Forex, otherwise called foreign exchange trading is a great
venture that you can make profit of even at the comforts of your own home.
Foreign exchange trading is a risky business. Indeed, we all know that this
venture is not for everybody. You must be a risk taker and a firm
decision-maker to be a good trader.
However, in these times of advance technology and genius
software, you can actually automate your currency trading and make money from
it easily and conveniently. There are also tools that can help you in making
wise decisions in forex trading, thus it is important to be able to understand,
comprehend and analyze the tools and charts that will lead you to better
trading judgments. One of the things that you need to learn in currency trading
is the candlestick chart analysis.
Even with automation, you may also need to understand how to
read and analyze the charts yourself, as this is essential in making trading
decisions. To help you read and make candlestick chart analysis, which is one
of the main and popular tools in currency trading, here are a few things that
might help you succeed.
Candlestick charts are among the popular and easiest tools
that you can use in foreign exchange trading and a basic knowledge on how to
interpret it makes a lot of difference in making wise trading decisions.
Candlestick charts, like bar charts and graphs are visual representation of the
market situation, but more importantly, it is visually represents the price.
The rest may just be secondary. If you look at a candlestick chart, you will
notice the candle-like bar that represents the market movements.
Check out the candlestick you are using. If you are looking
at an hourly candle, that means every candle represents the movement of the
price in one hour. The highest price for the day is represented by the upper
wick of the candlestick and the lowest price for the day is at the bottom of
the 'candle' or the lower wick. The topmost and lowermost portion of the 'body
of the candle' represents the opening or closing price.
The color of the candles also represent the market
situation. If the candle is colored white or red, that means the price went
down, while black, blue or green colored candles mean the price went up. An
upward movement of the price is called the bullish market while the downward
price movement is termed the bearish. These representations in the candlestick
chart analysis creates a pattern that will help you predict future movements of
the currency market. Although this does not always follow that predictions with
candlestick charts do come true always but this is very helpful and powerful
tool that can help you make wise decisions in your trading.
The candlestick chart analysis also provide you with
important patterns that will help you decide whether to trade or not. Of
course, it is important to learn these tools in trading. Knowledge on the
market situation as well as price fluctuations are among the main factors that
you have to consider to be successful in trading. Of course, fundamental
analysis on the socio-economic as well as political situations of the country
is important as well.
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