Tag: forex candlestick

Forex Candlesticks and Trend lines

Forex Candlesticks are very useful in finding when a trend has started and when the trend is ending and also when is the forex market reversing.

Most forex traders just stop at identifying if the candlestick is bullish and bearish and if the trend is continuing, where as candlesticks can be used not only to enter the trades, but also to accurately place the stop loss.

However, forex candlestick cannot be used in isolation. Let me be clear about this. If a candletick is bearish, this analysis alone cannot be used to decide if a trade should be placed or if it should be closed. To make such decisions, there is another indicator necessary such Trend lines.

If the candlestick hits a trend line, it is at this point a clear cut analysis and so forex trading decisions can be made. For example, if during an uptrend, the currency pair forms a doji on the resistance line, that is a clear cut indication that the market may reverse.

And then this analysis can be used to make calculated decisions if the trade should be closed or if a short position should be opened.

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Thats all in this short post on candlesticks.

Forex Candlestick Doji on EUR/USD is hitting forex market Sentiment

Doji Forex candlestick, like I mentioned is one of the most prominent candlesticks patterns out there in forex market. This was very visible when a doji was seen on the eur/usd daily chart few days ago. This made the traders stop the bull run that was going on very aggresively.

As soon as a doji was seen, quite a few traders closed their position the next day. This resulted in a good sized bearish candlestick the following day.

But, personally I feel that there is still enough strength remining in the market as the trend was very strong. so, even though forex doji was visible which was followed by a bearish red candle, I feel that the market will get good support at 38% or may be 50% retracement level and will rebound from there.

When you are using candlesticks, you must also see what are the other indicators pointing. Do they complement the candlestick or do they still represent good strength or continuation of the chart trend.

But, nevertheless, this certainly proves how strong a doji candlestick pattern is and how accurate are the forex candlesticks.

Forex Candlesticks – What does a candlestick Doji mean?

Forex Candlesticks really facinate me a lot. The more I learn about them, the more I feel like learning more. I mean so many patterns and each speak a lot about forex market conditions.

For example, let us talk about Candlestick doji which is a very popular and significant type of candlestick pattern.

Doji Candlestick pattern
Doji Candlestick pattern

 As you can see in the chart, Doji signifies a point where both Buyers and sellers match for each other. Its more like a tug of war where no side is winning currently.

Candlestick Doji in clear terms is a candle where the opening price is the same or almost the same as the closing price.

So naturally when a candlestick is formed, it shows that trader needs to be watchful of the trading consitions.

 

Doji candlestick also shows that the traders who have their forex trades open need to do some housekeeping work such as adjusting stop loss or may be even close the trade.

See, all this message can be derived from one single forex candlestick Doji pattern

Forex Candleticks Charts – Amazing technical indicator called forex candlesticks

Forex Candlesticks are amazing. They are one of those indicators that can help understand accurately what happenned or what is going to happen in the forex market.

Since the introduction of japanese candlesticks to western world by steve nison, the candlesticks have gained a lot of following in trading community.

In simple terms, a forex candlestick indicates the price movement during a particular period. So on a daily chart for example, one candle will indicate the price information of one day.Body and wicks of candle

Here is what a candle tells –

1. Opening Price in the duration

2. Closing price

3. Lowest price and

4. Highest price.

The difference between the open and close is the body of the candle. While the ends are known as wick.

The Threads in the adjascent figure are the wicks of the candle.
The green candlestick in a forex chart is a bullish candle which shows that price has increased during that particular time frame. A red forex candlestick shows that price has come down.
As you can see that candles are highly useful for technical analysis. Due to their versatile nature, candlestick charts are common in any form of technical analysis, let it be a forex market, stocktrading, options or even commodities.
Thats all in this post. Tune back again to learn some popular and accurate forex candlestick formations.