Forex trading is getting hot and there is no end to the online traders making their way over to forex trading in sight! Just as hot are the new methods of candlestick charting the forex market that until recently have remained a mystery, if not completely unknown to the forex trader. As a matter of fact, many seasoned forex traders say candlestick charting doesn't work while trading forex! Nothing could be farther from the truth. As a matter of fact, I believe that candlestick charting is the best method for the forex trader for a variety of reasons.
The forex markets are possibly the most volatile market one can trade in. On one hand, this is what appeals to the currency trader due to the frequent large quick moves. On the other hand, many traditional methods of technical analysis are left failing the new forex trader due to these same conditions. What the trader needs to concentrate on in any highly traded currency pair is the strength and psychology of the buyers and sellers. Candlestick charting fits this requirement perfectly. Analyzing a forex chart with candlesticks can quickly identify changes in both power and psychology between buyers and sellers and can immediately alert the forex trader of trading opportunities.
Many new traders in forex come from the world of stock trading and along with them come the indicators common in Western technical analysis. These indicators are quickly dispatched as useless in such a volatile market as currency trading. To make matters worse, those traders who bring their knowledge of candlestick charting as it pertains to the stock market are also quickly disappointed due to the difference in the technique as it applies to forex. Make no mistake; candlestick charting forex is different than any other market. Mostly because the forex market is open twenty-four hours a day and traditional candlestick patterns don't form as they do in a market that has a daily open and close. But that doesn't mean that candlesticks won't work with forex!
Candlesticks as they apply to forex are indeed different, especially in the daily chart. The patterns form differently but the meanings are the same. Candlestick reversal patterns are universal in their meaning and the payoff can be great! Especially in forex! Once the trader understands the psychological implications that candlestick patterns can convey, forex trading becomes much more simple.
| B.M. Davis is an active trader and the publisher of The Forex Candlestick System. If you would like more information about candlestick charting the forex market visit http://www.forexcandlestickcourse.com |
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