how to Take First Learning Step in Forex Trading

Bar charts are also called “OHLC” charts, because they indicate the Open, the High, the Low, and the Close for that particular currency. Here’s an example of a price bar:

Candlestick bars still indicate the high-to-low range with a vertier, in candlestick charting, the larger block (or body) in the middle indicates the range between the opening and closing prices. Traditionally, if the block in the middle is filled or colored in, then the currency pair closed lower

In the following example, the ‘filled color’ is black. For our ‘filled’ blocks, the top of the block is the opening price, and the bottom of the block is the closing

price. If the closing price is higher than the opening price, then the block in the middle will be “white” or hollow or unfilled.

Here at BabyPips.com, we don’t like to use the traditional black and white candlesticks. They just look so unappealing. And since we spend so much time looking at charts, we feel it’s easier to look at a chart that’s colored.

A color television is much better than a black and white television, so why not splash some color on those candlestick charts?e simply substituted green instead of white, and red instead of black. This means that if the price closed higher than it opened, the candlestick would be green.

f the price closed lower than it opened, the candlestick would be red.er lessons, you will see how using green and red candles will allow you to “see” things on the charts much faster, such as uptrend/downtrends and possible reversal points.

For now, just remember that on forex charts, we use red and green candlesticks instead of black and white and we will be using these colors from now on.

The purpose of candlestick charting is strictly to serve as a visual aid, since the exact same information appears on an OHLC bar chart. The advantages of candlestick charting are:

Candlesticks are easy to interpret, and are a good place for beginners to start figuring out forex chart analysis.
Candlesticks are easy to use! Your eyes adapt almost immediately to the information in the bar notation. Plus, research shows that visuals help with studying, so it might help with trading as well!

“shooting star,” which helps you to remember what the pattern means.
Candlesticks are good at identifying market turning points – reversals from an uptrend to a downtrend or a downtrend to an uptrend. You will learn more about this later.

Now that you know why candlesticks are so cool, it’s time to let you know that we will be using candlestick forex charts for most, if not all of forex chart examples on this site.

agram above. As you can see, this zigzag pattern is making its way up (bull market). When the forex market moves up and then pulls back, the highest point reached before it pulled back is no

arket continues up again, the lowest point reached before it started back is now support. In this way, resistance and support are continually formed as the forex market oscillates over time. The reverse is true

Often times you will see a support or resistance level that appears broken, but soon after find out that the market was just testing it. With candlestick charts, these “tests” of support and resistance are usually