If you are serious about trading on the Forex market, then you will spend the majority of your time pouring over a lot of data, most of it won’t make any sense. However over time you may start to notice different patterns. The candlestick as a way of measuring patterns was invented in Japan over 500 years ago, and the fact it is still in use today is a testament to its reliability. There are a number of different forex candlestick patterns that you can use and in this article I am going to highlight a few of them. It is worth looking into each of the different candle stick patterns if you are looking to take Forex trading seriously, after all, the more tools you have at your disposal, the better you will be able to read the market.
The Spinning Top is a pattern that you should be keeping your eye out for. This is formed by a relatively stable opening and closing price, however the highest and lowest prices for that particular time period extend far in either direction. If this ‘Spinning Top’ candlestick appears during a up trend then you will probably want to buy fairly soon, if it forms during a down trend then you will probably want to sell.
If the opening price for the market is equal to the low price and the close price is equal to the high price then it could indicate that the buyers have been control of the trading session. If it is the opposite then it will indicate sellers have controlled the session. This type of forex candlestick pattern is known as a white marubozu.
The final type of candlestick pattern is known as a ‘Doji’, this is when the opening and close price of the market remains the same. In this situation you will need to pay attention to the candlestick patterns that preceded it. If you notice a doji then you are in luck, this will provide a fantastic opportunity to buy or sell as long as you are able to spot what the previous patterns are, for example it could be an indication that buyers are weakening, therefore for example, if the sellers are weakening it is a perfect time to buy.
These are just the basic candlestick patterns and they should give you a sound start in spotting patterns in order to make your ideal forex trade, however, it is worth looking into the more complex forex candlestick patterns as you become more familiar with these, as these often provide the best indicator for whether you should buy or sell at the current price.
As you can see, there are many tools available which will make your Forex trading experience that much more profitable. It is worth having forex candlestick patterns as a tool in your box, after all, the more tools you have available, the better the job that you are going to do. This will of course lead to a lot more profit.