Knowing the Meaning of Color on a Candlestick, Have You Understood Well?
Beginner traders who are just starting to make transactions on the forex market may feel confused by the meaning of the colors on the candlestick. Broadly speaking the candlestick will give a trader an idea of the rise and fall of prices.
For example, like this, if you choose a 1-hour timeframe, then 1 candlestick is an illustration of the price change for 1 hour.
With the candlestick, you can easily find the price movement at the beginning and go in the next direction. This can happen because the candlestick is composed of 4 price components.
First is Open which shows the price at the first time in the period of candlestick formation. The second is High which is the highest price in the period of formation of a candlestick. Third, there is Low which is the lowest price in the period of candlestick formation. The last is Close which is the price when the candlestick is finished.
Understanding Candlesticks Further
If on the previous candlestick, you see the Close price higher than the Open price. That means the previous candlestick is called an up candle. Vice versa, if the Close price is lower than the Open price, then it is called a down candlestick.
In order to be able to distinguish where the candle rises and the candle goes down, color differences are given. If the candlestick is not colored, then you might be wrong when you see the price.
The color difference in the candlestick is actually very simple to understand well. Bright or green colors indicate a rising candlestick, while a dark or red color indicates that the candlestick is decreasing.
The color displayed on the candlestick can be arranged from the Meta you use. The first step that needs to be done is to right-click on the chart area, select Properties, in the Color Tab you can choose the color.
If using the mobile version, you can click Menu, Select Settings, Color, and then Customize Color Scheme to set the color.
Candlestick Benefits For A Trader
Some of you might think that what a trader benefits from knowing the up and down candlesticks. This is, of course, useful and you can use it to get profit on the trading done.
For example, you already know that some of the candlesticks that have been formed are the majority going up, so this shows the rising price trend. With this in mind, you can take action to buy or buy.
With the understanding and explanation related to the basis of forex, it is expected that you can become a better trader in making a profit.
Although simple and not complicated to understand, an explanation of this is very important to all traders. Do not let you make a mistake just because you do not understand about the candlestick being used.
We hope the explanation above can provide many benefits and inspiration to all of you who have read it. If there are questions related to the above topic, please ask us through the comments column below. We will be happy to answer any questions that come in to help you.
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