There are many different trading charts for crypto trading as well as in forex markets. For that reason, having a better understanding of what those candles mean, will help us make meaningful decisions and place our stop loss accordingly
What does the charts show on them?
Charts illustrate different time intervals for different purposes. For example: in scalping for cryptocurrencies the time intervals of 1 minute to 1 hour are very popular. On the other hand, stock markets often use daily, monthly and weekly charts.
Company/fund or Cryptocurrencies being traded are shown in the chart page, also the ticker symbol will be shown as 3 letters in the top of the chart.
Also, if we are seeing the exchange in a forex market or crypto assets three symbols will show both symbols. For example, BNB/USDT for Binance coin and Tether.
In the stock market a B will show at the top of the chart and will represent de Bid or the highest price at which someone will buy that specific stock.
Ask will be shown as an A letter and will show the lowest price at which someone is willing to sell. Last shows the last trade, Net CHG and Net% CHG indicates the difference between the last trade and the price at close in the previous close.
PC represents the previous close of the stock, High and Low represent the highest and the lowest price at which the stock has been traded for the day. Volume represents how much the stock is being traded compared to the most recent trading days.
What do the so called “Candlesticks” represent?
The bars shown on a chart are named after their shape, and have different parts. Each has a “real body” that is the thickest bar on the candle and depending on the color of the candle, it represents the price at which a stock price opened and closed.
If the color of the candlestick is green the bottom side of the real body is the opening price and the top side is the closing price, evidently if the candle is red the bottom will be the closing price and the top will be the opening price for a specific time frame.
The wicks of the candle show the highest price at which the stock or crypto asset was sold (if the wick is on top of the real body) or the lowest price at which the stock was sold (if the wick is under the candle’s real body).
The bars on some charts present the same information as candlesticks but people prefer the candlestick as it helps predict the trend of prices.