Online currency traders need to know how to interpret live Forex signals in order to avoid losses and make a profit. Forex traders make money when they successfully pick which Forex pair to trade. Then they must learn to use live Forex signals to determine issues such as the direction of the dollar in Forex. The basics of Forex trading are fundamental analysis of national economies, monetary policy, and world economic factors followed by close attention to factors that drive currencies up and down within the trading day. To make money currency trading start by learning how to use your trade station to make sense of price movement in the Forex markets. Using Japanese Candlesticks as an example let us look at some live Forex signals.
A set of trading signals that originated in ancient Japan helps traders today. Candlestick patterns in Forex trading give traders a heads up as to as to the next direction of price action in a trading pair. In this charting system for trading currencies a symbol overlies a standard price chart. The symbol tells the trader the opening and closing price for a trading day, the range within which the Forex pair traded for the day, and whether the pair close up or down for the day. This capsule of information is the Japanese candlestick. A candlestick in this case is a rectangle superimposed on a trading chart. Its top and bottom denote the opening and closing prices for the day. The rectangle or candle is black if the pair closed lower than it opened and white if it closed higher. The entire range of trading for the day is shown by thin lines that extend above and below the candle. These are the shadows. Thus a Japanese candlestick looks like an upright candle with wicks on both ends. One of more of these candlesticks makes up a Japanese candlestick signal. These live Forex signals can show price action for a month, a week, a day, an hour, or even minutes.
Candlestick Examples of Live Forex Signals
You are trading the USD versus the Euro. Thus the USD is the base currency and the EUR is the counter currency. The trading chart reflects the price of Euros in US dollars as do the Candlestick signals. The Euro has been falling in a steady downward trend. Then it plateaus for a day. This is shown as a Doji signal. This signal is a single candlestick, virtually flat, with shadows of various lengths extending above and below. It is indicative of market indecision. This signal is useless in a flat market but is high indicative of a reversal when it occurs in an established trend. It tells us that sellers have quit selling and that buyers have not yet stepped in. When live Forex signals such as this are confirmed by a subsequent day of reversal they are commonly indicative of a new, reversed trend. Traders use live Forex signals such as these to tap into market sentiment and trade accordingly.