The Nuts and Bolts of Japanese Candlesticks

Posted by Mark Deaton on January 13, 2009 under Currency Trading | Be the First to Comment

by Mark Deaton

Japanese Candlesticks have been around for centuries. In use since the early 1700's Japanese candlesticks were first used to trade the rice markets. Over the last 400 years of course they have become popular to many including stock and forex traders.

Japanese candlestick charts display market sentiment like other charts but most would agree you get a little more insight from a candlestick chart. Basically you measure 2 parts of a candlestick, the body, and the wicks. The body can be either full or hallow, and the wick or shadows, can be long or short, or not present at all. All tell a story.

Your highs and lows for the session are marked by the tops (high) and bottoms (low) of the wicks. Likewise a close that is greater than an open is represented by a hallow candlestick the bottom is the open, and the top is the close. A close that is less than the open is represented by a full or black candlestick. The top is the open and the bottom is the close. (See below.)

Candlestick patterns are not only more easy to read, they are also more intuitive once you get the hang of reading them. You see there are patterns with candlesticks you will soon learn to easily recognize, combine this with the intuitiveness and you have yourself a method for assessing price far superior to any other.

All candlesticks have a body and a wick or shadow, unless the open close high and low are equal to each other in which case you would have a little dash and that's it. A white body is an empty body, and a black one is a full body. The empty/white body represents a close greater than the open, and a black/full body represents a close less than the open. The size of the body represents the distance between the open and close.

When you have a body with no shadows its called a Marubozu. I can be black or white in which case its a "black Marubozu or a white Marobozu". In each case the open and close are equal to the high and the low. With the black the open is equal to the high and the close is equal to the low. The white would be the open is equal to the low and the close is equal to the high.

A spinning top is a candlestick with a short body and a long or short wick/shadow. The short body tells us that price opened and closed rather close to one another, while a long shadow/wick tells us that during the session price made its way in that direction but failed to hold its ground. This failure to "hold ground" could be a clue for price direction in the next session.

About the Author:

Candlestick patterns are very telling. Once you start using them you will look at any other chart and wonder how you did it without a candlestick chart. Candlestick charts are easier on the eyes, current market conditions popout at you instantly, and the overall process of reviewing charts becomes 10 times easier. To download our masters course and flash-cards visit us at http://www.candlestickgenius.com

Here’s How People Make Money With Forex

Posted by Sam Lockwood on January 7, 2009 under Currency Trading | Be the First to Comment

by Sam Lockwood

Forex trading has become one of the fastest growing areas of finance. It's something that people will have as a hobby or a job as it offers a great way to make some money. If you have the right mindset, it can be a highly profitable market to invest in.

The Forex market relies on the fluctuations of currency in regards to their purchasing power. This means that there are a great number and variety of factors has an effect on the fluctuations. Things like the rates of bonds, the political bills even the action of buying and selling currency can affect its value.

For example, if you are looking at the Euro to dollar exchange and the Euro is worth $1.27 and you sell it for $1.29 you have made about 2 cents on the transaction, this adds up to about 1% of the overall transaction.

This may not seem like much but if you do this with every transaction, you can easily make 3-5% of the total transactions for the span of a week. Again, this may not seem like much but as you increase the number of trades, the amounts of the investment and the dividend it can compound to make a substantial income stream.

Successful traders play the fluctuations in the market and know which currencies to buy and sell at a given time.

What Does a Forex Trader Use To Determine a Good Trade?

When you look at the currency market, there are a number of different factors, which tie in directly to the value of a currency. Many of these factors deal with supply and demand. For example, the US dollar is tied to the interest rates and the bond rates set out by the Federal Reserve and the treasury. In Canada, it is primarily timber and oil when the demand or value of these things changes the purchasing power of the currency changes as well.

There are unlimited resources to help provide you with the information that you need to make investments on the Forex market. The more you research the better your chances are of maximizaing your gains and avoiding any significant losses.

Traders usually restrict themselves to a few pairs of currency and pay special attenton to them. They try to become specialists in these currencies in order to increase their profit potential.

Many traders subscribe to research services that can help to provide you with information on the various aspects of the market. However, doing this can also leave you reliant on the judgment of other people.

Most people who trade on the Forex market are going to make use of things called robots. These robots are programs, which are designed to pull market information for the trader and signal that trader when opportunities present themselves as potentially profitable.

For those looking to get into forex trading, especially if they are new to the market, should take the time to consider this type of program.

Just as with any other application there are a number of options to choose from so there are a few things to keep an eye out for when picking the program that is going to work best for you.

The first step is to make sure that there is a demo program or option available to allow you the chance to check out the program out prior to placing an actual cash investment. Usually this should run a week or two weeks in order to get a good view of how the program operates.

The second thing to look for is a money back guarantee. It is important to ensure that the program works and is easy to use. Companies that know their product works will have no problem giving a guarantee.

The best way to choose is to purchase, test and return if it does not work for you.

About the Author:

If you want to know how to trade forex, you can find lots of information online. Click Here for a free trial of one of the top forex trading programs which make people money right away in the forex market.