Have you ever wondered how you can use candlesticks to trade the Forex markets? Japanese candlesticks are a really useful technical analysis tool that has been used commonly for trading stocks and commodity futures.
Professional traders have also used candlesticks to trade the Forex market, but their application on the Forex charts can be a little different. For example, since the currency market is a 24 hour market, there will be fewer gaps up and down between candlesticks (except during weekends), so you will need to change your approach.
1. What Are Japanese Candlesticks?
There are 2 types of candlesticks. The one that is bearish is usually red or colored, whereas the bullish one is green or transparent. A bearish candle is one that has closed below its open price, while a bullish candle has closed above its opening price. Usually there will also be shadows, otherwise known as “wicks”, that appear above and below the candlestick body. This is the price range that the currency pair has traded within the time period.
2. My Experience with Using Forex Candlesticks Made Easy
Inside this eBook I have learned all the major chart patterns that can predict price swings and continuations very reliably. Some of these patterns include the shooting star, Marubozu, engulfing patterns that can predict price movements reliably.
Of course, you will need to be more creative when looking for engulfing patterns, since it is harder to find this pattern when the next candle always opens at the same price as the previous candle’s close.
3. Are Japanese Candlesticks Really Useful for Forex Trading?
Most definitely! With this trading tool, I can now more easily analyze the market conditions and predict with a high degree of accuracy the future market trend.