We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Breaking news

ECB leaves monetary policy unchanged

Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.01%, while traders in EUR/USD are at opposite extremes with 72.37%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/hq8WWwEKXP
  • Bitcoin Price Outlook - via @DailyFX $BTC chart coiled like a spring set to snap; potential pennant pattern breakout and Bollinger Band expansion in focus. Details at Link - https://www.dailyfx.com/forex/market_alert/2020/07/16/btc-price-outlook-bitcoin-chart-coiled-pennant-breakout-eyed.html #Bitcoin #Trading #Crypto #TechnicalAnalysis #Blockchain https://t.co/LYDdO726ij
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.12% France 40: 0.04% Germany 30: 0.03% US 500: -0.62% Wall Street: -0.74% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/hLhW1Z3eWS
  • Many thanks everyone for helping me reach 4,000 followers. Much appreciated...
  • Fed's Evans: Supports 'in it to win it' policies - BBG
  • The tone of the July ECB press conference was cautiously optimistic, with ECB President Christine Lagarde stressing that an “ambitious and coordinated fiscal stance remains critical.”Get your market update from @CVecchioFX here:https://t.co/YBsFE5gPdW https://t.co/RJqUacF6Ve
  • Fed's Evans says hitting 2% inflation target is very important - BBG
  • Fed's Evans says spread of COVID-19 will likely hold consumer activity down $DXY $SPX
  • Heads Up:🇺🇸 Fed Evans Speech due at 17:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-07-16
  • US Dollar Price Action Setups: EUR/USD, GBP/USD, AUD/USD https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/07/16/US-Dollar-Price-Action-USD-EURUSD-EUR-USD-GBP-USD-AUD-USD-JS.html $USD $EURUSD $GBPUSD $AUDUSD
Interpreting "Closed" Candlesticks

Interpreting "Closed" Candlesticks

2011-11-03 00:18:00
Richard Krivo, Trading Instructor
Share:

The phrase “closed candle” has been brought up several times recently in our LIVE online Trading Room webinars. So, the question begs asking…what is a closed candle and why is it important?

Each chart has its own time frame be it Daily, 4 hour, 1 hour, 30 minutes and so forth. Each individual candle on any chart represents the time frame of that chart. So a candle on a Daily chart represents one day, 24 hours of trading time. Each candle on a 30 minute chart, for example, represents 30 minutes of trading time.At the end of the candle’s duration, let’s say 30 minutes on a 30 minute chart, that 30 minute candle is considered to be “closed” and a new candle immediately opens to right of it. It is at that point that we would be able to use that just closed candle as part of our analysis. Until a candle is closed, we really do not know what kind of a candle it will ultimately turn out to be (doji, engulfing, etc.) or at what price level it will close. Therefore, we cannot base any trading decisions on an “open” candle.

Take a look at the chart below for a visual on this…

Interpreting_Closed_Candlesticks_body_Closed_Candles.png, Interpreting "Closed" Candlesticks

Looking at this current 4 Hour chart of the EURCAD, we can see that for about a month price action has not “closed” below our support line at 1.3829. There have been numerous times when price has “wicked” below that level but it has yet to close below that level. Why is that important?

If price wicks below/above a certain level, it is much less compelling technical information than if price actually closes below/above a certain level. If price cannot close below a support level, that shows that there is not enough selling momentum to keep price below that level for an extended period of time. While there may be enough bearish momentum to push the price below 1.3829 for a time, there is not sufficient bearish momentum to sustain that level.

Using the chart as an example, let’s say that a trader wants to short this EURCAD pair when price merely “wicked” below 1.3829. In that case, we can see that the trader would have entered short many times. We can also see that each time price wicked below support, price then moved strongly to the upside each time potentially stopping our trader out.

If however our trader would only short the pair if price closed below 1.3829, (in other words the body of the candle would be below 1.3829 and not just the wick) they would have yet to be in a single trade. They would have avoided the strong pullbacks that are evident on the chart.

Keep in mind that entering a trade based on a close above/below a support or resistance level does not automatically insure that a trade will work out. It does however offer a greater likelihood of the trade moving in the trader’s intended direction.

Additional Resources:

Basic Candlestick Information

Candlestick Patterns (Live Account Username and Password required for Access)

Using Candlesticks for Entries

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.