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.
