What is Candlevolume Chart?
It is a stock charts used in charting and study of chart patterns in technical analysis. They combine the features of Equivolume charts and Candlestick charts.
These charts have the wicks or tails and filled/unfilled body features of Candlestick charts, as well as the volume-based body width of Equivolume charts. This combination gives us the unique ability to study Candlestick patterns in combination with their volume.
Since the volume factor is merged with the price factor, instead of adding it as a separate indicator at the bottom of the chart the value for time factor on the x-axis is reduced.
Analyzing candlevolume charts is similar to candlestick charts. High volume emphasis is made clear with wide candles.
Wide and short candlesticks indicate uncertainty. High volume indicates the increased interest of the traders to enter and exit the position of that stock. The trend might reverse.
Wide and tall candles usually indicates strong momentum. Such candlesticks commonly appear at breakouts. Wide body indicates increased interest of the traders in that stock. Tall body with small shadow or no shadow indicates momentum and strength of the trend.
A thin candle at breakout means that not many traders are interested in the event. It is going to be a false breakout or the breakout is not going to sustain longer.
Study the chart given below.
Compare the candles corresponding to high volume with other candles with low volume.
Compare this candlestick chart with the chart above.
There are varieties of simple candlestick patterns. Click on the names to read and learn more about them.
White Candles are bullish lines in candlestick and candlevolume charts. They signify that the closing price is higher than opening price for that time period.
Black Candles or black candlesticks are bearish lines in candlestick and candlevolume charts. They signify that the closing price is lower than opening price for that time period.
Long lower shadow of a candlestick indicates that the bears are loosing power and bulls are gaining power in that time period.
Long upper shadow of a candlestick indicates that the bulls are loosing power and bears are gaining power in that time period.
A Candlestick Hammer is a reversal candle pattern with long lower shadow and no upper wick. They are bullish in nature.
Inverted Hammer is a bullish reversal candlestick pattern. They occur at the bottom of a down trend. It is so named because a Candlestick Hammer, which is also a bullish reversal pattern is placed upside down.
Shooting Star is a bearish reversal candlesticks pattern. They occur at the top of an up trend.
A Hanging Man candlestick is a reversal candle pattern with long lower shadow and no upper wick. They are bearish in nature.
Spinning Top candlestick is a candle pattern with small real body. They represent the areas of uncertainty.
Doji candlestick is a candle pattern with out a real body. They represent the areas of uncertainty.
Dragonfly Doji candlestick is a candle pattern with out a real body and upper shadow. They represent the areas of uncertainty.
Gravestone Doji candlestick is a candle pattern with out a real body and lower shadow. They represent the areas of uncertainty.
Marubozu White candlestick is a white candlestick with out shadows. They represent strong bullish trend in the market.
Marubozu Black candlestick is a black candlestick with out shadows. They represent strong bearish trend in the market.