Have you ever wondered how you can trade candlesticks in the Forex market? Japanese candlesticks are indeed a useful technical analysis tool often used to trade stocks and commodities.
Professional traders have also used candlesticks to trade the Forex market, but their application on Forex charts may be a little different. For example, since the currency market is a 24-hour market, there will be fewer gaps between candlesticks (except during the weekend), so you’ll need to change your approach.
1. What are Japanese candlesticks?
There are 2 types of candle holders. The bear’s is usually red or colored, while the bull’s is green or transparent. A bear candle is one that has closed below its open price, while a bull candle has closed above its initial price. There will usually be shadows, otherwise known as “wicks,” that appear above and below the body of the candlestick. This is the price range that a currency pair has traded over a period of time.
2. Simply my experience with using Forex candlesticks
Within this e-book, I learned all the major chart patterns that can very reliably predict price changes and continuation. Some of these patterns include the shooting star Maruboza, which incorporates patterns that can reliably predict price movements.
Of course, you’ll need to be more creative looking for gripping patterns, because it’s harder to find that pattern when the next candle always opens at the same price as closing the previous candle.
3. Are Japanese candlesticks really useful for Forex trading?
Definitely! With this trading tool, I can now more easily analyze market conditions and predict the future market trend with a high degree of accuracy.