This forex trading tutorial discusses Introduction to Japanese Candlestick Charts, History Of Japanese Candlestick Charts, What Are Japanese Candles, How Are Japanese Candles Built, Basics Of Analyzing Japanese Candles, Candlestick’s Foot Basic, Candlestick Type, 2 Types Of Candlestick Patterns
Japanese Candlestick Charts can be called 8th wonder of this world. One can easily and quickly forecast the future of any forex currency pair movement or stock market or commodity market movement just by looking at the chart. Of course, other technical indicators like MACD, ADX, RSI, Stochastic, Doda Donchian will make your work more easily and accurately.
You must learn Japanese Candlestick Charts thoroughly if you really want to make money in this market.
Candlestick analysis appeared in the XVII century, long before the classical, Western technical analysis, which was developed by Charles Doe at the beginning of the XX century.
The very first futures exchange in the world was the rice market in Osaka, Japan and was called Dozhimy. It was here that the well-known Monehisa Homma traded, the trading principles of which were used as a basis for candle analysis by his followers. They are often called "Japanese candles" because the Japanese used them to analyze the prices of rice supplies.
Legends and proverbs made up the wealth of this man. There is evidence that Homma conducted 100 successful deals in a row. He could afford a "living phone" from people standing on the roofs of houses from Sakata (the homeland of Homma) to Osaka and passing on the chain fresh quotes from the rice exchange.
Japanese candles are a method of presenting price charts, along with lines and bars. But according to many traders, the candlestick chart best reflects the supply and demand for traded paper and, consequently, the price dynamics. It was noted that Japanese candles or their groups often point to turning points on the charts. Richard Smitten put forward in one book his assumption that the great speculator Jesse Livermore used in his trading strategies such rotary models. In this tutorial section, we will look at all the most important aspects of candlestick analysis, as well as popular candle patterns that will help you better understand Japanese candles.
The candle chart consists of a series of candles, each candle represents one period of time. Like bar charts, candlestick charts also display prices for a certain period of time: opening, maximum, minimum and closing. The difference is the use of colour in order to show whether prices have been rising or falling during the period.You can use Japanese candles on any timeframe: from minute to week. Everywhere the same information is displayed:
When the price is rising it is represented by a white candlestick (or Green) When the price falls, it is represented by black candlestick (or Red). In terms of concrete name, white candlestick is called "positive line", black candlestick is called "hidden line".
Candlesticks are drawn using 4 values ??(opening price, high price, low price, closing price), draw positive lines (white candles) if the closing price is higher than the opening price, and if the opening price is lower than the closing price, (Black candle) will be drawn. Also, if the opening and closing price are the same or nearly the same, draw a calling attention line (cross shape). There is "beard" at the top and bottom of the candle, indicating high and low, respectively. In other words, if you are forming positive lines, the stock price has risen, and conversely, if you are forming hidden lines it can be said that stock prices have declined. The calling line shows the turning point.
Broadly classified, there are 2 types of Candlestick patterns:
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