Technical Forex traders follow charts to keep track of foreign currency prices. Commonly the best currencies to trade in Forex are the most volatile. Japanese candlestick Forex charts provide traders with two kinds of information. One can see at a glance if one currency pair is more volatile than other. And one can use the live Forex signals superimposed on Japanese candlestick Forex charts to anticipate profitable trends and reversals. Thus Japanese candlestick Forex charts help traders pick the most profitable to pair to trade and they help traders profit in day to day trading. After all, the point of charting is to be able to identify market movements and trends and anticipate the next move of the market. Japanese candlesticks Forex charts are an ideal way to see the future and profit thereby. But first just what are candlesticks?
Japanese Candlestick Signals
In Japan when there were still Samurai in charge traders traded rice. These traders kept track of day to day market prices and did this for years. At one point or another some traders realized that price patterns for rice repeated themselves. It was possible to trade rice and make money without really watching the supply and demand factors that eventually set the price. They recorded the opening and closing price of the day and the range of price for the day. Then they did this for every day. The opening and closing price of the day was represented by a rectangle. It was clear or colored white if the day ended higher than it opened and black if it closed down. The rectangle had lines extending above and below to represent the range of trading for the day. The length of the lines and the rectangle were proportionate to the price movement of the day. These signals looked like candles with wicks on each end. The rectangle was called the candle and the lines were called shadows. These symbols were superimposed on a line graph that also displayed end of day market pricing.
Yesterday Rice, Today Japanese Candlestick Forex Charts
What rice traders in ancient Japan learned is that often times the market tells us by its pricing patterns just what it will do next. In essence the signals on Japanese candlestick Forex charts, or commodity charts, or stock charts are the first half of a pattern and ensuing price action is the second part. Because history repeats itself one can learn to read the signals in Japanese candlestick Forex charts and predict whether price action will go up or down. It makes no difference if one is trading rice, stocks, or Forex provided that the market is large enough and has enough daily volume to make statistical analysis practical. Because of the huge size of the Forex market, it is an ideal place to use Japanese candlestick Forex charts. When learning the basics of Forex, traders are wise to learn a clear and easy to use technical analysis system such as Japanese candlestick Forex charts.