How To Trade Most Powerful Japanese Candlestick Patterns in Forex Trading

How To Trade Most Powerful Japanese Candlestick Patterns in Forex Trading
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What are candles?

Simply put, candles are a way to explain how prices are going up.

Candle charts are available on the Think Forex trading platform. The following is a sample chart illustration derived from the Think Force Web Trading Platform.

This chart shows the price on the right (vertical) axis and the time on the bottom (horizontal) axis. In addition, the chart is made up of bars with small lines at the top and bottom. These are known as candles. The candle carries up to four pieces of information.

1. Open Price 3. High Price

2. Nearby price 4. Low price

Candles refer to this information for a specific unit of time. For example, the chart above is a daily chart. Each chart represents one day. And as such, every candle forms an open, close, high and low price for that day. The horizontal axis at the bottom of the chart can be used to understand which day resembles a candle. The following is an image that describes how these four pieces of information are considered open, low, high, and in the context of a fixed period candle:

Wicks or shadows are thin lines that go out of the rectangular body of a candle.

They represent high and low prices during this period.

The color of the candle is also important in understanding whether the open price was higher or lower than the near value. If the candle is red, or as a fish in some other way, that means the open price is close to low. And the opposite is true if the candle is green, or is described as a fish.

Consider the candle above. The absolute highest point on a candle, which has a partial body at the top of the upper line, is more expensive. The absolute lowest point shows how far the price has fallen during the time in question. The top of the candle is the opening price, while the bottom of the candle is the closing price. Thus, from this candle, we see that the price rises and falls from its openings, but were eventually able to push it down from the open, while the bulls were already in the vicinity to raise the price slightly. Had come.

Why Do Candles Work?

Price action traders rely on candles because they give a lot of information about each trading period in a visual way that is easy to translate, giving traders a quick look at the price action chart with prices in different time periods. To compare the behavior of. Each candle can be "read" as a meaningful part of a developing story. They describe the "market sentiment": whether (and to what extent) the bear or the bulls had control, and the extent to which traders pushed the price in both directions. For example, a long body of candles with no wax indicates a significant change in this struggle.

Strength, while the tall upper candle ahead of her body indicates greater conflict, but with the attempt to raise the price of the bull, the bear was pushed back before the candle was approached. Some reproducible candle patterns have become popular among traders as a credible indicator of some future behavior. This guide is intended as an introduction to some of these patterns, which give helpful traders a sense of market conditions and identify profitable times to enter the business.

The ability to read candles allows a price action trader to become a meta-strategist, keeping in mind the behavior of other traders and large-scale market operators. In other words, candle patterns help traders.

What are candles?

Fluctuate their own trade and rely on the reversal of larger, more influential partners in the market, often referred to as "smart money", so that traders can identify and participate in key pricing tricks.

The chart below shows some of the countless patterns made by candles in the context of daily price increases. These patterns will be discussed in the rest of this guide

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