Forex Today

Japanese candlestick charts are one of the most widely used tools by Forex traders and investors. Some of the tenured Forex participants have expanded their use to include a technique which is based on reading 4 candlesticks.

First, after picking a winning pair, they map horizontal lines through the resistance level and at the bottom part of the chart, where support has formed. However, note that the lines are only traced across the first four candles that form in the day. In an attempt to trade online and make the biggest number of pips they exploit the true breakouts observed on either of the lines. They also check for what the Stochastics at the 4 hour time chart are showing. They do so in order to trade in the same direction of the Stochastics. They also trade against the 4 hour Stochastics that depict a lesser reading. With these methods they often capture between 50 and 100 pips.

Remember that an experienced trader never gets into the market without a stop loss. In this case they place it on the other side of the channel; this way if the stop is triggered, they can set the new order again. And lastly, these traders close their positions 5 hours prior to the end of the day.

Many of these traders who use candlestick charts follow patterns like the black crows. If you’re not familiar with these, they’re a common formation, not the birds from that famous Hitchcock movie.