Japanese Candlestick Patterns
The Japanese candlesticks are an easy-to-interpret type of chart used in technical analysis by stock traders,
forex brokers and traders, and traders of other financial instruments. There are various models and patterns with exotic names like
doji, harami or marubozu which when combined with a preceding trend and other candlesticks form patterns that can help you see
where the market might be headed to. The Japanese candlesticks are a good means for identifying areas of possible trend reversals.
Nonetheless, and here are a few words of warning for forex traders, many of the candlestick patterns presented here are
characterized with gaps and are mostly used by stock traders. As you know, in forex trading you don’t see as many gaps
as you can see in the stock market. That is because best forex broker trading is continuous except for the weekend and holidays, so,
basically, only Monday is the day that could open with a gap up or a gap down. Therefore, if you intend to use Japanese
candlestick patterns in your trading analysis, be more creative in interpreting them, and always make sure you get
confirmation from indicators like MA lines, MACD, RSI, etc. and/or support/resistance lines.
Here is what a Japanese candlestick looks like and what each of its parts is called:
Japanese Candlesticks
