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How to Read Japanese Candlestick Charts?

You probably think that financial analysis is complicated, but it actually comes down to two simple things, reading charts and reading news. There are many types of charts, but Japanese candlestick or simply candlestick are the most popular ones. Such a chart consists of red and green candlesticks, or candles lined one after another. Each candle gives you detailed information about the price movement within […]

Candlestick Charting Explained

Candlestick charting is based on a technique developed in the 18th century in Japan to track the price of rice. Candlesticks are a suitable technique for trading any liquid financial assets such as stocks and futures. Candlesticks are a way of representing the price action over a specified period of time. They provide information such as the market sentiment or possible reversals in the markets, by showing the price movement in a specific way. A candlestick chart displays the high or low opening and closing […]

Three White Soldiers and Three Black Crows Candlestick Patterns

Three white soldiers and three black crows are trend reversal patterns. The three white soldiers pattern emerge during downtrend and the three black crows pattern emerge during an uptrend. Three white soldiers as shown on the chart is a bullish reversal pattern that is made up of a trio of long green candles during a downtrend, each appearing after the other, opening within the range of the previous period and closing near the current […]

Inverted Hammer and Shooting Star Candlestick Patterns

In technical analysis, the inverted hammer candlestick pattern is the reverse of the hammer pattern. The pattern is comprised of one candle. It is easily identified by the small body with a shadow at least two times greater than the body. The color of the small body is not important, but the green body has more bullish indications than a red one. An inverted hammer pattern forms when the buyers push the stock price higher […]

The Hammer and the Hanging Man Candlestick Patterns

Hammer is a type of bullish reversal candlestick pattern made up of just one candle. The candle looks like a hammer as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick. In order for a candle to be a valid hammer most traders say that the lower wick must be two times greater than the size of the body portion of the candle, and the body of the candle must be […]

Doji Candlestick Patterns Explained

The Doji is a commonly found pattern in a candlestick chart of financially traded assets in technical analysis. It is a transitional candlestick formation indicating equality and indecision between buyers and sellers on the market. If the doji forms in an uptrend or downtrend, this is normally seen as significant as it is a signal that the buyers are losing conviction when formed in an uptrend, and a signal that sellers are losing conviction if seen in a downtrend. We […]

What Is a Japanese Candlestick in Forex Trading?

Candlestick charts are the most common chart types used by retail traders and investors. There are other types of charts such as line charts, bar charts, etc., but they don't tell the story of past price action like candlesticks do. When trading is based on technical analysis, the decision for future price action are made based on how the price has reacted in the past. I find candlesticks to be very […]

Important Candlestick Types — Part 2 — Forex Trading

This is part 2 of the series. In this video we will look at the engulfing bar and the doji. The Engulfing Bar This is a candle whose real body engulfs or swallows up and reverses the real body of the candle just before it. This means that a bullish engulfing bar may only form after a bearish bar. That is a candle that closes lower than it opens. Bearish engulfing bar […]

Candlestick Types — Forex Training for Beginners

In previous lessons we talked about Moving Averages and some other technical indicators that can be used as building blocks for simple trading strategies. What do these indicators have in common? They are derived from calculations based upon historical prices. In this lesson, we are going to talk about price itself. The Japanse candlesticks that you see in your trading screen can act more […]

Abandoned Baby Candlestick Pattern — Explained

In this video, we will be looking at the candlestick pattern known as the abandoned baby. This is a reversal pattern characterized by a gap followed by a doji which is then followed by another gap in the opposite direction. The shadow of the doji must completely gap below the shadow of the first and the third day. Typically, you have a downtrend forming and the shape of this particular candlestick has no major consequence. The first thing you are going […]

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