Chapter 4
Burning the Candle at Both Ends with Candlestick Charts
IN THIS CHAPTER
Introducing candlesticks
Making candlesticks colorful
Putting together a candlestick chart
Using candlesticks for decision making
Candlestick charts provide users a graphic way to display price movement throughout the day on a daily chart. This type of display first became popular in Japan and today is one of the most popular charts in North America, especially for stock traders who need information for shorter periods of time, such as hourly or daily.
In this chapter, we break down the parts and colors of a candlestick chart, explain how to create one, and show you how to use one to make investing decisions.
Each person has a different way of thinking about the market, which means different displays can be suited to different types of investors. Many longer-term investors find candlesticks too complex and would like to use something less detailed. You may find bar charts (see Chapter 5) or line charts ...
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