Candle Stick patterns are the best tool for trading inIntraday as well as Short Term Trading styles. In the Candle Stick system the price movements are represented by the candles of various sizes and colors. The Red candles represent the price fall and the green candle indicates the price rise. The candle has a body and the upper shadow as well as lower shadow. The body represents the difference between the open price and the close price of the period of candle sticks formation. If the open price within the period is lower than the close price, it will be represented by the green candles. Similarly when the open price is higher than the close price it will be represented by Red Candles. The Upper and lower shadows indicates the high and the low the price formed during the period.
The important factor of Trading with candle stick pattern is the period of the candle sticks. For the intraday trading generally the time frame of candles is kept near to 10 Minutes or 15 Minutes. On the other hand for the short term or swing trading the time frame is usually a day. It is also possible to analyze both the time frames one longer and one shorter. The longer one will give a broad direction of the price movement and the smaller time frame candle will determine an exact entry for the trade.
The Candle Stick patterns can be used with other indicators like Bollinger bands to confirm the price movements. The above methods are extensively used by traders and even the technical analysts in various advisory firms to provide accurate stock market tips to the clients. Money Classic Research is one such advisory firm which provides accurate tips in the form of Equity Tips and Intraday Trading Tips.
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