Important facts you should know about forex candlesticks
Forex trader are a lot more sucessful in todays market because they are following the candlestick charts that are providing bar charts that are used effective. Forex candlesticks can give you the information that can excel your forex investment and can take you above your competitors in the field on investment in the forex market
Forex candlesticks should not really be used in isolation to make trading decisions but when combined with specific technical indicators they can be very effective at predicting turning points or breakouts. In fact candlesticks are an excellent way of providing a trader with additional confirmation of a price move and act as a way of enforcing what other technical indicators are already saying.
The most useful way of discussing candlesticks trading is first is to say its not as complex as you may have tought and that anyone can become a verygood analysis of trading patterns
When you plot a candlestick chart each individual candle basically represents what happened to the price of a currency during a particular time period. The body of the candle shows the opening and closing price and the two wicks show the high and low points during that period. A green candle indicates a bullish candle where the price rose and a red candle signifies a period where the closing price was lower than the opening price.
There's nothing revolutionary in this but the strong signals come when you start to see specific candlestick patterns. There are numerous different trading patterns to look out for, each of which has it's own specific meaning, but let me discuss a few of the more common candlestick patterns.
The long wick indicator is the hammer and its and indicator that is called a hanging man pattern. Both indicators look the same. both of them are good indicators that a reversal could be about to take place.
Another strong pattern is when you get a lot of consecutive small bars followed by one large bar. This is a good sign that a breakout is underway either upwards or downwards depending on the colour of the candle.
Combining patterns of candlestick as well as indicators can help you predicted prices and pinpoint movements that will be useful
Article Source: FxTradingStock.com
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Want to find out more about forexcandlesticks.then visit Eddie Holland's site on how to choose the best forexcandlesticksfor your needs.
by: Eddie Holland
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Date: Sun, 13 Feb 2011
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