Forex trading for beginners singapore

plus500

The Bullish Kicking Candlestick Chart Pattern. When Candlestick charts are interpreted correctly by a skilled technical analyst, they can clearly indicate potential market reversals to a forex trader. This can give the trader a higher likelihood of initiating high probability directional trades in the forex market. Candlestick chart patterns can be a single candlestick, or they can consist of multiple candles. The Bullish Kicking pattern is made up of two candlesticks and is a reversal pattern indicating future upside activity in the market with a high probability of success. As with most candlestick patterns, the Bullish Kicking pattern also has a corresponding Bearish Kicking Pattern that indicates a reversal to the downside. Bullish Kicking Pattern. The Bullish Kicking pattern is characterized by two Marubozu candlesticks. The first of these is a black Marubozu candlestick, which opens and then proceeds to decline before ultimately closing at the low of the day. The second is a White Marubozu candlestick, which opens by gapping higher than the previous day’s high and then continues to rally. This candlestick eventually closes at the high of the day. The Psychology of the Bullish Kicking Pattern. The overall prior trend does not matter much when trading a Bullish Kicking pattern. Basically, when the exchange rate for a currency pair gaps higher and then continues to rally to close at the high of the day, this indicates a strong bullish tendency. Volume figures are typically used on the white day to gauge the strength of the reversal and to confirm the move. Furthermore, the bullish Kicking Candlestick chart pattern is similar to the bullish Separating Lines pattern. The Bullish Kicking Pattern in a Trading Situation. A forex trader can take advantage of the Bullish Kicking pattern by simply going long the forex market when it appears. The Bullish Kicking pattern makes up one of the highest probability reversal patterns in Candlestick charting, and so will probably be one of any trader’s favorites. Furthermore, taking advantage of the Bullish Kicking pattern would ideally involve waiting to go long until the third day. Nevertheless, getting into the market sooner rather than later could be the most advantageous since the strength in these types of bullish reversals can be considerable. Finally, placing a stop at the bottom of the first candlestick for a Bullish Kicking candlestick chart pattern would complete the trading strategy and provide a necessary element of trading risk management. Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you. Trade Forex Trading. Learn Forex Trading. Japanes Forex Candlesticks Patterns Explained. Brief History. Candlesticks were developed in the 18th century by the legendary rice trader called Homma Munehisa to give an overview of opening, high, low and closing market price over a given period of time. They were used by the legendary rice trader to predict future market prices. After dominating the rice market, Munehisa eventually moved to the Tokyo exchanges where he gained a huge fortune using this analysis. He is said to have made over 100 consecutive winning trades. Types of Forex charts. There are 3 types of charts used in Forex Trading: Line, bar and candlesticks . Line - plots a continuous line connecting closing prices of a currency pair. Bars - displayed as sequence of OHCL bars. OHCL represents O PEN H IGH L OW & C LOSE. The Opening price is displayed as a horizontal dash on the left and closing price as a horizontal dash on the right. The main disadvantage of a bars is that it is not visually appealing, therefore most currency traders don't use them. Candlesticks - these use the same price data as bar charts (open, high, low, and close). However, they in a much more visually identifiable way which resembles a candle with wicks on both ends. How to Interpret. The rectangle part is called the body. The high and low are described as shadows and plotted as poking lines. The color is either blue or red. (Blue or Green Color) - Prices moved up (Red Color) - Prices moved down. Most trading platforms like the MetaTrader 4, use colors to mark the direction. colors used are blue or green; when price moves up, red; when price moves down. Candlesticks Vs. Bars. When candlesticks are used it is very easy to see if the price moved up or down as opposed to when a bars are used. The Japanese techniques also have very many formations that are used to trade the Foreign Exchange market. These patterns have different technical analysis interpretation and the most common are: The above patterns is what makes the Japanese candlesticks popular among technical traders and it is why this type of analysis are the most widely used when it comes to analyzing the currency exchange market. The analysis for these pattern formations in Forex trading is the same as that one used in stocks trading. Drawing These Charts on MetaTrader 4 Platform. To draw these on the MetaTrader 4, select the charts drawing tools within the " MetaTrader 4 Toolbar " - shown below. To view this toolbar on MetaTrader 4 go to "View" Next to file at the top left corner of the MetaTrader 4 Platform, Click " View ", Then Click " Toolbars ", Then check the " Charts " Button. The above toolbar will appear. Once the above toolbar, appears you can then select the type you want to convert to, If you want to view using the bar format, click the bar tool button as shown above, for line format click the line tool button , for Japanese candlesticks format click the "candlesticks tool button" . Forex Candlestick Patterns Guide. Candlesticks chart highlights. The Japanese candlestick chart is considered to be quite related to the bar chart as it also shows the four main price levels for a given time period. So, what makes them the favorite chart form among most Forex traders? The answer is that candles have a lot of qualities which make it easier to understand what price is up to, leading traders to quicker and more profitable trading decisions. Japanese candlestick charts are believed to be one of the oldest types of charts in the world. It was originally developed in Japan, several centuries ago, for the purpose of price prediction in one of the world's first futures markets. Below you will find a dissection of 12 major signals to learn how to use Japanese candlesticks . Live Candlestick Patterns. Sponsor broker. Trading Candlestick Patterns. Summary. HOW TO USE CANDLESTICKS? Learning candle patterns in groups is much like recognizing family members. If a large number of relatives were disbursed in a crowd of strangers it would be easy to miss them. However, if the relatives were all brought forward and arranged by family units it would become rather easy to spot them, even if they were dispersed back into the crowd again. Candlesticks, like relatives, can be grouped together and learned in family groups. They can be directly related or cousins. As in any family some of the cousins can be a bit odd, but in perspective they still fit and are much easier to remember if they can be placed into a family. Candlestick patterns have very strict definitions, but there are many variations to the named patterns, and the Japanese did not give names to patterns that were 'really close'. Experience and common sense allow traders to read the message even if it does not exactly match the picture or definition in the book. News, Analysis and Education Reports on Candlesticks. USDJPY Analysis: Support at 109.00/108.40, resistance at 109.75/110.20 [Video] Gold Analysis: Support at 1338/1332, resistance at 1344/1349 [Video] EURUSD Analysis: Support at 1.2385/1.2335, resistance at 1.2475/1.2535 [Video] DAX Xetra Analysis: Support at 13,220/13,159, resistance at 13,310/13,370 [Video] GBPUSD Analysis: Support at 1.4285/1.4345, resistance at 1.4155/1.4120 [Video] FOMC leans hawkish on inflation pick up, supporting the dollar. Fed Could Signal Changes to Outlook. Candlesticks Video. Candlestick Trading Strategies. All about Candlesticks: Analytical Tools. 1. A Way To Look At Prices. The line chart is the simplest form of depicting price changes over a period of time. The line is graphed by depicting a series of single points, usually closing prices of the time interval. This simple charting method makes easier the assessment of the direction of a trend, or the comparison of the prices of multiple instruments on the same graph. Candlesticks Video. Understanding The Creation Of Candles In Forex Trading. Before you can understand trading strategies and candlesticks, you must have a solid understanding of what is behind the creation of candlesticks. There are many conventional candlestick patterns in use today by traders around the globe. If they all worked and trading was that easy, everyone would be very profitable. The reality is that most traders lose money. One of the main reasons they lose is because they don't understand what candlesticks represent which is an ongoing supply and demand equation. During this session, we will spend time looking at candles not through the eye's of conventional candlestick patterns but instead through the eye's of supply, demand and orderflow. The Japanese candlestick chart is considered to be quite related to the bar chart as it also shows the four main price levels for a given time period. Candles have a lot of qualities which make it easier to understand what price is up to, leading traders to quicker and more profitable trading decisions. Japanese candlestick charts are believed to be one of the oldest types of charts , developed in Japan several centuries ago for the purpose of price prediction in one of the world's first futures markets. In the 18th century, Munehisa Homma become a legendary rice trader and gained a huge fortune using candlestick analysis. He discovered that although supply and demand influenced the price of rice, markets were also strongly influenced by the emotions of participating buyers and sellers. Homma realized that he could capitalize on the understanding of the market's emotional state. Even today, this aspect is something difficult to grasp for most aspiring traders. Homma's edge, so to say what helped him predict the future prices, was his understanding that there is a vast difference between the value of something and its price. The same difference between price and value is valid today with currencies, as it was with rice in Japan centuries ago. Compared to the line and bar charts, candlesticks show an easier to understand illustration of the ongoing imbalances of supply and demand. They also speak volumes about the psychological and emotional state of traders, which is an extremely important aspect we shall cover in this chapter. One advantage is that in Forex candlestick charts , candles are colored accordingly to the direction of price movement: when the open rate is higher than the closing rate the candlestick is colored with a “filled-in” body, and when the candlestick shows a “hollow” body, that means the closing rate exceeds the opening rate. The body of the candlestick, also called the “real” body, represents the range between the open and closing prices. In a quick view, you notice in which direction, if any, the price is heading. This is just one of the multiple conventions and the one we will use here, as each charting service may color the bullish and bearish candles differently. Below is an example of candlesticks and a definition for each candlestick component. The solid part is the body of the candlestick. The lines at the top and bottom are the upper and lower wicks, also called tails or shadows. The very peak of a candle's wick is the highest price for that time period, while the bottom of the wick is the lowest price for that particular time period. Another advantage of using a candlestick chart is that you may combine them with conventional market indicators such as moving averages and trendlines. But the most outstanding advantage these charts offer are the early warning signs when changes in trends occur. Ying Yang. 2. Common Candlestick Terminology. Some traders seem put off by the language that surrounds candlestick charts . But it's quite simple actually: the names of the patterns will often tell you what message is inherent to it. Originally, candlestick formations were labeled accordingly, in part, to the military environment of the Japanese feudal system during that time. Therefore you will find terms such as as “piercing”, “thrusting” and “advancing three soldiers” which definitely reflect a military cast. But candles were also given other more mystical names which may sound unusual at first but which are actually very descriptive like the “dragon fly” or “morning star”. Steve Nison, in one of his books about the topic, explains: The evening star (the nickname for the planet Venus), which comes out before darkness sets in, sounds like the bearish signal - and so it is! The morning star, then, is bullish since the morning start (the planet Mercury) appears just before sunrise. Source: “Japanese Candlestick Charting Techniques, A Contemporary Guide To The Ancient Investment Techniques Of The Far East” by Steve Nison, Prentice Hall Press, Second Edition, 2001. 2.1. Marubozu candlestick. Although this candle is not one of the most mentioned ones, it's a good starting point to differentiate long candles from short candles. A marubozu is a single candlestick pattern which has a very long body compared to other candles. Although this is considered a confirmation of the market's direction, it suggests to enter the move when the price has already moved a lot. The resulting risk associated with this signal makes the marubozu not so popular compared to other candlesticks. The smaller the real body of the candle is, the less importance is given to its color whether it is bullish or bearish . Notice how the marubozu is represented by a long body candlestick that doesn't contain any shadows. 2.2. Doji candlestick pattern. Despite the odds of a market turn increasing with a doji, it still lacks a confirmation to be traded upon. Doji's are formed when the session opens and closes at the same level. This pattern indicates there is a lot of indecision about what should be the value of a currency pair. Depending on the shape of the shadows, dojis can be divided into different formations: A long legged doji candlestick forms when the open and close prices are equal. The dragonfly doji shows a session with a high opening price , which then experiences a notable decline until a renewed demand brings the price back to finish the session at the same price at which it opened. At the top of a trend, it becomes a variation of the hanging man; and at the bottom of a trend, it becomes a kind of hammer. It is thus seen as a bullish signal rather than neutral. The gravestone doji's are the opposite of the dragonfly doji . Appropriately named, they are supposed to forecast losses for the base currency, because any gain is lost by the session's end, a sure sign of weakness. The Japanese analogy is that it represents those who have died in battle. Dragonfly and gravestone dojis are two general exceptions to the assertion that dojis by themselves are neutral. In most Candle books you will see the dojis with a gap down or up in relation to the previous session. In Forex, nonetheless, the dojis will look a bit different as shown in the picture below. 2.3. Spinning Top candlestick pattern. How can I deal with the fact that different charting platforms show different candlestick patterns because of their time zone? Forex market, we would suggest to use a GMT chart since most institutional volume is handled in London. This is specially valid if you work with daily charts but intraday charts superior to 1 hour will also show differences in the patterns. In any case, because of the 24 hour nature of the Forex market, the candlestick interpretation demands a certain flexibility and adaptation. You will see how some of the textbook patterns look slightly different in Forex than in other markets. The following patterns are thought to alert the trained eye of pending reversals offering the chance to the trader to get early on a possible new trend, or to alert the trader who is already in the money that the trend is ending and the position demand to be managed. 2.4. Engulfing Pattern. 2.5. Piercing Pattern. 2.6. Dark Cloud Cover pattern. Related Content. A Crash Course in Candlesticks. Irrespective of what you trade though, you really do need to know what you are doing from the very start, or you will likely end up losing more than you ever set out to in the first place. For some people education begins officially in a classroom, which is by far the best possible start you could have. The majority though, pick up some books and read some articles on the Internet much like this, before they take their education any further. 2.7. Harami pattern. Related Content. Are You Trading with Candle Power? There is an old phrase in trading: “Amateurs control the open and pros control the close.” Hey, it even rhymes! What I want to see is the CLOSE of a candle very near the highs, or a close very near the lows. I also prefer the candle itself to be larger than the previous candle. Notice the red candle marked “1”. Its high was higher than the previous green candle’s high, and the low was lower – hence a bigger candle. 2.8. Hammer candlestick pattern. There are few patterns where the shadows play a major role than the body. One of these are hammers , which is comprised of one single candle. It is called so because the Japanese will say the market is trying to hammer out a base. A hammer pictorially displays that the market opened near its high, sold off during the session, then rallied sharply to close well above the extreme low. Note it can close slightly above or below the open price, in both cases it would fulfill the criteria. Because of this strong demand at the bottom, it is considered a bottom reversal signal. A perfect hammer in Forex is the same as in any other market: its tail must be twice as large as the length of the body and the body has to be near or at the top of the candle. This means it can have a little upper shadow, but it has to be much smaller than the lower shadow. The smaller the body and the longer the tail, the more significant the interpretation of the hammer as a bullish signal. Another important criteria is the color of the body: the candlestick can be bullish or bearish , it doesn't matter. 2.9. Hanging Man candlestick pattern. 2.10 Morning Star candlestick pattern. 2.11. Evening Star candlestick pattern. 2.12. Shooting Star pattern. Preferred brokers in your location. Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.