Forex candlesticks are perhaps the single most valuable technical analysis tool that a trader can have in their toolbox. Candlestick charts have been a staple of the art and skill of technical analysis since the 18th century when Japanese rice traders invented them in an effort to spot repetitive patterns in price so as to predict future price movements. Similarly, the forex candlestick has been the backbone of technical analysis for forex currency traders since forex trading first became widely popular. Essentially, candlesticks display the overall thought process of all investors in the forex market for the given period of time the candlestick represents, thus they generate visual signals of investors' beliefs and it is these beliefs that are the engine that moves the forex market.
The greater appeal of forex candlestick charts over simple
bar or line charts lies in the fact that they present the same data but with a
dramatically dynamic visual interpretation. In essence, forex candle charts
make it much easier and clearer to see the change in trader and investor
sentiment, this makes candlestick charting the most efficient and profitable
form of chart reading. The forex candlestick chart shows the raw price action
that occurred as a result of market participants' reaction to economic
variables.
Forex candlestick patterns give traders a definable and
effective strategy to trade the market with. The primary reason for this is
because candlestick charting gives a clear and easy to utilize depiction of the
force of price action. The way that forex trading candlestick patterns do this
is by having a "body" that shows the distance between the open and
the close for the time period the bar represents. The body of a forex
candlestick is typically either black or white or two other opposing colors.
This easy to interpret visual effect gives you an instant view of who won the
daily forex battle; the bulls or the bears. When using simple bar or line
charts that do not contain this same contrast of price movement it is much more
difficult to interpret forex price action.
Investing in the Stock Market:
Over the past few years the stock market has made
substantial declines. Some short term investors have lost a good bit of money.
Many new stock market investors look at this and become very skeptical about
getting in now.
If you are considering investing in the stock market it is
very important that you understand how the markets work. All of the financial
and market data that the newcomer is bombarded with can leave them confused and
overwhelmed.
The stock market is an everyday term used to describe a
place where stock in companies is bought and sold. Companies issues stock to finance
new equipment, buy other companies, expand their business, introduce new
products and services, etc. The investors who buy this stock now own a share of
the company. If the company does well the price of their stock increases. If
the company does not do well the stock price decreases. If the price that you
sell your stock for is more than you paid for it, you have made money.
When you buy stocks
in a company you share in the profits and losses of the company until you sell
your stock or the company goes out of business. Studies have shown that long
term stock ownership has been one of the best investment strategies for most
people.
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