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Why studying Japanese candlesticks in technical analysis is important?

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All experienced forex traders certainly understand that one of the most widely used chart types is Japanese candlesticks.
This is more often chosen by traders because of its ease of reading. Trading with Ticktrader at FXOpen UK, I most often use this type of candlestick in technical analysis.

The importance of studying Japanese candlesticks can be used as predictive power to recognize reversal patterns, continuation trends, or indecision market
  • Reversal candlestick patterns such as the Engulfing Pattern or Hammer often appear in chart patterns to signal a possible reversal which is useful in determining entry points.
  • Trend continuation candlestick patterns such as the Three Line Strike or Rising/Falling Three Method are patterns that may carry trend continuation signals
  • Indecision Market candlestick patterns such as Doji or Spinning Top are indecision point candlestick patterns
Candlestick patterns are usually divided into three types to recognize possible reversal patterns, namely single, double, and triple.

  • For single candlesticks such as Doji, Spinning Top, hammer, and Shooting Star, each of which reflects market behavior patterns.
  • For Double candlesticks such as Bullish/Bearish Engulfing, Harami, Piercing Line
  • For triple candlesticks such as Morning Star, Evening Star, Three White Soldiers, and Three Black Crows.
Traders can also learn the complete description of the Japanese Candlestick Cheat Sheet on the FXOpen blog.

#1 - February 19, 2024, 12:41:27 AM


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