Anticipate a Forex Market Reversal with the Doji Signal An eternal quandary when trading currency markets is that profits commonly come from volatile markets and so does risk. Successful Forex traders commonly rely on technical analysis to read market sentiment. For example, they will anticipate a Forex market reversal with the Doji signal. Forex trading with candlesticks is can be a clear means of seeing past the confusion inherent in day to day markets to profits. Here we will discuss Japanese candlesticks in Forex trading and how to anticipate a Forex market reversal with the Doji signal. Japanese Candlesticks: the Doji Hundreds of years ago smart rice traders in Japan devised a means of clearly indicating what the market was doing. They watched price movements, saw that some were repetitive, and that these same repetitive patterns had predictive value. The ones that meant something to the trader were given names and are used today to help equity traders in many markets profit as prices change. Here we are talking about how to anticipate a Forex market reversal with the Doji signal. A Japanese candlestick is a rectangle superimposed on an equity price chart. The candle body is white if the equity closed up for the day and black if it closed down. The top and bottom of the rectangle, the body of the so called candle, are the opening or closing prices of the day depending on whether it was an up or down day. Lines, shadows, extending above and below the candle represent the extremes for trading for the day. The Doji candlestick has a very flat candle body with shadows of varying lengths. This means that the Forex pair that the candle represents opened and closed at nearly the same price. Although Japanese candlestick signals may comprise several candles the Doji signal is only one candlestick. Although looking at volatility may help you pick the most profitable currency pair you will most successfully trade that pair using a clear technical analysis tool such as the Doji signal. Anticipate a Forex Market Reversal with the Doji Signal The Doji signal tells us that the market is at a moment of indecision. That fact by itself does not help us anticipate a Forex market reversal with the Doji signal. It is what precedes the Doji that sets the stage. A market in an established upward move may come to point where it is overbought. At the point more sellers move into the market and balance buying pressure. The Forex pair trades up and down for the day and settles where it started. This often forecasts a downward reversal. Likewise an established downward Forex market can come to a point where it is oversold and buyers will step in. If the trading day ends up about even, in both cases, a Doji signal is formed. In both, upward and downward trending cases this indicates a reversal is pending. Use the Doji to correctly forecast changes in foreign currency rates and count your profits.