How To Use Japanese Candlesticks In Forex Trading

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In the 1700s a Japanese man named Homma, a trader in the futures market, developed a method of technical analysis to analyze the price of rice contracts known as candlestick charting.

Candlestick charts display the high, low, open, and close for a commodity each day over a specified period of time, in a format similar to a bar chart, but in a manner that maximizes the relationship between the opening and closing prices.

Only by constantly learning about Forex trading can you hope to achieve your financial goals!

Keep your education going forward by Reading "How To Use Japanese Candlesticks In Forex Trading".

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How To Use Japanese Candlesticks In Forex Trading

  1. 1. How to Use Japanese Candlesticks in Forex Trading Presentation: Ray Caran
  2. 2. How to Use Japanese Candlesticks in Forex Trading In the 1700s a Japanese man named Homma, a trader in the futures market, developed a method of technical analysis to analyze the price of rice contracts known as candlestick charting. Candlestick charts display the high, low, open, and close for a commodity each day over a specified period of time, in a format similar to a bar chart, but in a manner that maximizes the relationship between the opening and closing prices. A narrow line shows the day's price range. A wider body marks the area between the open and the close, referred to as real body. If the close is above the open, the body is white or green (not filled); if the close is below the open, the body is black or red (filled). Steve Nison is normally credited with popularizing candlestick charting in the west and is recognized as a leading expert on how a trader might interpret the readings.
  3. 3. Candlesticks provide specific visual cues that make understanding price movement easier. Trading with Japanese Candle Charts allow speculators to better comprehend market feelings. Offering a wider range of information than traditional bar charts candlesticks give emphasis to the relationship between close price and open price. Traders who use candlesticks are likely to more quickly identify different types of price action that tend to predict reversals or continuations in trends. Furthermore, combined with other technical analysis tools, candlestick pattern analysis can be a very useful way to select entry and exit points. Candlestick charts are much more appealing and understandable than a standard twodimensional bar chart. There are four elements necessary to construct a candlestick chart, the OPEN, HIGH, LOW and CLOSING price for a given time period.
  4. 4. There are multiple forms of candlestick chart patterns: White candlestick - signals uptrend movement Black candlestick - signals downtrend movement Long lower shadow - bullish signal Long upper shadow - bearish signal Hammer - a bullish pattern during a downtrend; Shaven head - a bullish pattern during a downtrend; Hanging man - bearish pattern during an uptrend Inverted hammer - signals bottom reversal, however confirmation must be obtained from next trade; Shaven bottom - signaling bottom reversal, however confirmation must be obtained from next trade; Shooting star - a bearish pattern during an uptrend
  5. 5. Spinning top white - neutral pattern, meaningful in combination with other candlestick patterns Spinning top black - neutral pattern, meaningful in combination with other candlestick patterns Doji - neutral pattern, meaningful in combination with other candlestick patterns Long legged doji - signals a top reversal Dragonfly doji - signals trend reversal Gravestone doji - signals trend reversal Marubozu white - dominant bullish trades, continued bullish trend Marubozu black - dominant bearish trades, continued bearish trend Candlestick charts are a visual aid for decision making in stock, forex, commodity, and options trading. This is a very simplified primer on Japanese Candlesticks. This information on Forex trading will definitely point you in the right direction if you want to make some real money from your Forex investments.
  6. 6. How Can I Protect My Money? Understand the technical analysis portion of Forex investing before you invest your hard earned money! You have just read “How to Use Japanese Candlesticks in Forex Trading”. Don’t stop learning! Your success in Forex trading is directly tied to your learning level. You can spend a lot of money to download programs that have promised to make you tons of money. Do your research and look into what is available. Today there are many amazing programs that will put your Forex Trading on autopilot. Look into those programs. Click here if you would like to read about an amazing automatic Forex Trading System that will help you to make MONEY!

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