Aug 16 2010
When analyzing the Japanese candle stick charts we usually pay attention on the historical prices of the certain currency pair including the support and resistance levels. The historical data gives us more or less correct information about what we can expect from the market in the nearest future and trade accordingly.
If analyzing a candle stick chart you notice that there is a big trend so it must be a signal for any
Singapore trader where the market is going and what direction to trade. Before you enter the trend you should also consider using the moving averages or Fibonacci levels and place the stop-loss orders accordingly.
There is another method of trading on candle stick charts. It is using the theory of support and resistance levels. According to this theory, if the price did not break the resistance, then it would return to the level of support. The support and resistance levels are checked for a period of few days, depending on the time frame of your trading. It is also very good to add Fibonacci levels to this strategy.
And now let’s talk about Japanese candle stick analysis. This is an ancient method of construction of charts that appeared in Japan in the 17th century. A candlestick perfectly represents the battle between bulls and bears and displays a clear picture on which side is an advantage. In addition it indicates a moment when the fighters change their places.
Graphically a Japanese candlestick is consisted of body and shadows. The upper shadow on the daily graph shows the maximum that the price reached during the day, the lower shadow – minimum price. The body of a candle shows the price of opening and closing of a trading day. If a candle is white or green, so the closing price is above the opening one. If a candle is black or red, so it is on the contrary, the rate at the end of the day was lower than the beginning of the day.
While examining a candle stick graph, we examine the figures that a group of candles form. Usually we need three-five candles in order to form a figure. The most important figures in chart’s analysis are Falling Star and Dodges. These combinations will let you know if a current trend is reversing or continues.
In
Singapore Forex trading the Japanese candle stick analysis method is mostly used for a long term trade and for cross-rates like EUR/GBP. It works good for trading in corridors by defining the historical trends.
Forex trading in Singapore and Asia in general is mostly based on the Japanese candle stick trading and market’s analysis. Today this method is popular among the traders of the entire world as it shows precise information about the market and helps increase the number of profitable trades.
Apr 2 2010
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Candlestick Patterns with this 82 page PDF FREE Candlestick Guide. Suppose you want to sell the stock because you believe that the price is close to peaking. The appearance of a candlestick pattern showing the trend is still in place and is expected to continue my help you exit at a still more profitable price. Thrusting Lines Candlestick Pattern is one such trend confirming pattern.
There are as usual two types of thrusting lines candlestick patterns-bullish as well as bearish. Bullish thrusting lines candlestick pattern is a long bullish candle on the first day. The second day or what you call the signal day, it is a bearish candle with a gap opening price higher than the high of the setup day. However, the close of the signal day should be above the midpoint of the setup day.
What this means is that on the first day, bulls had been in charge of the market. On the second day, bulls push a security to have a gap opening. This brings in some sellers but the bears are unable to push the price above the middle of the previous day. This means is that bulls are still around and are poised to take control of the market again.
This type of a candlestick pattern is a great help if you are thinking of riding the trend, this is a signal that you can get on board as the trend is expected to continue and price will continue to go up.
The second important candlestick trend confirming pattern is the bullish separating lines pattern. This pattern is formed when on the setup day, you find a long bearish candle meaning that the bears have been in total control throughout the days.
The second day candle is a bullish one with the open equal or almost equal to the open of the previous day. This is the distinguishing feature of this pattern. The bullish separating lines confirm an uptrend. The setup day is bearish. The bears decide that the price is right to start selling.
However, on the signal day, the bulls come into play and start buying. There is so much bullishness in the market that the opening price of the signal day is equal to the opening price of the set up day. From that point on the bulls dominate the market and the uptrend continues.
Now both these candlestick patterns are rare and do not appear frequently. But when they appear during an uptrend, it means that the uptrend is going to continue. In the same way, bearish thrusting lines and bearish separating lines are formed in an opposite manner and confirm the continuation of the downtrend.
Apr 1 2010
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Candlestick Patterns with this 82 page FREE PDF Candlestick Guide. Candlestick charts is a visual representation of the battle between the bulls and the bears that takes place in the market. It takes time for this battle to take shape. Candlestick patterns on the very short timeframes used for scalping and some other day trading strategies may not give signals that can be properly interpreted and traded.
In the last decade electronic trading has become highly popular. What this means is that significant volume of the trading takes place outside of the regular market hours. This trading can cause patterns that don't reflect the full picture to appear on a candlestick chart.
For example, stock ABC trades on NYSE. NYSE officially opens at 9:30 AM EST for trading. Stock ABC open price is $60 per share. However, this stock had been trading on the electronic network in the pre-market hours as low as $59. Now the open on the NYSE may not be a true reflection of where the stock had been trading initially on that day.
What this means is that the open recorded on the candlestick chart is not accurate. Now, suppose the stock ABC never trades down to $59 during the day. So, the low on the candlestick chart may not be an accurate depiction of the day's price action.
So candlestick charts on very short time frame may not be able to produce accurate trading signals. Couple this with the fact that most of the trading now also takes place on the electronic networks makes them somewhat inaccurate sometimes. These are the two risks or what you may call limitations that you need to keep in your mind.
Apart from that candlestick chart is a powerful tool in the hands of an experienced trader. When an experienced trader combines these charts with technical indicators, this combination can produce highly accurate trading signals.
There are many candlestick patterns that can be used to produce buy and sell signals. Some of these candlestick patterns are simple while others are complex. Single stick candlestick patterns can be easily spotted while double stick and three stick candlestick patterns can take two to three days to develop. Mastering these candlestick patterns is what you need to do as a serious trader.
Now Yahoo Finance is an excellent free resource that you can use to create candlestick charts for any stock by just entering the stock ticker symbol. You should play around with the options available for Yahoo Finance. This will help you to learn a lot of new things about candlestick charts.
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Candlestick Patterns with this FREE 82 page FREE Candlestick Guide complete with strategy flash cards. Three stick candlestick patterns when added to your trading arsenal make your trading strategies more complicated and more interesting. These candlestick patterns are more of a challenge than the one stick or two stick candlestick patterns. This is due to the fact that there are several rules that each much follow in order to emerge as a valid signal.
Three stick candlestick patterns can be more frustrating to observe as compared to the one stick or two stick patterns. You may watch the first two days of your favorite pattern begin to emerge only to see it fizzle out on the third day.
However, if you are able to master these patterns; these can be valuable tools when trying to predict trend reversals or continuation of the present trend. These three stick candlestick patterns can be highly profitable if you are able to spot them. You can use these patterns to make highly effective and efficient trades.
These three stick candlestick patterns can be divided into two broad categories of Bullish and Bearish. Bullish three stick candlestick patterns offers you a heads up when the down trend is about to change.
With three days needed for these candlestick patterns to complete, you have time to watch as these candlestick patterns shape up! Now, you should be focused in when the third day rolls up after you have noticed some interesting developments during the preceding two days.
The most popular bullish three stick candlestick trend reversal patterns are the Three Inside Up Pattern, Three Outside Up Pattern, The Three White Soldier Pattern, The Morning Star and the Doji Star Patterns, The Bullish Abandoned Baby Pattern and The Bullish Squeeze Alert Pattern.
Popular three stick bullish trending patterns are The Bullish Side by Side White Lines Pattern, The Bullish Side by Side Black Lines Pattern, The Upside Tasuki Gap Pattern and The Upside Gap Filled Pattern!
Similarly most popular bearish three stick trend reversal candlestick patterns are The Three Inside Down Pattern, The Three Outside Down Pattern, The Three Black Crows Pattern, The Evening Star and the Bearish Doji Pattern!
Mastering these three stick candlestick patterns might not be easy and sometimes frustrating as these patterns might not appear quite frequently so you may not be able to use them more often in your trading. But if you spot them correctly these candlestick patterns can be highly effective and profitable buy or sell signals for you.
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Candlestick Patterns with this 82 page FREE PDF Candlestick Guide! The most bullish of the candlestick pattern is the long white candle. It represents that day when bulls have been in total control of the market throughout the trading day pushing prices higher from the opening to the closing.
As prices rise through the day, sellers do come in but not enough to stop the prices from continuing to rise. When sellers do show up during the trading day, buyers buy from them and the prices move higher.
With the long white candle closing near the high of the day, this is an indication that the bulls aren't done with their buying and will be back for more on the following day. What this means is that there wasn't enough of the securities in the market to keep the buyers from pushing the prices higher.
In case of a true white Marubozu, the opening price is equal to the low of the day and the closing price is equal to the high for the day. Now, this might occur occasionally. For our purposes, a white candle may have some wick on its both ends. What this means is that the opening price in case of a long white candle will be close to the low of the day and the closing price will be close to the high for the day.
To figure out that you are indeed looking at a long white candle, determine the area covered by the body of the candle that is between the open and close. This area should be at least 90% of the distance between the high and low. If so, you have a long white candle.
On a long white candle day, a lot of price action is covered by a very short amount of time. Price action doesn't move in one direction for that matter without retracing some part of it. This normal retracing of the price action gives you a chance to act on the signal provided by the bullish long white candle.
With long white candlesticks, the low price on the candlestick is a good support level. Support is the level where the buyers are expected to support the price of the stock or for that matter the security.
Now there are three variations to the long white candle. The long white Marubozu without any wick, this is the most bullish. The other is the closing white Marubozu. In this case, the close is equal to the high meaning there is no wick on the top. The other is the opening white Marubozu. In this case, the opening price is equal to the low meaning that there is no wick on the bottom.
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