Candlestick Charting
26 April 2007If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Japanese candlestick charting is used commonrly in trading in stock markets, forex markets and commodity markets.
By analysis of candlestick charts it is often possible to predict points where new price trends are about to start. Trending prices are what you need to earn profits, provided you are able to predict the start and end of the trend with reasonable certainty. Candlestick charts help the traders in identifying those turing points as they occur, before a new price trend starts.
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The price of a currency against a reference or base currency has two values - buying price and selling price. Candlestick chart is drawn using one of these values - both buying and selling prices will not appear in same chart. Since the difference between selling and buying prices is normally uniform, the candlestick will form a similar pattern with any of these values.
The price movemnet chart can be plotted entirely by a series of candlesticks. The price charts have periods when price variation is in narrow range. Then there are periods when the prices trend sharply in up and down directions. These price trends present good opportunities for earning profits.
To take advantage of the trending prices and earn profit, the trader has to know two things. First, he should be able to identify the beginning of a price trend and take his position quickly. Second, he should recognize when the price trend is about to conclude or has just concluded. Then he can square up his trade.
Candlestick patterns can help the trader in recognizing major turing points. In next few videos we will see some important candlestick patterns and learn to recognize them.
Sanjay Johari
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