In this lesson, we will be looking at the basic Japanese candlestick patterns that were discussed in the previous lessons to make sound trading decisions. Remember, candlesticks are useless on their own, and you must always consider the market environment and what the price is telling you. But before we begin, just a few…
Did you click here first? If you did, stop reading right now and go through the entire Japanese Candlesticks Lesson first! If you’re REALLY done with those, here’s a quick one-page reference cheat sheet for single, dual, and triple Japanese candlestick formations. This cheat sheet will help you to easily identify what kind of candlestick…
What’s better than dual candlestick patterns? TRIPLE candlestick patterns! To identify triple Japanese candlestick patterns, you need to look for specific formations that consist of three candlesticks in total. These candlestick formations help traders determine how the price is likely to behave next. Some three candlestick patterns are reversal patterns, which signal the end of the current trend and…
What’s better than single candlestick patterns? DUAL candlestick patterns! To identify dual Japanese candlestick patterns, you need to look for specific formations that consist of TWO candlesticks in total. Engulfing Candles There are two types of Engulfing candles: Bullish Engulfing and Bearish Engulfing. The Bullish Engulfing pattern is a two candlestick reversal pattern that signals a strong up move may occur. …
Now that you’re familiar with basic candlestick patterns like spinning tops, marubozus, and dojis, let’s learn how to recognize single candlestick patterns. When these types of candlesticks appear on a chart, they can signal potential market reversals. Here are the four basic single Japanese candlestick patterns: Hammer and Hanging Man The Hammer and Hanging Man look exactly alike but have totally different meanings depending on…
What do spinning tops, marubozus, and dojis have in common? They’re all the basic types of Japanese candlesticks! Let’s take a look at each type of candlestick and what they mean in terms of price action. Spinning Tops Japanese candlesticks with a long upper shadow, long lower shadow, and small real bodies are called spinning tops….
Let’s break down the different parts of a Japanese candlestick. Sexy Bodies Just like humans, candlesticks have different body sizes. And when it comes to forex trading, there’s nothing naughtier than checking out the bodies of candlesticks! Long bodies indicate strong buying or selling. The longer the body is, the more intense the buying or selling pressure….
While we briefly covered Japanese candlestick charting analysis in the previous forex lesson, we’ll now dig in a little and discuss them more in detail. Let’s do a quick review first. Japanese Candlestick Trading Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice….
In the previous lessons, you learned about trading support and resistance. Let’s review what you’ve learned. When the price moves up and then pulls back, the highest point reached before it pulls back is now resistance. As the price continues up again, the lowest point reached before it climbs back up is now support. Support and Resistance are Zones…
Intermarket analysis studies the relationships between asset classes, typically currencies, bonds, commodities, and stocks. It can help traders generate broader trading ideas, reveal potential market turning points, or confirm other analysis methods. The price action of currencies is often driven by their relationship with commodities, bonds, and stock indices. For example, here are some traditional intermarket relationships:…