In this video, you will learn about the basics of candlesticks and how they compare with a bar chart. When you trade using candlesticks, there are candlestick and the candlestick patterns. The patterns normally consist of 2 or 3 candlesticks observed as a group to observe the sentiment of the market.
On the left, you have the white candlestick. The open price is lower than the close price. Normally it is indicated in green color. It is also called a bullish candlestick, because the bulls are gaining control. On the right, you have the black candlestick, which is also a bearish candlestick. It is normally indicated in red color. Here, the open price is higher than the close price, meaning the bears are in control. The candlesticks contain wicks above and below, which represent the high and low of the candlestick.
Also, on the left, you can see a single bar from a bar chart. It is similar in representation compared to a candlestick, but a little bit harder to read. The open price is on the left, and the close price is on the right. The high price is on the top and the low price is on the bottom.
However, candlestick charts are easier to read in terms of analyzing price action in the market. They are preferred by the successful forex traders. You should learn about various candlestick reversal patterns if you want to trade reversals in forex trading. An example would be the morning star reversal pattern.