Forex Candlesticks

Summary: Forex Candlesticks is a $37 ebook to explain to you what Japanese Candlesticks are, how to read them and to trade them profitably. Yes the author writes well, the information is useful. He uses pictures well to make his lessons easy to follow. I guess I have bought too many ebooks to be impressed by a new one. There is the 60 days Clickbank money back guarantee, so you can't lose.

What are Japanese candlesticks? That's what Forex Candlesticks teaches.

Candlesticks are one type of view you can select in the charts of your trading platform (like MetaTrader4) to show you the market price movements over time. You can use them on all the time periods, from 1 minute, to many hours or even days and weeks.

So its a vertical bar showing the prices that happened during the time period you selected. More precisely, the solid bar or candlestick shows you the open and closing prices for the time period you selected.

Each bar is one time period, depending on which time period you select. Red means the prices fell, blue means they rose - however you can change these colors to be whatever you want. Most people stick with red for falling prices.

When you look more closely at them, you can see a thin line from the middle of the top and bottom of the main (real) body. These are called shadows or wicks, top and bottom shadows/wicks. The shadows tell you what prices the currency pair sold for during the period of time for the real (main) body.

What are bullish and bearish forex candlesticks?

A bullish candlestick represents market prices that are moving up, so it is blue. Bearish candlesticks are usually represented by the colour red because the market is dropping - not that we see it as a bad thing, because we can make money by both rising and falling markets.

Special Candlesticks

Occasionally, you'll come across candlesticks that have no shadows, or have no real body. These are very special candlesticks that can provide you with crucial information about here market price may be headed. The names of them are as follows:

• Long Day Candlestick: A candlestick that has a long day is one in which there has been a big difference in opening and closing price compared with typical trading days in the previous five to ten days.
• Short Day Candlestick: A candlestick that has a short day is one in which there has been a small difference in opening and closing price compared with typical trading days in the previous five to ten days.
• Marubozu Candlestick: A marubozu candlestick is one that exhibits no (or very little) upper or lower shadow. For a white candlestick this means that its open is equal to its low, and its close is equal to its high. For a black candlestick it means that its open is equal to its high, and its close is equal to its low.
• Spinning Top Candlestick: A spinning top is candlestick with a small real body and long upper and lower shadows.
• Doji Candlestick: Dojis are the most extreme case of spinning top candlesticks. It is when the real body exists as a line (when the day's open and close are the same).
• • A long legged doji has long upper and lower shadows.
  • A gravestone doji has a long upper shadow and no lower shadow.
  • A dragonfly doji has no upper shadow and a long lower shadow.
  • A four price doji has no upper or lower shadows (the open, high, low, and close are the same).
• Star: A star is a small real body that gaps above or below a long candlestick occurring the previous day.
• Umbrella: An umbrella is similar to a dragonfly doji: a small real body with no upper shadow and a long lower shadow.
• Inverted Umbrella: An inverted umbrella is similar to a gravestone doji: a small real body with a long upper shadow and no lower shadow.

Momentum - Shaved Candlesticks.

Forex Candlesticks uses pictures to demonstrate, but for this article, imagine a solid, real body candlestick of a reasonable size. Compare it with another candlestick where the real body is shorter - but both the shadows/wicks reach the same open and close levels of the first one.

The first candlestick shows you solid momentum, the second shows you some movement, but the momentum is limited to the solid real body. The candle with shadows shows you the market's hesitation and uncertainty. The solid real body candle shows you the market's momentum.

So what? Well momentum is very important to picking the direction of prices, and the markets commitment to its price changing. Shadows show you what part of the market feels, but not all of it.

That is, the solid real/main body of a candle with no wicks/shadows means that there is probably a lot more movement left in the currency trading pair. That the candle would have been even longer, but the end of its time period happened. So there is likely to be more movement in it yet.

Candlesticks with no wicks or shadows are called shaved candlesticks, and they are very useful indicators of momentum.

Are shaved candlesticks guaranteed to predict the future of prices? Short answer is no - they are an indicator only. I have learned what I know about candlesticks from the Forex Candlesticks ebook, and what I have discussed in this article is only an introduction to its content.

News announcements can be a big factor. Before a major news item, the market may bet on one effect, and then swing wildly back after the news is out in the market. So it is best to avoid relying on shaved candles during major news release periods.

When momentum is strong in the market, it's a good time to enter into a trade. When it weakens, it is a good time to exit the market.

The Doji is a good sign of weakening momentum. A Doji can represent either one of two things, either buyers and sellers are equally strong, or there is indecision in the market.

Many Forex books and websites claim that a Doji candlestick indicates a change in market direction. But this is not always true.

Forex Candlesticks Conclusion

 Maybe it is a personal thing, but I relate to candlesticks much more than any other way to read the markets. I am not recommending that you only use them as your market indicator. But they are very meaningful to give you a picture of what is going on. So they are essential to learn about. I do recommend you buy this Forex Candlesticks ebook. It is well written, and Chris will bring you up to speed on all things you need to know about them. It is $37 well spent, and you have the Clickbank 60 days guarantee to rely on if you don't agree.