Reasons Why Candlestick Are So Popular Today

Discussion in 'Technical Analysis' started by investmentlink, Dec 10, 2006.

  1. 1. Leading Indicator
    They have the ability to show reversal signals earlier then Western charting techniques. As such candlestick charts are a true leading indicator of market action.

    2. Pictorial
    They are very pictorial and describe the state of players' psychology the moment they unfold, all of which can be utilised to make meaningful trading decisions. It consists of hundreds of different pattern groups that accurately identify specific traits and tendencies.

    3. Versatile
    They can used alone or in combination with western technical tools. It prometes the ability to recognise complex pattern groups and predict the next possible outcome based on them.

    4. Can Be Applied To Any Time-Dimension
    It can be adapted for either short or long term trading (intraday, daily, weekly & monthly charts).

    5. Flexibility & Adaptability
    Can be applied to follow as many market desire - be it stocks, futures, currency or commodity.

    6. Time Tested Dependable & Useful
    Had been refined by generations of use in Japan. The fact that it is still very much in use today after more than 300 years since its discovery is testimony to its usefulness.

    by Steve Nelson
  2. Bar charts are better.
  3. bar charts are probably less stressful to read. u aint lookin' for useless patterns every freaking tick and that is a good thing.
  4. I love to use candlesticks......if the power ever goes out, they for some reason stay lit on my charts! :eek:

  5. hcour

    hcour Guest

    Bar charts (OHLC) show the exact same info as candlesticks. It's simply a personal preference, one has no advantage over the other.

  6. Oh boy... here we go...

    The formation of a bar or candlestick itself is really just a matter of preference on how you want to view the price action.

    Now, trading candlestick formations is a completely different story. Candlestick formations and patterns can show much more than a bar chart.

    Who is Steve Nelson? :D
  7. bar charts are better for longer time frames, but i use both. Candles on my daily chart, and bars on the 15.
  8. Lucrum


    I agree, the candlestick simply has a "body" emphasizing the difference between the open and close. This does make it easier to see the spread between open and close at a glance. But take away the body and what you have left is a OHLC bar.
  9. Bar charts are harder to see H/L/O/C for me. An I bar reveral looks just like a reversal on a candle. I guess it depends what suits your fancy really. I have been called on the effectiveness on reversal signals on candles based on time and that arguement has merit. Think about it. The difference between a doji and and evening star in a fast market like the russ could be the blink of an eye, say 2-3 seconds. So is it vaild just to trade off of candlestick formations, I think not, especially on smaller time frames.
  10. jj90


    I like the pretty colours.
    #10     Dec 10, 2006