Technical Analysis can be defined as the attempt to exploit movements in the prices of a financial asset. These movements in prices often recur or are to some extent predictable, thus allowing us to have an advantage in Forex trading.
One of the main pillars of Technical Analysis is that all information is contained in the price. The integration of new relevant information that comes to the market is mirrored in its price. Traders are helping to price prices properly as they are in possession of new data. In this way the quotation of an asset incorporates all the available information about it.
For a correct Technical Analysis we need to analyze the candles and their main patterns.
To interpret the candles, we have to understand how the body of the figure of a candle is formed.
The body of a candle is formed by the difference between the opening price and the closing of an asset in the period that one wants to analyze.
A red candle (bear), means that the closing price was below the opening price. And a green candle (bull), means that the closing pr…