Trading Forex with Candlesticks

The fundamentals of Forex trading these days can be very unclear. On the other hand technical analysis remains an accurate tool for reading market sentiment. EU next summit promises no further resolution of the Euro Zone economic contraction . Will Greece pull it together and abide by its agreement with the EU in return for bailout money. Will Cyprus be next in line for assistance? Will the Yuan fall as trade with Europe diminishes? Traders may not know all of answers to the fundamentals. However, in trading Forex with Candlesticks, traders can often see where the market is going in a given currency pair. In trading Forex with Candlesticks the trader uses statistically accurate pictorial representations of price movement to predict future movement. Time honored symbols such as the Doji indicate market uncertainty and are a good predictor of a reversal of a up or down trend. The Three Black Crows indicate a reversal of an upward trend and a Kicker Signal is a strong indicator of a reversal, either up or down. The trader does not necessarily need to be an expert on Chinese exports, European Banking, or the Bernanke Doctrine in order to make money in trading Forex. Trading Forex with Candlesticks gives the trader insight into the market and these insights commonly lead to profits.

Japanese Candlesticks

Long ago in Japan when there were still Samurai there were rice traders. These individuals learned that certain price patterns in the rice market kept repeating themselves. The traders devised symbols for these price patterns and named them. They found out that by watching the symbols that their trading was more profitable. Over the years stock traders, traders in other commodities, and Forex traders learned that the symbols devised by rice traders in Japan could be profitably used to predict price movement in stocks, other commodities, and foreign exchange. The Forex trader makes his money by accurately predicting changes in Forex currency rates . It is wise for the trader to be knowledgeable about the fundamentals that drive currency pair rates. However, it is not the fundamentals that initially drive markets. It is the market’s anticipation of these fundamentals. Thus, trading Forex with Candlesticks gives the trader insight into what the market is thinking and what the market will do next. Trading Forex with Candlesticks leads to profits.

Why Candlesticks?

If Japanese Candlesticks are statistically based why not use any of the many Forex trading programs that are available? An advantage to trading Forex with Candlesticks is that the Candlestick signals are clear and easy to read. There is less chance of a trader missing a signal due to an overly complex system. In addition, Candlestick signals can be superimposed on stock charts of varying complexity and used as attention getters among the vast amounts of data that some programs throw at the trader. The point of trading Forex with Candlesticks is the most profitable trades are the best. By sticking with clear Candlestick signals a trader commonly avoids getting into questionable and usually unprofitable trades.