The 4 advantages of candlestick charts


Japanese candle chart analysis, so called because the lines resemble candles, have been refined by generations of use in the Far East. These charts are now used internationally by traders, investors and premier financial institutions. (See my recent article on the 10 types of candle stick patterns).

There are 4 advantages to using candle charts in your every day approach to trading and I’ve outlined them on the following pages:


They are easy to understand

Anyone, from the first-time chartist to the seasoned professional can easily harness the power of candle charts. This is because, as will be shown later, the same data required to draw a bar chart (high, low, open and close) is used for a candle chart.

New to candle stick charts?  Check out my free video on reading candle charts here.

They provide earlier indications of market turns.

Candle charts can send out reversal signals in a few sessions, rather than the weeks often needed for a bar chart reversal signal. Thus, market turns with candle charts will frequently be in advance of traditional indicators. This will help you to enter and exit the market with better timing.


Candle Charts furnish unique market insights

Candle charts not only show the trend of the move, as does a bar chart, but, unlike bar charts, candle charts also show the force underpinning the move.


They enhance Western charting analysis

Any Western technical tool you now use can also be used on a candle chart. Candle charts, however, will give you timing and trading benefits not available with bar charts. This merging of Eastern and Western analysis will give you a jump on those who use only traditional Western charting techniques.

New to candlestick charting.  Check out my free video on reading candle charts here.





  1. Larry says:

    ” If “boring” means returning to the basics of relationship banking, strong underwriting and transparent products, he’s right. On top of all this we have the mountains of debt that have supported our economies in the west for so long. Until recently the umbilical cord and the placenta were considered medical waste and simply disposed of after birth.

  2. Great article. If I might also add. If you are an active
    trader, make sure that you have ways to access your account even
    if you are not near your computer or the site is down.

    Most online trading companies give you the option of
    calling or faxing trades. Remember that there may be additional fees
    associated with these alternate trading methods, however.


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