Without the help of forex tool it would have been very difficult to trade in the forex market. The reason why currency trading has become so popular is because of the presence of a huge variety of tools. Previously, FX was only restricted to investment banks and multi national companies.  It was only after the advent of tools that even a common individual could trade in this market. Forex charts have proved a boon to this market. Charts come in different formats like the line charts, point and figure charts, and bar charts and so on. One particular variety is called candlestick chart.

This type of chart is based on an ancient Japanese method. This chart provides complete information about the different rates of a particular currency pair. It provides information about the opening rates of a currency, its closing rate, the highest rate in a particular time frame, the lowest rate in a particular timeframe and so on. What makes candlestick chart really appealing is its feature of displaying every rate in the form of candle. This makes it very easy to comprehend the chart.

 This forex tool makes it very easy for the trader to have an idea of the market trend in a glance. There are 2 different candles used to represent two different market trends viz the up trend and the down trend. The transparent candles show an up trend where as the opaque one shows the downtrend. This makes it very easy to grasp the currency trading trends. If you have traded in this market, you would have realized that a delay of few seconds can cost you big time. With the visual features provided by candlestick chart, you can understand the chart within no time. A few seconds saved can prove to be invaluable.

 A few more features make this forex tool indispensable. The length of the body shows the difference between the opening and the closing rates. It shows the range between the opening and closing rates between the currency pairs. On the other hand, the entire length of the candle including the wicks on both the sides shows the range of the highest and the lowest points within a particular timeframe. These features give an idea about the volatility in the market.

Some of the commonly used patterns of candlestick chart are as follows: When you are expecting a rise in prices, various patterns used are hammer, inverted hammer, harami, doji start, morning star etc. If you are expecting a drop in the prices, the patterns used are shooting star, dark cloud cover, evening star, hanging men and so on.

 The above mentioned are some of the features of a candlestick chart.