Ever period of the chart is drawn by a single candle bar. If it is a daily chart, every day will be drawn by 1 candle stick. In 1 hour chart will get one bar per hour, in 30 minutes chart for every 30 minutes and so on.
Every bar will have 4 vital points and a significant color - Green or Red. The four points are
Open
High
Low
Close
Of course the order will change depends upon the color.
- If a candle closes above the open then it is a GREEN candle. (Refer the image above)
- If a candle closes below the open than it is a RED candle. (Refer the image above)
- The Line above the candle body is wick.
- The Line below the candle body is called tail.
The top image shows all the 4 points and the color. Any single candle will have these four points and any of these two colors. But this is not a perfect candle! I mean no candle can be a perfect candle and no candle is imperfect either. Every candle reflects the price movement on that period. That is it.
Below is the image of 30 Minutes chart of USDJPY (US Dollar to Japanese Yen)
See the bars of GREEN & RED plotted in different shapes!
Some have opening and low at same point. Some Opening and High at same point. Some High and close at same point. Some Low and Close at same point. Some time you may see all four same. Like a -. It means no price change at all. :)
Click the chart below to see the different bars. Next post I will tell more about single bar, before we move to chart patterns.
