XAUUSD Japanese Candlesticks
XAUUSD with Candlestick
Brief History
Candlesticks were created in the 18th century by the legendary rice trader called Homma Munehisa to give an overview of the opening, high, low & closing market gold price over a given period of time.
They were used by the legendary rice trader to predict future market gold prices. After dominating trading the rice market, Munehisa after that eventually moved to Tokyo Exchange where he gained huge fortunes using this analysis method. He is said to have made over one hundred consecutive winning trades.
Types of XAUUSD charts
There are 3 types of charts used in XAUUSD: Line, bar & candles.
Line - plots a continuous line connecting closing gold prices of a xauusd.
Bars- displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW & CLOSE. The Opening gold price is displayed as a horizontal dash on the left and closing gold price as a horizontal dash on right.
The main disadvantage of a bars is that it is not visually appealing, therefore most traders don't use them.
Candlesticks Patterns - these use the same price data as bar charts (open, high, low, & close). However, they are displayed in a much more visually identifiable way which looks like a candle with wicks on both its ends.
How to Analyze Japanese Candlestick Charting Techniques
The rectangle part is called the body.
The high and low are described as shadows and drawn as poking lines.
The color is either blue or red
- (Blue or Green Color) - XAUUSD Prices moved up
- (Red Color) - XAUUSD Prices moved down
Most gold trading platforms like the MetaTrader 4, use colors to mark the direction. Colors used are blue or green: when the price moves upward, red: when price moves downward.
Candlesticks Vs. Bar Chart
When candles are used it is very easy to see if the gold price moved up or down as opposed to when a bars are used.
The Japanese Candlestick Charting Techniques also have very many formations that are used to trade the XAUUSD market. Japanese Candlestick Charting Techniques - candlesticks patterns have different technical analysis explanation and the most common Japanese Candlestick Charting Techniques are:
The above Japanese Candlestick Charting Techniques and Patterns is what makes the Japanese candlesticks popular among xauusd technical traders and it's why this type of analysis are the most widely used when it comes to analyzing the xauusd market. The analysis for these Japanese candlesticks pattern formations in xauusd trading is same as that one used in stocks trading - Japanese Candle Charting Techniques.
Drawing japanese Candlesticks Charts in MetaTrader 4 Software
To draw these on the MetaTrader 4, choose the MetaTrader 4 charts drawing tools within the "MT4 Toolbar" - shown below.
To view this toolbar in MetaTrader 4 go to "View" Next to file at top left corner of MetaTrader 4 Platform, Click "View", Then Click "Tool bars", Then check the "Charts" Button. The above tool bar will appear.
Once the above toolbar, appears you can then choose the type you want to convert to, If you want to view using the bar format, click the bar tool button as shown above, for line format click the line tool button key, for Japanese candles format click "candlesticks tool button".
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