Forex Candlesticks

 

Do you know how to read candlesticks? There are a lot of people who use Forex support and resistance trading, and the more you know about how to read candlesticks, the better off you’ll be. Forex support and resistance levels are very good to watch, but do you know how to predict them? Having different candlesticks can show you some awesome patterns that are very good to know. If you’re not watching them, then the support and resistance levels just look like zig zags. Knowing what to do with them is a very good idea. While they don’t always mean things, they usually do, and knowing what to expect is a good way to know how to make money.

 

A candlestick’s body shows you the gap between the opening price and the closing price. Its color shows you whether the opening price was higher or lower than the closing price. The candlestick’s shadow shows you the highest prices and purchase amounts offered. The relationships of the bodies to the shadows tells you a lot of information about the market. For example, a candlestick with long shadows and a small real body is called a spinning top, and it means that there is indecision between the sellers and buyers. If they occur during uptrends, this means there aren’t a lot of buyers. If they form during down trends, this means that there are not a lot of sellers. This can mean that the market will reverse.

 

Doji are candlesticks with shadows and almost no body whatsoever. Marubozus mean that the market is going very bullish or bearish, and are candlesticks that have no shadows at all. If you have a white or green marubozu or many white or green sticks followed by a doji, it means that the buyers are tired of buying. If a doji forms after a bunch of black marubozu or sticks, it means that there are too many sellers and more sellers are needed.

 

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