Have you ever wondered how you can use candles to trade in the Forex market? Japanese candlesticks are a really useful technical analysis tool that is commonly used for futures trading of stocks and commodities.
Professional traders have also used candlesticks to trade in the Forex market, but their application to the Forex chart may be a little different. For example, since the currency market is a 24-hour market, there will be less intervals between candles (excluding weekends), so you need to change your approach.
1. What is a Japanese candle?
There are 2 types of candles. The one that is bearish is usually red or colored, where the bullish is green or transparent. A bearish candle is one that closes below its opening price, while a bullish candle closes above its opening price. There will usually be shadows, otherwise known as “wicks”, which will appear above and below the candlestick body. This is the range of prices that the currency has traded in pairs.
2. My experience with using Forex Candlestick has been made easier
Inside this ebook I learned all the major chart patterns that can very reliably predict price changes and continuity. Some of these patterns include shooting star, maruboju, engulfing pattern which can reliably predict price movements.
Of course, you need to be more creative when looking for an engulfing pattern, since the next candle always opens at the same price as the previous candle closing, this pattern is hard to find.
3. Are Japanese Candles Really Useful for Forex Trading?
Most definitely! With the help of this trading tool, I can now more easily analyze the market conditions and make predictions about future market trends with a high degree of accuracy.