Japanese Candles Patterns Technical Analysis Tutorial - Forex Trading Japanese Candles
Forex Trading Using Candles - Trade Forex with Candle Patterns
Brief History
Candlesticks were created in the 18th century by the legendary rice trader called Homma Munehisa to give the overview of the opening, high, low & closing market price over a given period of time.
They were used by the legendary rice trader to predict future market prices. After dominating the rice market, Munehisa then eventually moved to the Tokyo exchanges where he then gained a huge fortune using this analysis. It is said that He made over hundred consecutive winning trades.
Types of Forex Trading charts
There are Three types of charts which are used in Forex: Line, bar & candlesticks.
Line - plots a continuous line connecting closing prices of a currency pair.
Bars- displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW and CLOSE. The Opening price is displayed as a horizontal dash on the left & closing price as a horizontal dash on the right.
The main disadvantage of a bars is that it is not visually appealing, therefore most traders don't use them.
Candlesticks Patterns - Japanese Trading Candle Charting Techniques - these use the same price data as bar charts (open, high, low, and close). However, they are displayed in a much more visually identifiable way which looks like a candlestick with wicks on both its ends.
How to Analyze Japanese Candlestick Charting Techniques
Rectangle section is called the body.
The high and low are described as shadows & plotted as poking lines.
The color is either blue or red
- (Blue or Green Color) - Prices moved up
- (Red Color) - Prices moved down
Most trading platforms like the MT4, use colors to mark the direction. Colors used are blue or green: when price moves upward, red: when price moves downward.
Candles Vs. Bar Chart
When candles are used it's very easy to see if the price moved up or down as opposed to when a bars are used.
The Japanese Candlestick Charting Techniques also have very many formations that are used to trade the FX market. Japanese Candlestick Charting Techniques - candlesticks patterns have different technical analysis explanation and the most common Japanese Candlestick Charting Techniques are:
| Reversal Patterns |
The above Japanese Candlestick Charting Techniques and Patterns is what makes the Japanese candlesticks popular among forex technical traders & it is why this type of analysis are the most widely used when it comes to analyzing the FX market. The analysis for these Japanese candlesticks pattern formations in Forex trading is the same as that one used in stocks trading - Japanese Candle Charting Techniques.
Drawing japanese Candlesticks Charts in MT4
To draw these on the MT4, select the MetaTrader 4 charts drawing tools within the "MT4 Toolbar" - shown below.
To view this toolbar in MetaTrader 4 go to "View" Next to file at the top left corner of the MT4 Platform, Click "View", Then Click "Toolbars", Then check the "Charts" Button Key. The above tool bar will appear.
Once the above toolbar, appears you can then choose the type you want to convert to, If you want to view using the bar format, click the bar tool button as displayed above, for line format click the line tool button key, for Japanese candles format click the "candlesticks tool button".
Forex Trading Japanese Candlesticks. Japanese Candles Trading Candles Patterns - Forex Trading Using Candlesticks. Forex Trading with Candle Stick - Trade Forex with Candle Pattern
