Lesson 2: Learn how to read the currency pair graphs

There are different types of charts: Line charts, bar chart charts, point charts, etc.

However, there is a type of graph that is unanimous. The "Japanese Candlesticks" or "Candlesticks" charts , which we will present to you in this lesson.

Japanese chandelier graphics are made up of "candles"

Bullish candle and bear candle

With the Japanese candlesticks method, the graph is thus made up of a succession of "candles", each "candle" (see above) representing a period. On a graph M5, each candle represents a period of 5 minutes. On a graph H1, each candle represents a period of 1 hours, and so on.

When the beginning price of the period is lower than the end-of-period price, it means that the prices have increased and the candle is green (or other depending on your platform, the important thing being that the candles are bearish and bullish different).

In this case, the bottom of the candle represents the beginning price of the period, while the top represents the price at the end of the period. The upper "wick" represents the highest price achieved during the period, conversely for the lower wick.

The advantage of this type of graph is therefore to provide as much information as possible.

This is undoubtedly the method to be preferred, if only because 99.9% of traders only use this type of graphs .

The other interest of Japanese chandelier charts is the ability to directly analyze the different types of candles that may appear on the charts.

You will find some examples below:

This type of candle appears when the beginning price of the period is equal to the end-of-period price and the prices have not changed during the period. 
Interpreting:

This particular candle (called "doji") means that prices have risen and fallen during the period, but end the period at the same rate as they began. 
Interpretation: Hesitation, possibility of reversal.

This candle means that the end-of-period price is the same as the beginning price of the period, but that prices have "tried to fall" during the period. 
Interpretation: Possibility of turning bullish

Conversely, here courses have "tried to climb", but end at the same level at the end of the period. 
Interpretation: Possibility of downturn