Posts Tagged ‘japanese candlesticks’

In the Tokugawa era, a man named Munehisa Homma, a rice merchant from Sakata, was said to had first incited the idea of Japanese Candlestick which is now used for futures market analysis. It was then used to predict the price of rice in the Ojima Rice market in Osaka.

Later on a man named Steve Nison, a technical analyst, made a study on it which also pave to its graphical representation.

The Japanese Candlestick chart is made up of individual candlesticks that connotes certain actions that the trend may take. Each candlestick is molded up by 4 attributes namely; Open price, Close price, Low price, and lastly High price. A candlestick is made up of a real body and shadow.

The candlesticks comes in different sizes of the body and the shadows that accompanies it. Each type indicates unique behaviors of the market.

Long Body – long body but with a short shadow

Short Body – short body with a short shadow

Marubozu – candlestick without a shadow. It gives a good confirmation signal of an upward or downward trend

Doji – a candlestick that almost have no body. It is a result of the equal opening and closing price.

Long legged doji – a subtype of doji that have a long shadow of the same length. It shows the strength of the bull and bear are equal and a new trend will soon emerge.

Dragonfly doji – another subtype of doji with a long lower shadow that denotes that there is an impending down falling trend.

Grave stone doji – looks like an inverted dragonfly doji that makes an opposite remark – an evident uptrend may soon occur.

Spinning top – a type of doji that posses a long shadow that signifies that uncertainty encompasses the market. The longer the shadow is, the higher the possibility of a new trend formation.

Hammer or Hanging man – also another type of doji whose name depends on the trend that it belongs. It has a medium size body accompanied by a long lower shadow.

Inverted Hammer or Shooting star – the opposite of hammer and hanging man.

There are certain patterns that may be observed when 2 or 3 candlesticks are merged.

Stephen Stevenson

07.09.2010 Post in Trading

Daily Forex market popularity gathers pace. Today almost all trading markets of the world depend on Forex currency market. Every day hundred thousands of traders come into the market. Despite that a great many of trading speculators join the market you have a chance to become more successful trader. In order to earn profit permanently a trader must remember that a great role in the trading belongs to charts.

Exactly due to charts usage in the work on Forex the trader will not miss the whole point focusing on the most important aspects.

Charts usage will allow you to evaluate the importance and significance of all capital investments in any currencies or shares; this is the functioning essence of Forex charts. If you desire to have a success on the market then you have to learn comprehending Forex graphs. Applying to Forex charts you will be able to determine the current market trends and dynamics of the rate fluctuations.

Forex charts have become available recently that was caused by a violent development of computer technologies. They have become the main element of the market behavior analysis in distinct from the news line and fundamental outlooks mostly used previously.

In a simple trading terminal the charts of Forex operations are presented by 4 types: candlesticks, bars, lines and noughts-and-crosses. To this day the most popularity was captured by the Japanese candlesticks because of their usability as the charts of the Japanese candlesticks make it easy to lay on them the indicators and other marks.

Each trader must use in his trading the Forex work chart, as operating without it is a risk of funds loss. The currency fluctuations occur every minute or even second, that is why Forex charts suit well for online trading. Even by means of very insignificant movements a trader can make huge gains using Forex charts.

The major success component on Forex market is operational flexibility which is supplied for you by a chart. The key is to follow its work closely and in this case you will reach your goals.

At the chart you will be always able to monitor even the slightest fluctuations of currency rates that comes as a recipe for success and beneficial trading on the international currency market Forex.

Added by Alexandr Demkin,
InstaForex Clients’ relationship manager