In our beginner’s guide, you’ll pick up the key points of the importance of these patterns, reading the different patterns, and how to get trading using candlesticks.
Understanding Forex Charts
To find trades that are
profitable, the effective and informed use of charts are critical to your technical analysis. Charts let traders know at which point a currency pair could be profitable to buy and sell at.
Candlestick chart patterns are notorious for doing just that.
However, as with any other
trading strategy, reading charts is far more complicated than just looking at numbers and bars from one line to another. Traders from any financial or investment market should ideally scrutinize a myriad of chart varieties to provide them with the edge they need. Relying on a single typical line graph could prove costly if there are other market factors where that chart failed to indicate to you.
When it comes to the popular candlestick pattern however, many traders do tend to rely solely on this credible pattern as it is considered as an extremely reliable trading indicator. While this type of chart looks far more complicated than a traditional line graph, they are relatively simple to learn with patience, diligence, and practice.
Candlestick Trading Benefits
The candlestick is one of the visually associated elements of forex trading, but it isn’t just because it is pretty.
Correctly using
candlestick patterns in your forex trading can prove to be highly beneficial for your performance as an FX trader.
On most other forex charts; there is just one point of data presented at a particular moment in time. When you are looking for an informed trading decision, that is not ideal.
When using a candlestick, you’re able take into consideration five factors:
- closing point or price
- direction of market movement
- high point or price
- low point or price
- opening point or price
