Japanese Candlesticks- How To Use Them Forex Trading-00-2440

By Author: singaporetrader
Total Articles: 4393
Comment this article

Japanese Candlesticks How to Use them Forex Trading

I am certain we have all heard of the term Japanese candlesticks, but are you using them effectively?

History:

It is more than likely the oldest technical analysis tool available to Forex traders, Japanese candlesticks. Japanese Candlestick charts were developed in the 18th century by a man named Munehisa Homma. Munehisa Homma developed candlestick charts to analyze the price changes of rice contracts. He traded these contracts and was considered the best trader of his time. He became a very wealthy man for the sole use of these candlestick charts.

So what is a candlestick chart?

In simple terms the Candlestick charts is the Japanese Candlestick Charts, are simply a way to show price movement.
The charts are both very simple and powerful and when used effectively are one of the most profitable trading tools available. They are similar to line charts but much easier to read and interpret. They consist of a body, with or without a wick at each end. The body shows the opening price at one end, and the closing price at the other. ...
... The wicks show how much the price moved above or below the close. The color of the body shows whether it was an up time period, or a down period. They are brilliant and use to use you can tell by a simple look, whether the price closed higher or lower than the open. While this alone is enough to warrant using candlestick charts over line charts, this is only the tip of the iceberg in terms of the power of Japanese candlesticks.
The Chart patterns of Japanese Candlesticks
As the price of the Forex Market
moves up and down, it creates distinct patterns. These patterns can tell you exactly when to enter the market and exactly when to exit the market.
When the Japanese candlesticks are combined with technical indicators these patterns work together to become very accurate. There are hundreds of patterns, the more of these patterns that you know, the better your analysis will become. Now I have only touched on the very basics of the power of Japanese candlesticks. There are many excellent books that teach these patterns in detail, after using the patterns for a while it becomes second nature.
Forex Trading with Japanese candlestick charts
Japanese candlestick charts are especially well suited to using in Forex. In Forex trading it is just as easy to make a profit whether the price is going up or down. Candlestick charts predict upturns as well as downturns. Using Japanese Candlestick Charts will not make you successful all the time. You will have wins and losses. The candlestick charts will however give you the edge you need to succeed.
Japanese candlesticks are a fun and easy way to trade forex. The candlestick charts will also help you to become successful with any strategies you are currently using. They can be an excellent aid to you when developing your own trading system. No matter what your goals are or how experienced/inexperienced you are, candlestick charts will increase your profitable trades. They will also help you avoid losing trades. Japanese candlestick charts are the easiest and most successful way to begin trading Forex.
Ready to Trade: Forex Broker
The CFD FX REPORT is a real time trading tool that offers clients free trading reports, trading ideas and education lessons similar to this one.
They have also recently reviewed all the Forex Brokers so if you are looking for a great broker feel free to contact them.

About the Author:

The CFD FX REPORT
is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.