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Why Should You Use the Japanese Candlestick Pattern?

May 11, 2018 by admin in Tips, Trading

 

Many people do not know that Japanese candlesticks are a very useful pattern in this industry to analyze the trends. When you are busy watching over your chart and looking at the trends all the time, you can save your time if you use this candlestick patterns. These candlesticks patterns are very popular and you can know the trend of the live market by only looking at them once. This article will tell you why you should give importance to the other patterns on this candlestick. Do not underestimate its ability as its name is a candlestick, it can glow brighter than the light when it comes to analyzing the market. Even the professional traders are also a big fan of this strategy. If you search for professional blogs and go through their readings, you will find every trader has used this pattern in their career. It is because it can change the tide of your career if you can use it right.

Price action trading is often considered to be a most conservative way of trading. It helps the traders to find the best trades at the key support and resistance level. Majority of the UK traders follows price action trading system due to its extreme level of reliability. Some of you might not understand the different formations of the Japanese candlestick but if you focus on the long-term market, things will be a little bit easier for you. Prior to the use of candlestick pattern in live trading, be sure you have proper knowledge of support and resistance level.

High-risk reward trades

All the price action traders are able to find high-risk reward trade setups. They never trade the market with the negative risk-reward ratio. Even if you get involved in forex trading industry, you can find at least 1:2 risk reward trade setups in the lower time frame. By following these simple rule of money management, you can easily make tons of money. Being a price action trader you should never trade them market against the market trend. And if you understand the candlestick pattern, you will know the when the trend is most likely to reverse.

They are visually pleasing and give much information

The first thing you can see about this pattern is they are very pleasant to a look at. They are not some messy dots of trends and lines that go over the chart. You can find what trend is going on, what was the opening price of the currency pair when a new trend started and what was the closing price if the market is going to bearish or bullish and much other information. This may be the only pattern that can give so much information in such a small candlestick pattern. Price is the most important part of this industry and this pattern can tell you the exact starting and ending point of the prices. It helps to plan the strategy and make a profit.

Do not jam-pack your chart

This is what many traders do in their chart when they start their analyses. They gather all the available indicators and patterns that have been used in this industry from old-time and put all of them on the chart. The result is the chart get jam-packed with patterns. If you use this Japanese candlestick, you may not get the Japanese warmth but you will certainly feel the chart has been cleaned like never before. It can make any chart appear new when this pattern is used.  It only takes a little place and you will get all the necessary information you need.

The trusted pattern over the years

His Japanese candlestick pattern is trusted by all the traders over the years. Many people do not know that it originated a long time ago in Japan and it only came to Forex trading years ago. It had been used by the Japanese for more than 100 years. This has gained the trust of traders and you can also use this pattern in your analyses.