Japanese Candlestick and Other Charting Techniques
The Forex market is ruled by the general supply and demand balance. If there are more sellers (in volume) at any one level, the market will move to the downside, or if the buying volume is bigger at a specific level, the prices for that respective currency pair will rise. It is as simple as that, and this general supply and demand balance influences the way any financial product is moving. To find out where these supply and demand levels are, or where price is hesitating, or whether the price is accumulating energy to continue the previous trend, technical charts are being used. These charts are not suitable for all trading strategies, as some are simply having no use in specific interpretations.
There are different types of charts used in technical analysis of the market. Some of the most common ones include line, bar, and candlestick charts. A popular chart type used by forex traders is the candlestick or Japanese candlestick as it not only shows direction of the price, but shows the range of price fluctuations within particular period of time which can extend from minutes to months. This eBook will teach you the basic concepts behind candlestick charting techniques and explain why understanding these basics is a must-know for every trader.