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Thread: What is a candlestick and how to analyze market movements with a candlestick?

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    Rookie Azis Muslim's Avatar
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    What is a candlestick and how to analyze market movements with a candlestick?

    Hi guys: hi:

    First of all, I thank you for all the staffs at RoboForex forum for organizing this extraordinary contest. I am very fortunate to be one of the clients here and become a member of this forum by sharing all of my experience from my early career started in forex till now.

    As we know in general, for a beginner it is very difficult to do this business because they do not know many things about this business. Beginners usually have some questions for them and they're trying to get the answer. As traders who have struggled and fought for years, we here should help them to find some solutions of their problems. Of all the important things about forex, I will personally explain 2 questions for the beginners based on my own story.

    1. What is a candlestick and how to analyze market movements with a candlestick?
    Candlestick is one of three charts available in metatrader4 which has a shape like rod - candles. Candlestick also can be used as a technique to map and read the price movements of stocks, commodities and forex. This technique belongs to a group of technical analysis and it is the oldest technique created by Munehisa Homma (Japan, 1724-1803).

    It is far easier to read candlestick's pattern than reading the price through bar charts and line charts. We can adjust the color of the candles, for example red color for bearish candles and green one for bullish. I will describe 2 patterns, they are bearish and bullish.

    a) Bearish Patterns
    If we look at some of the patterns below, it is a sign the market will move to follow the trend of bearish or declining. The patterns consists of:
    Bearish III, Bearish Harami and Cross, Dark Cloud Cover, Bearish Engulfing Line, Evening Doji Star, Evening Star, Gravestone Doji, Bearish Separating Line, Evening Window Star, 3 Bullish Soldier, Inverted Hammer, Shooting Star, Long Upper Shadow, Tweezer Tops and Hanging Man.

    b) Bullish Patterns
    If we look at some of the patterns below, it was a sign the market will move to follow the trend bullish or ascending. The patterns consists of:
    Bullish III, Bullish Harami & Cross, Piercing Line, Bullish Engulfing Line, Morning Doji Star, Morning Star, Dragonfly Doji, Bullish Separating Line, Morning Window Star, On-Neck Line, 3 Bearish Soldier, Inverted Hammer, Long Lower Shadow, Tweezer Bottoms, and Hammer.



    In addition, I would add some patterns that provides excellent results when I was trading using this technique about 1 year ago. Check this out.




    2. How to determine a suitable time for trading and what is market hour?
    Each time has different value of movements, depending on how many market participants were active at that time and the extent of the ongoing economic activities. Some countries have peak hours each of which affects the movement of its currency. For traders who likes a busy time, a suitable time is when economic activity is underway which led to high price volatility. While traders are more relaxed, they will choose a time when all activities reduced economic activity which caused sideways in the market.

    I think you got the answer, right mate? Yes, everything depends on our trading styles. For example, if we are scalper, we will trade in rush hours when market moves in high volatility. Here's the picture about market hour.




    I think that's all from me. If there is any error in the explanation of what I wrote and explained above, I apologize to you. Everything I shared here based on my experience and am still in the learning process. Because for me, learning is an endless process in my life. Thank you for your attention mate. Hopefully this can help the beginners to know this forex business well.

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  2. #441
    Rookie Yayami's Avatar
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    Quote Originally Posted by Abhishekwala View Post
    Lower time frames are actually misleading and unless we are into scalping we should avoid it, and for scalping too we should also recheck it with H4. There are numerous candle shapes and patterns that we can know, but higher then that we should know how to effectively utilize them in appropriate market conditions. Experience is very important to make a meaningful interpretation of the candle chart ticks and shapes.
    not misleading because each timeframes has their own purposes and functions to analyze market which some of us may not know it yet. we tend to focus on high time frames because they're the most understandable and we rather not to use another lower time frames because we don't try to understand them. it's a misconception if you take candlestick and can't work it with low time frames.

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  3. #442
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    Quote Originally Posted by Yayami View Post
    not misleading because each timeframes has their own purposes and functions to analyze market which some of us may not know it yet. we tend to focus on high time frames because they're the most understandable and we rather not to use another lower time frames because we don't try to understand them. it's a misconception if you take candlestick and can't work it with low time frames.
    You mean the on minute, 5 minute time frames inclusive? I doubt they do have any good purpose aside from making traders to loss their money. Obviously we want to most of the times quite make money from the market. But we need to know some things about the market being that money from forex trading is meant to be consistent and the best means for consistent earning is long term trading method.

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    Rookie layigold's Avatar
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    This is a good thread on candlestick patterns and those who have not learned about candlestick patterns can even begin here after which they can flesh up their knowledge better through practice and those who already have the knowledge of candlestick patterns can still find this thread very helpful as a means of adding more to the knowledge already acquired on the subject matter . This is one of the quality threads that must be celebrated in this forum because both the experienced traders and the newbie can benefit maximally from it .

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  5. #444
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    Quote Originally Posted by layigold View Post
    This is a good thread on candlestick patterns and those who have not learned about candlestick patterns can even begin here after which they can flesh up their knowledge better through practice and those who already have the knowledge of candlestick patterns can still find this thread very helpful as a means of adding more to the knowledge already acquired on the subject matter . This is one of the quality threads that must be celebrated in this forum because both the experienced traders and the newbie can benefit maximally from it .
    The more traders are learning about the use of candle stick trading method in the market the more they can see the market movement. In a nutshell, all my trades are been taken from the candle stick point of view and it is simple. If only the new traders can always focus on the use of candle stick trading methods. Then, I think the rate of losses in the market will lessen.

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  6. #445
    Rookie Silhouette's Avatar
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    Quote Originally Posted by sniper007 View Post
    The more traders are learning about the use of candle stick trading method in the market the more they can see the market movement. In a nutshell, all my trades are been taken from the candle stick point of view and it is simple. If only the new traders can always focus on the use of candle stick trading methods. Then, I think the rate of losses in the market will lessen.
    So many candlestick patterns out there not only found in this thread but also from many threads or trading education's site on internet. Although we're using candlestick chart mostly to trade, those patterns not all functional and good to follow because there are few of them not giving us any clue about market. We can pick one pattern as an example like doji as it's a neutral pattern that actually shows no indication to market.

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    rules made to be followed, not to be broken

  7. #446
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    The candle stick patterns are mostly important tool for trading. We all need to have such trading method in the market so that way money can be made from the market. The candle stick pattern is profitable. However one shouldn't actually follow all the patterns in the market. Because in forex trading, forex traders should make trading more simple for themselves.

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  8. #447
    Rookie Sascha's Avatar
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    Quote Originally Posted by Brain View Post
    The candle stick patterns are mostly important tool for trading. We all need to have such trading method in the market so that way money can be made from the market. The candle stick pattern is profitable. However one shouldn't actually follow all the patterns in the market. Because in forex trading, forex traders should make trading more simple for themselves.
    traders who only use candlestick patterns to trade usually take them as their own indicator. it's not like usual indicator of moving average but simply to market logic in supply and demand rules based on candlestick patterns themselves. so we trade without using another kind indicators but focus only with our chart in candlestick. this is what simple really mean in trading by using only candlestick.

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  9. #448
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    Quote Originally Posted by Sascha View Post
    traders who only use candlestick patterns to trade usually take them as their own indicator. it's not like usual indicator of moving average but simply to market logic in supply and demand rules based on candlestick patterns themselves. so we trade without using another kind indicators but focus only with our chart in candlestick. this is what simple really mean in trading by using only candlestick.
    The chart patterns can be viewed as better indicators of the market trends, breakouts and opportunities than the conventional indicators. I too like the candle stick charts where the information is presented in so readable format where you can easily find the market sentiments and SOR levels. But it is not just about liking as lot of people use candlesticks but don't know how to use it that skillfully.

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  10. #449
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    The candle stick can really give to us good signals by which we can trade the market with I see it as a good source of making good consistent analysis in the market. There is no short cut though, meaning that you will have to learn and know how effectively to make use of the candle stick pattern before we can get to have good successful trades with it.

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    Trader cutiekc's Avatar
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    candle stick are one of the basics that I know so many traders should be able to learn and know. In the sense that if we know the basic of candles stick trading, it will be more easier for us to make good analysis. Candle stick are not simple, they are hard though but to increase our chances, we ought to ignore any thing linking with the smaller time frames.

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