The Candlestick Period or Timeframe

The Japanese candlestick, hereafter simply referred to as candlestick or candle, conveys the open, high, low, close price points for the period or timeframe falling into two broad categories – real-time analysis and historical analysis.

Real-time candlestick analysis is particularly relevant to the day-trader in order to interpret, analyze and make trading decisions down to the minute level or even lower (as may be the case for forex currency trading).

Historical candlestick analysis is particularly relevant to traders who engage in active or short-term trading. A commonly used period or timeframe is daily where the candlestick technical analysis is performed using end of day historical data.

Charting software is widely available for displaying candlestick charts, in the real-time (intra-day) sense or in the historical (inter-day) sense. Charting software and access to the stock data come in a variety of forms available on the local computer as well as through web sites, and these may be free or paid services.

Beyond the actual charting function, there is the other side which is the recognition of the candlestick patterns and how they form trends and trend reversals which can then be applied to make trading decisions. Candlestick technical analysis involves the availability of candlestick charting functions along with the recognition and interpretation of candlestick pattern formations. The former is simply provided by computing technology; no one plots charts from stock data anymore. The latter is a function indulged by the human with or without computing technology assistance.

Candlestick patterns may span 1, 2, 3 or even more periods. The recognition of candlestick patterns involves an interpretation aspect as not all pattern formations are strictly defined in precise numerical terms. And beyond that, trading decisions have to be made based on the candlestick patterns.

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