands is a  indicator that allow comparing volatility and relative price levels over a period. It can be combined with price action to generate signals and foreshadow significant moves.
It serves many functions-
• To identify periods of high and low volatility
• To identify periods when prices are at extreme, and possibly unsustainable, levels.
• To arrive at rigorous buy and sell decisions.



Vogaz - Aroon Oscillator


A separate indicator called the Aroon Oscillator can be constructed by subtracting Aroon (down) from Aroon (up).  Aroon Oscillator oscillates between -100 and +100 with zero as the center crossover line.

The Aroon Oscillator, the positive value indicates an upward trend (or coming trend), and the negative value indicates a downward trend. The higher the absolute value of an oscillator, the stronger is an indication of a trend.

It is used to determine whether the instrument is trending and how stable the trend is. It signals an upward trend is underway when it is above zero and a downward trend is underway when it falls below zero. The farther away the oscillator is from the zero line, the stronger the trend.

Vogaz - Aroon


The Aroon indicator is often used to determine whether a stock is trending or not and how stable the trend is. Trends are determined by extreme values (above 80) of both lines (Aroon up and Aroon down), whereas unstable prices are determined when both lines are low (less than 20). It is a trend indicator - used to determine if the security is moving in a trend or sideways, as well as how strong the trend is. If the price of a security is rising, the Close for the period will be closer to the end of the period, and vice versa. The Aroon indicator shows how much time passed between the highest (up) or lowest (down) Close since the beginning of a period (in percents).
Aroon indicator consists of two lines - Aroon(up) and Aroon(down). AroonUp for a given time period is calculated by determining how much time (on a percentage basis) elapsed between the start of the time period and the point at which the highest closing price during that time period occurred. AroonUp will be 100 when the instrument is setting new highs for the period. Conversely, AroonUp will be 0 if the instrument has continually dropped throughout the period. AroonDown is calculated in a similar manner, expect looking for lows as opposed to highs.
Aroon is used to measure the presence and strength of trends. When Aroon(up) and Aroon(down) are moving together, there is no clear trend (the price is moving sideways, or about to move sideways).
When the Aroon(up) is below 50, it is an indication that the uptrend is losing its momentum, while when the Aroon(down) is below 50, it is an indication that the downtrend is losing its momentum.
When the Aroon(up) or Aroon(down) are above 70, it indicate a strong trend in the same direction, while when the value is below 30, it indicates a trend coming in an opposite direction.




Vogaz - Accumulative Swing Index



The Accumulation Swing Index (Wilder) is a cumulative total of the Swing Index. The Accumulation Swing Index may be analyzed using technical indicators, line studies, and chart patterns, as an alternative view of price action. The accumulation swing index (ASI) is a variation of Welles Wilder's swing index. It plots a running total of the swing index value of each bar. The swing index is a value from 0 to 100 for an up bar and 0 to -100 for a down bar. The swing index is calculated by using the current bar's open, high, low and close, as well as the previous bar's open and close. The swing index is a popular tool in the futures market.


The Accumulative Swing Index is a cumulative total of the Swing Index. The Accumulative Swing Index provides a numerical value that quantifies price swings.
It defines short-term swing points. It indicates the real strength and direction of the market. The accumulative swing index is used to gain a better long-term .If the long-term trend is up, the accumulative swing index is a positive value. Conversely, if the long-term trend is down, the accumulative swing index is a negative value. If the long-term trend is sideways (non-trending), the accumulative swing index fluctuates between positive and negative values. This indicator is used to analyze futures but can be applied to stocks as well.

ASI will give the technician numerical price swings that are value quantified, and it will show short-term trend turnarounds. A breakout is indicated when the accumulative swing index exceeds its value in the period when a previous significant high swing point was made. A downside breakout is indicated when the value of the Accumulative swing index drops below its value in a period when a previous significant low swing point was made.



Sunday, April 17, 2011

Darvas boxes


Darvas boxes

Darvas boxes are dynamic trading range boxes that are based upon a state machine algorithm.These boxes have two areas. The bottom part is a stop loss area and the top part is the break out area.

When prices break above the top of the box, it's a buy signal if the instrument was making new 12-month highs on high volume, allowing to stay long and add new positions as new boxes developed. When the price of the stock dipped below the stop loss section of the box (a percentage of the price, just below the bottom of the box), take profits and move on to something else.
 
One would buy the security when prices broke out of the top of the box on high volume, typically only if the security was making a new 12-month high. If an existing position was held, one would exit the security if the price fell below the stop loss area (the bottom of the box).
 
Darvas boxes are drawn when certain conditions were met-

·       The price had reached a new high

·       A volume breakout is required for the first box in a series

·       The high was followed by 3 consecutive periods that did not trade higher. This formed the top of the box and the first day of the box.

·       On or after the high, a low is found that is followed by 3 consecutive periods that did not trade lower. This forms the bottom of the box.

Once a box was constructed, Market entry is made when the price push through the top of the box. Position is held while the price is above the stop level. When subsequent boxes are made, the stop level is set to just below the bottom of the next box. The Darvas box uses several steps to identify a top and bottom, or acceptable trading range. The boxes are used to normalize a trend. A "buy" signal would be indicated when the price of the stock exceeds the top of the box. A "sell" signal would be indicated when the price of the stock falls below the bottom of the box. Darvas' original interpretation was to only buy when there was a pattern of boxes stacking on top of each other and to place the stop loss at the top of the previous box

Heikin Ashi



A type of candlestick chart that shares many characteristics with standard candlestick charts, but differs because of the values used to create each bar. Instead of using the open-high-low-close (OHLC) bars like standard candlestick charts, the Heikin-Ashi technique uses a modified formula-

Close = (Open+High+Low+Close)/4
Open = [Open (previous bar) + Close (previous bar)]/2
High = Max (High,Open,Close)
Low = Min (Low,Open, Close)





These charts can be applied to many markets; however, they are most often used in the equity and commodity markets.

There are five primary signals that identify trends and buying opportunities-



  • Hollow candles with no lower "shadows" indicate a strong uptrend- Hollow candles signify an uptrend- you might want to add to your long position, and exit short positions.
  • One candle with a small body surrounded by upper and lower shadows indicates a trend change- risk-loving traders might buy or sell here, while others will wait for confirmation before going short or long.
  • Filled candles indicate a downtrend- you might want to add to your short position, and exit long positions.
  • Filled candles with no higher shadows identify a strong downtrend- stay short until there's a change in trend.

These signals show that locating trends or opportunities becomes a lot easier with this system. The trends are not interrupted by false signals as often, and are thus more easily spotted. Furthermore, opportunities to buy during times of consolidation are also apparent. 

The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow candles with no lower shadows are used to signal a strong uptrend, while filled candles with no higher shadow are used to identify a strong downtrend.

This technique should be used in combination with standard candlestick charts or other indicators to provide a technical trader the information needed to make a profitable trade.


Conclusion
The Heikin-Ashi technique is extremely useful for making candlestick charts more readable--trends can be located more easily, and buying opportunities can be spotted at a glance. The charts are constructed in the same manner as a normal candlestick chart, with the exception of the modified bar formulas. When properly used, this technique can help you spot trends and trend changes from which you can profit!
 

Three Line Break


Three Line Break 

Three Line Break charts display a series of vertical boxes that are based on changes in prices. It ignores the passage of time. The Three Line Break charting method is so-named because of the number of lines typically used.

The three line break chart is similar in concept to point and figure charts. The decision criteria for determining are somewhat different. The three-line break chart looks like a series of rising and falling lines of varying heights. Each new line, like the X's and O's of a point and figure chart, occupies a new column. Using closing prices (or highs and lows), a new rising line is drawn if the previous high is exceeded. A new falling line is drawn if the price hits a new low. 

The term "three line break" comes from the criterion that the price has to break the high or low of the previous three lines in order to reverse and create a line of the opposite color. The Three Line Break Charts are actually Any Line Break Charts. 

The following are the basic trading rules for a three-line break chart-

·         Buy when a green line emerges after three adjacent black lines (a green turnaround line).

·         Sell when a red line appears after three adjacent white lines (a red turnaround line).

·         Avoid trading in trend less markets where the lines alternate between red and green

  Line Break charts are always based on closing prices.

An advantage of Three Line Break charts is that there is no arbitrary fixed reversal amount. It is the price action, which gives the indication of a reversal. It is use to determine the prevailing trend.

The disadvantage of Three Line Break charts is that the signals are generated after the new trend is well under way. However, many traders are willing to accept the late signals in exchange for calling major trends.

You can adjust the sensitivity of the reversal criteria by changing the number of lines in the break

Three Line Break chart focus on price, eliminate much of market noise & identify trend more clearly. Combined with candle signals, they can be the basis of an effective trading strategy

Kagi


Kagi 

Kagi charts display a series of connecting vertical lines where the thickness and direction of the lines are dependent on the price action. The charts ignore the passage of time. Kagi charts have no time axis and are made up of a series of vertical lines, However, the vertical lines are based solely on the action of closing prices. Another difference is that the thickness of a kagi chart line changes when closing prices penetrate the previous column top or bottom.

If prices continue to move in the same direction, the vertical line is extended. However, if prices reverse by a reversal amount, a new kagi line is then drawn in a new column. When prices penetrate a previous high or low, the thickness of the kagi line changes. Kagi charts illustrate the forces of supply and demand on a instrument. A series of thick lines shows that demand is exceeding supply (a rally). A series of thin lines shows that supply is exceeding demand (a decline). Alternating thick and thin lines shows that the market is in a state of equilibrium (i.e., supply equals demand).

Kagi charts are an excellent way of viewing the underlying supply and demand of a market. When the most recent kagi line is thick (and green), it indicates that demand is exceeding supply, and that the market is in an upward trend. Thin (red) lines, on the other hand, show that supply is exceeding demand and that the market is in a downward trend. Alternating thick and thin lines indicate that supply and demand is in an approximate state of balance.

 giving you a chart of the market's overall moves. You can gauge the strength of a trend by noting whether or not, in an upward trending market, a swing bottom is above, equal to, or below the previous swing top. The more 'above' it is, the stronger the trend. Normal technical analysis techniques can be used very effectively.

Kagi charts are of great value to a trader of trending markets. Traders can use kagi charts for their entry and exit signals, and to place their stop-loss orders to lock in profits. They would consider buying an instrument when the line changes from thin to thick. They would consider selling the instrument when the line changes from thick to thin.

 when the trade is in profit, change this to a larger percentage. Should the instrument commence an almost vertical climb, a smaller reversal percentage can be used to help lock in profits. when a kagi chart has made eight to ten higher highs, the market is considered to be due for a correction.

Renko


Renko 

Renko  charts a line (or "brick") is drawn in the direction of the prior move only if prices move by a minimum amount (i.e., the box size). The bricks are always equal in size..

Basic trend reversals are signaled with the emergence of a new white or black brick. A new white brick indicates the beginning of a new up-trend. A new black brick indicates the beginning of a new downtrend. A New Line  is drawn  only when a predetermined amount is exceeded from the top/ bottom. All the bricks are of the same size. More  than one line could be drawn in a single period.

Calculation



Renko charts are always based on closing prices. A  box size specified  determines the minimum price change to display. To draw Renko bricks, current period's close is compared with the high and low of the previous brick (white or black). If the closing price rises above the top of the previous brick by at least the box size, one or more white bricks are drawn in new columns. The height of the bricks is always equal to the box size.

If the closing price falls below the bottom of the previous brick by at least the box size, one or more black bricks are drawn in new columns.. If prices move more than the box size, but not enough to create two bricks, only one brick is drawn.

 Indicators calculated on Renko charts use all the data in each column and then display the average value of the indicator for that column. Renko (Bricks) are drawn equal in size for a determined amount. If prices change by the determined amount or more, a new brick is drawn.

If prices change by less than the determined amount, the new price is ignored. Renko Charts display price movements if they are bigger than a fixed amount. 

The Renko chart is a trend following technique. Renko charts also  gives the  signals near the end of short-lived trends. However, the expectation with a trend following technique is that it allows  to ride the major portion of significant trends.

Since a Renko chart isolates the underlying price trend by filtering out the minor price changes, Renko charts can also be very helpful when determining support and resistance levels. A price level at which it’s  expect selling is  to take place due to technical analysis. The resistance level of one is the support level for the other

Equivolume Shadow

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Equivolume  Shadow 

Equi volume shadow displays prices in a manner that emphasizes the relationship between price, volume and the shadow. It measures the relationship between price and volume. Price is measured on the vertical axis and volume is measured on the horizontal axis.



Volume plays an important role in confirming price movements. It is  to difficult to track this relationship on a normal bar chart with volume plotted in a separate slot below. This is overcome by plotting price and volume activity on a single chart.



Equi volume combines price and volume in a two-dimensional box. The top line of the box is the high for the period and the bottom line is the low for the period. The width of the box is the unique feature of Equivolume, it represents the volume for the period. The shadow (empty region in the box) is based on the difference between open and either high or low depending on whether the price closed lower than the open of higher than the open for that interval bar. The bottom scale on an Equivolume shadow chart is based on volume.  volume is the guiding influence of price change. The equi volume shadow price style offers more information than the equivolume chart.

The height of each bar (or box) represents the trading range for the period - the highest and lowest prices recorded - while the width of the bar represents volume traded during the period.

 great deal about the commitment (The rate of withdrawal/entry in response to changing prices is referred to as the commitment of the party in control.) of buyers and sellers from the shape of the box.

An over square period shows that buyers and sellers are both strongly committed to their positions. This is a powerful reversal signal after a strong trend. Power periods show strong commitment by buyers in an up-trend (or sellers in a down-trend) and serve as confirmation of breakouts above resistance levels (or below support levels) in a chart pattern.

 The shape of each Equivolume shadow box provides a picture of the supply and demand for the security during a specific trading period. Short and wide boxes (heavy volume accompanied with small changes in price) tend to occur at turning points, while tall and narrow boxes (light volume accompanied with large changes in price) are more likely to occur in established trends. Power box is one in which both height and width increase substantially. Power boxes provide excellent confirmation to a breakout. A narrow box, due to light volume, puts the validity of a breakout in question.

Volume & price are tied together allowing the trader to see what instrument is moving and the underlying pressure involve in its movement.

Instead of viewing volume as a secondary indicator at the bottom of a chart, volume is elevated to be as important as price. This encapsulates the essence of the Equivolume shadow chart, to view trades in price and volume of instrument traded rather than the price of those instrument alone.



The Equivolume shadow chart uses Volume during that interval to control the width of the candlestick . Thus a fat candle means that the volume was high while a skinny one means that the volume was low. low volume often means the movement does not confirm a price move as much as large volume. Thus with an Equivolume shadow chart movements in the price that are very significant.

The basic interpretation of the Equivolume shadow chart is that short fat candles indicate a small change in price, but heavy volume. This has a tendency to occur at turning points. Tall and narrow candles indicate a small change in volume, but a large swing in price. This is seen often when prices are trending.

Point And Figure

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Point And Figure 

Point & Figure charts consist of columns of X's and O's that represent filtered price movements over time. The charts ignore the time factor and concentrate solely on movements in price - a column of X's or O's may take several periods to complete. It is a study of pure price movement in that, time is not taken into consideration while plotting the price action. Since only price changes are recorded, if no price change occurs then the chart is left untouched.

 The first X in a column is plotted one box above the last O in the previous column (and the first O in a column is plotted one box below the highest X). 



Each X indicates that price has increased (and each O indicates that price has decreased) by one box. The sensitivity of the chart can be varied by altering the box size. The box size is the minimum price movement recorded and serves to eliminate minor price fluctuations. Larger box sizes are used for charting longer time periods. Increases are represented by a rising stack of Xs, and decreases are represented by a declining stack of Os 

Creating a P&F Chart

On a P&F chart price movements are combined into either a rising column of X's or a falling column of O's. Each column is representing an uptrend or a downtrend. Each X or O occupies what is called a box on the chart. Each chart has a setting called the Box Size that is the amount that a instrument needs to move above the top of the current column of X's (or below the bottom of the current column of O's) before another X (or O) is added to that column.

Each chart has a second setting called the Reversal Amount that determines the amount that an instrument needs to move in the opposite direction (down for  rising column of X's, up for a column of O's) before a reversal occurs. Whenever this reversal threshold is crossed, a new column is started right next to the previous one, only moving in the opposite direction.

IF  the  instrument is in an uptrend and it  move down more than the reversal distance, the P&F chart will show a growing column of X's. A  instrument in a downtrend will cause a descending column of O's to appear. Only when the instrument changes direction by more than the reversal distance will a new column be added to the chart.

Point and Figure charts are used to identify support levels, resistance levels and chart patterns. There are several advantages to using P&F charts instead of the more traditional bar or candlestick charts.

P&F charts automatically eliminate the insignificant price movements.

  It also removes the often-misleading effects of time from the analysis process.

P&F helps to recognize trend line very easily. It is also use to stay focus on the important long- term price developments. It is used for

observing active market activity, and  very helpful in identifying support/resistance lines, buy/sell signals, and trend lines.

P&F charts are also very flexible in that they can easily be made more or less sensitive to price changes to discern between long and short-term trends. By varying box and reversal sizes, these charts can be adapted to almost any need. Through  different ways these charts can be used for entry and exit points. All types of traders can benefit from an applied understanding of P&F charting. Point and Figure charts can be a great time saver, conveniently summarizing trends. They also highlight major support and resistance levels.

Equivolume

VOGAZ - Technical Analysis Software
Equivolume 

Equivolume displays prices in a manner that emphasizes the relationship between price and volume. It measures the relationship between price and volume. Price is measured on the vertical axis and volume is measured on the horizontal axis.



Volume plays an important role in confirming price movements. It is sometimes difficult to track this relationship on a normal bar chart with volume plotted in a separate slot below. This is overcome by plotting price and volume activity on a single chart.

Equivolume combines price and volume in a two-dimensional box. The top line of the box is the high for the period and the bottom line is the low for the period. The width of the box is the unique feature of Equivolume, it represents the volume for the period. The bottom scale on an Equivolume chart is based on volume. This suggests that volume is the guiding influence of price change.

The height of each bar (or box) represents the trading range for the period - the highest and lowest prices recorded - while the width of the bar represents volume traded during the period.



A  great deal about the commitment (The rate of withdrawal/entry in response to changing prices is referred to as the commitment of the party in control.) of buyers and sellers from the shape of the box.

An over square period shows that buyers and sellers are both strongly committed to their positions. This is a powerful reversal signal after a strong trend. Power periods show strong commitment by buyers in an up-trend (or sellers in a down-trend) and serve as confirmation of breakouts above resistance levels (or below support levels) in a chart pattern.

 The shape of each Equivolume box provides a picture of the supply and demand for the security during a specific trading period. Short and wide boxes (heavy volume accompanied with small changes in price) tend to occur at turning points, while tall and narrow boxes (light volume accompanied with large changes in price) are more likely to occur in established trends. Power box is one in which both height and width increase substantially. Power boxes provide excellent confirmation to a breakout. A narrow box, due to light volume, puts the validity of a breakout in question.

Volume & price are tied together allowing the trader to see what instrument is moving and the underlying pressure involve in its movement.

Instead of viewing volume as a secondary indicator at the bottom of a chart, volume is elevated to be as important as price. This encapsulates the essence of the Equivolume chart, to view trades in price and volume of instrument traded rather than the price of those instrument alone.

The Equivolume chart uses Volume during that interval to control the width of the candlestick body. The wicks are the same as a regular candlestick. Thus a fat candle means that the volume was high while a skinny one means that the volume was low. low volume often means the movement does not confirm a price move as much as large volume. Thus with an Equivolume chart we can see movements in the price that are very significant.

The basic interpretation of the Equivolume chart is that short fat candles indicate a small change in price, but heavy volume. This has a tendency to occur at turning points. Tall and narrow candles indicate a small change in volume, but a large swing in price. This is seen often when prices are trending.

Candle Volume

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Candle Volume 

Candlevolume charts are a unique hybrid of Equivolume and candlestick charts. Candlevolume charts possess the shadows and body characteristics of candlestick charts, plus the volume width attribute of Equivolume charts.

The combination gives the unique ability to study candlestick patterns in combination with their volume related movements. The shape of each Equivolume box provides a picture of the supply and demand for the security during a specific trading period. Short and wide boxes (heavy volume accompanied with small changes in price) tend to occur at turning points, while tall and narrow boxes (light volume accompanied with large changes in price) are more likely to occur in established trends.

Candlevolume charts are like candlestick charts in that they indicate the open/close/high/low and a quick reference of market trend.  In addition the candlesticks widen or are thinned as a measure of the volume recorded for that particular period.  Candlevolume charts represent price and volume data in each candlestick.

They are constructed as regular candlestick charts with upper and lower shadows, filled and hollow real bodies. Their distinctive characteristic is the width of each candlestick, which varies based on the volume for that particular time period. The higher the volume, the wider the real body of the candlestick.



A “Candlevolume” chart is  like a regular candlestick chart  just  differs  as volume increases or decreases, the body of the candlestick widens or narrows. In  a glance, the trader can gain confidence as to the validity of the chart pattern.

Candle volume chart is a great tool for charting. They can be used with charts of all periods. They are especially valuable for intra day charts and will flag a jump in volume that often occurs at the onset of an intra day move. The shape of each Equivolume box provides a picture of the supply and demand for the security during a specific trading period. This type of chart gives the observer a clear picture of whether an increase of volume is contributing to the movement of a stock, future or index. This combination gives the unique ability to study Candlestick patterns in combination with their volume. Candlevolume charts is  particularly useful when searching in the  market likely to break out of a sideways movement.

Candle Stick

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Candle Stick 

Japanese Candlestick chart  resemble candle with their wick. Candle trading techniques is the best   forms of technical analysis.

Candlestick Chart is the oldest type of charts used for price prediction. There are four elements necessary to construct a candlestick chart, the OPEN, HIGH, LOW and CLOSING price for a given time period. The period can be anything from a minute to a month.

 The body of the candlestick is called the real body, and represents the range between the open and closing prices. Real bodies can be either long or short and either red or green. The difference is the use of color to show if the market was up or down over the period. When the real body is red, it means the close was lower than the open. If the real body is green, it means the close was higher than the open.

The thin vertical line above and/or below the real body is called shadow. Shadows can also be either long or short. It shows the high and a low price of that period's trading. If the upper shadow on the red body is short, it indicates that the open was closer to the high. And a short upper shadow on a green body indictates that the close was near the high. The relationship between the open, high, low, and close determines the look of the candlestick.


 Candlestick charts are easy to understand because data required to draw  this chart is same as that needed for the bar chart. candlestick charts  is  visually appealing and easier to interpret. Each candlestick provides an easy-to-decipher picture of price action.

The Candlestick charts dramatically illustrate changes in the underlying supply/demand lines. Immediately  It can be seen and compare the relationship between the open and close as well as the high and low.

The relationship between the open and close is considered vital information and forms the essence of candlesticks. Green (or White) candlesticks, where the close is greater than the open, indicate buying pressure. Red (or Black) candlesticks, where the close is less than the open, indicate selling pressure.

The Japanese Candlestick investing signals have to be considered one of the most tested, proven technical trading programs. There is one dynamically powerful aspect of these reversal signals. They are created by the change in trader sentiment. Prices of trading entities move based on the emotional perception of traders. Japanese Candlestick investing signals are the visual depiction of the accumulative investment decisions pertaining to a trading entity. The Candlestick trading signals are the refined interpretation of fear and greed.

Candlestick tools will give  a jump on the competition. It not only shows the trend of move, as does bar chart, but, unlike bar charts, candle charts also show the force underpinning the move. many of the candle signals are given in few sessions rather than weeks often needed for bar chart signals. Thus it helps to enter & exit market with better timing

Candlestick charting tools will help to preserve the capital. As the capital preservation is important in volatile market, it often sends out indications that a new high or new low may not be sustained.

Candlesticks charts can be used in stocks, futures and any market that has open, high, low and close.