Candlestick Analysis is the trading language used to understand trading Forex:
Cutting Through The Candlestick Hype-
The use of indicators will not increase the reliability of candles.
There are no advanced candlestick patterns, but there is a deeper understanding of price movements.
Why Use Candlesticks?
Provides a visual picture of what is occurring.
Gives visual insights into others’thoughts and expectations.
Gives visual confirmation signals of support and resistance.
Can visually align your thoughts with the market.
Can visually point to potential reversal points.
Candle Language Produces Thoughts-
Proper trading is said to be proper thinking, but how do we know what to think?
Pattern recognition is a recurring arrangement of price bars that suggests the future movement of prices, which guides our thoughts.
These patterns communicate how traders have acted and what their beliefs (expectations) are in that time frame, at the moment.
Candles provide a picture of those expectations on an ongoing basis.
Those pictures speak to us in “Candle Language”and are the basis for our continuous thoughts and trading decisions.
Miscellaneous Thoughts on Candlesticks: Attempting to define accuracy of candle names or patterns without considering the trend, support and resistance is useless.There are a least 50 different candle patterns, bullish and bearish. Some memorize them, but you will see this is completely unnecessary. While candles are very good at visually showing reversal signals, the signals that do Not work are often the most powerful! All that is needed is a chart of price bars --all else is secondary. While other analysis tools may add additional information, they can only follow existing price action.
Cutting Through The Candlestick Hype-
The use of indicators will not increase the reliability of candles.
There are no advanced candlestick patterns, but there is a deeper understanding of price movements.
Why Use Candlesticks?
Provides a visual picture of what is occurring.
Gives visual insights into others’thoughts and expectations.
Gives visual confirmation signals of support and resistance.
Can visually align your thoughts with the market.
Can visually point to potential reversal points.
Candle Language Produces Thoughts-
Proper trading is said to be proper thinking, but how do we know what to think?
Pattern recognition is a recurring arrangement of price bars that suggests the future movement of prices, which guides our thoughts.
These patterns communicate how traders have acted and what their beliefs (expectations) are in that time frame, at the moment.
Candles provide a picture of those expectations on an ongoing basis.
Those pictures speak to us in “Candle Language”and are the basis for our continuous thoughts and trading decisions.
Miscellaneous Thoughts on Candlesticks: Attempting to define accuracy of candle names or patterns without considering the trend, support and resistance is useless.There are a least 50 different candle patterns, bullish and bearish. Some memorize them, but you will see this is completely unnecessary. While candles are very good at visually showing reversal signals, the signals that do Not work are often the most powerful! All that is needed is a chart of price bars --all else is secondary. While other analysis tools may add additional information, they can only follow existing price action.