Forex Charting with Candlesticks …
Forex Charting with Candlesticks
An essential part of trading Forex is keeping track of the market. This involves the use of live Forex charts. The point of charting is to be able to identify market movements and trends and anticipate the next move of the market. Forex charting with Candlesticks is an ideal way to see the future and gain profits in Forex trading. So, if Forex charting with candlesticks is such a great deal, what are Candlesticks and how do they help chart the Forex market?
In Japan when there were still Samurai in charge there were rice traders. These traders recorded the market price of rice from day to day, week to week, month to month, and year to year. As all commodity traders do, they watched the weather and other supply and demand issues. At one point traders came to realize that price patterns for rice repeated themselves. It became possible to successfully trade rice without really watching the basics that eventually set the price. In keeping track of price movement they recorded the opening and closing price of the day and the range of price for the day. Then they did this for every day. The opening and closing price of the day was represented by a rectangle. It was clear or colored white if the day ended higher than it opened and black if it closed down. The rectangle had lines extending above and below to represent the range of trading for the day. The length of the lines and the rectangle were proportionate to the price movement of the day. These signals looked like candles with wicks on each end. The rectangle was called the candle and the lines were called shadows. These symbols were superimposed on a line graph that also displayed end of day market pricing.
Fast Forward to Today
Japanese candlesticks were one of the first ways to engage in technical trading. They are still in use today for trading stocks, options, commodities, and Forex. Forex charting with candlesticks gives the trader a very clear view of pricing and quick insight into intraday price movement. Forex trading with candlesticks can be profitable for the trader who follows the rules. A basic tenet of Forex charting with candlesticks is to wait for clear signals which have a high degree of accuracy in predicting the next market move.