Ignore candlesticks at your peril when developing your Forex strategy. Candlesticks contain a huge amount of information about the market. Learn to read candlesticks like a book and greatly enhance the profitability of your Forex strategy.

Used by Japanese traders for centuries, the Western world has only recently (since around 1991) become aware of their value due to the work of Steve Nison.

Candlestick charts are now the preferred medium for probably the majority of traders due to their visual impact. Like bar charts, candlestick charts are based on four main pieces of information relating to the timeframe of the chart (15 minute, 1 hour, 4 hour, daily, etc.) – the open and close prices for the timeframe, plus the high and low points during that period:

High Low Open Close

However, by representing this information graphically, in the shape of a candle, the trader is able to absorb a glut of information about a single trading period with just a glance.

So learn to read candles well – your Forex strategy will be more solid as a result.

What’s In A Candlestick?

What you can read from a single candlestick?

Certainly not enough to base a trade upon. However, a distinctive single candlestick in conjunction with other indicators can be very significant.

When reading candlesticks it helps to think of the battle constantly going on in the market place between the bulls and the bears. A candlestick will tell you how the battle went during any given period.

Take for example a candlestick on the hourly chart which has a long solid body and very small shadows if any. If the color of the candle is green, or whatever color your charting package uses when a candle closes higher than when it opened, it means either the bulls are in firm control or there was little or no interest from sellers.

If the candle is red, or whatever color your charting package uses when a candle closes lower than when it opened, it means either the bears are in firm control, or there is little or no interest from buyers.

If the solid body of the candle is small but there is a long upper shadow and a long lower shadow, it means during that 1 hour period, the bears took the trade to the lowest point, the bulls took the price to the highest point, but neither could maintain the position so the end of the period is close to where it was at the beginning.

Get a series of those candles and the market is obviously in an indecisive state, or reconciled to trading within a range for the foreseeable future, until a further stimulus comes along, such as a fundamental announcement, to cause price to break out of the channel.

Distinctive Candles You Should Know

Candles come in all shapes and sizes with very distinctive names such as spinning tops, doji, hammers, etc.

Learning to read candles in conjunction with understanding other technicals such as pivot points and support/resistance lines, Fibonacci retracements and trendlines can add real power to your Forex strategy.

Remember, when browsing your charts, every candle tells a story. It’s up to you to decipher and interpret the significance. The level of skill you develop in doing so will be a major factor in developing a profitable Forex strategy.

By: Michael A Jones

The Forex trading strategy enclosed is popular with many of the top traders in the world and it’s very easy to understand and do yet, almost new traders in Forex use it but that shouldn’t worry you to much 95% of them lose money! Let’s look at how this simple logical strategy can make you some great Forex Profits.

Lets first look at how all Forex trends start and if you look at a chart of any currency pair a bull trend will start by breaking up to a new chart high, as the trend matures and develops the bullish currency will keeping breaking highs and this can go on for weeks, months or even years. If you want to get in on these trends when the risk reward is at it’s best, you need to buy these breaks of resistance.

Before we look at how to spot a good breakout, lets look at why novice traders fail to use this method.

The problem most novice traders have is their mindset, they want to buy the exact turn in the currency and this means, their constantly buying into support and hoping it holds. A lot of traders call this prediction but as you can’t predict Forex price movement, it’s just hoping or guessing, these traders keep getting stopped out and their equity gets burned.

It’s not that these traders don’t see a breakout as bullish many do but their attitude is – the price has gone to far, I will wait for it to come back but on the best breakouts it never does and they miss the trend and a good profit.

If you want to win at Forex trading you need to look at breakouts and when they occur – just get on board, keep in mind the odds of success are at there highest when a breakout happens and always keep in mind, that a trend in motion is more likely to continue than reverse.

Good breakouts are levels which have had a few tests before the break,in pure technical terms the minimum number is 2 – but you need more to get the odds firmly on your side. The more times the level is tested, the better the breakout will be when it comes. I look for at least 4 tests and like to see the tests, have occurred in time periods of at least a few weeks apart. Another trick to confirm the breakout, is to use levels which line up on the longer term weekly chart as well as the daily.

When the break comes, protection is under the level which has just given way – if your wrong your out with a small loss, giving you good risk to reward.

There is nothing complicated about breakout trading, it’s easy to learn and furthermore, as markets will always trend, this method will always work. If you want to win with a timeless Forex trading strategy, trading breakouts can make you a great second income in around 30 minutes a day.

By: Kelly Price

Currency exchange rates in the international currency market are constantly changing. As a result, the real value of buy or sell a currency for the goods or services can significantly change and profitable contract may not be profitable or unprofitable. Currency trading, Forex trading signal, Forex trading strategy, and Forex alerts have made this industry the largest one if one is to consider its trading volume. To understand it better, let us take an example of an inter-bank trading.

Planned risk levels may be increased dramatically under extreme market conditions. Use the ideas and/or modify them to suit your trading style, but only at your own risk. Planning a trade in advance allows a trader to gather intelligence and formulate a strategy before they execute the tactics of getting in/out of a trade according to the plan. The benefits to learning how to plan your forex trading are immediate.

Margins can be as low as 0.05%, going up to 4%, depending on the broker Forex. For the ambitious individual, using leverage can generate massive profits. Margin accounts allow Forex traders to control large amounts of currency with a relatively small deposit. Establishing a margin account with a Forex broker enables you to borrow money from the broker to control currency lots which are usually worth $100,000.

Successfully engaging in currency trading is about managing risk. To decrease the odds of losing, the intelligent currencies trader does all the necessary research and training to become proficient in the FX market. Success with forex-strategies also depends on you putting in the effort to learn and follow your systems of choice. Complicating forex trading strategies by overanalyzing and trying to tweak them means breaking them, and this will jeopardize your success with forex trading.

Trade as me, walk along as me in my journey, you will know that forex trading is not a dream. Of course, it’s not a 100% sniper shot, forex trading is like running a business, take care of the down side, the upside will take care of itself. Trader can acquire and improve trading skills. Use a Forex Training Software as is an excellent tool for studying trading in a fast and convenient way, to gain and improve trading skills without risking real . Trader’s or broker’s purpose is to get the revenue by the foreign exchanges buy and sale. From the latest estimation, FOREX trading average daily constitution is about 4 trillion US dollar.

By: Mike Freije