Sunday, November 12, 2017

Japanese Candles for Beginners

This article explains Japanese Candles for Beginners. We'll discuss their history, their types, and also a little bit into the analysis of Japanese candles.


What are Japanese candles?


Japanese candles are a universal type of charting, which displays not only the course of the price trend but also interval (one candle is a certain time interval (timeframe) during which the price moved). In other words, the Japanese candles show how the price moves on the time scale, but also the course of the price within a certain specific time interval (minute, 5, 15, 30 minutes, 1, 4 hours, 1 day, 1 week, 1 month, and sometimes even a year ). Most often, Japanese candles are used in the technical analysis of the market.



[caption id="attachment_1467" align="aligncenter" width="336"]Japanese Candles Japanese Candles[/caption]

Where did this type of graphics come from, and why are Japanese candles called exactly?


It's very simple, we'll find the answer on the pages of history. Japanese candles originated in Japan (surprisingly, true?) Thanks to the Japanese rice market, which operated since the XVII century. The Japanese, long before the classical version of Charles Dow's technical analysis, used candlestick charts to analyze the rice market. In the classical form, the analysis of Japanese candles, which we see now, formed already by the 1850s. A very great contribution to the analysis of Japanese candles was made by the famous Steve Neeson. It was he who opened the Japanese candles to the western world of trading, actively popularizing the analysis of Japanese candles for trading on stock exchanges. 


Now let's look at the appearance of the Japanese candle.


The Japanese candle consists of a "body" and "shadows" (less often a "tail", a "wick"), and displays the price of opening and closing, as well as the price of the maximum and minimum for a specific period (timeframe).



[caption id="attachment_1468" align="aligncenter" width="235"]Classic Bearish Japanese Candle Classic Bearish Japanese Candle[/caption]

In the picture, we see a classic look of a bearish Japanese candle


1. The price of the maximum (usually denoted by the Latin letter "H", from English Height / High). It is at the highest point of the candle shadow. Displays the maximum price movement for a specific period.


2. The price of the opening (Latin the O", from the English Open - to open). A mark that fixes the price at the beginning of the period of candle opening. It is the beginning of the body of the candle.


3. Closing price (Latin "C", from English Close - close). A mark that fixes the price for the end of the candle closing period. It is the end of the body of the candle.


4. The price of the minimum (Latin "L", from the English Low - bottom). It is at the lowest point of the candle shadow. Displays the minimum price movement for a specific period.


For a bullish candle, the "H" and "L" marks remain unchanged, and "O" and "C" change, respectively, in places ("O" at the bottom, "C" at the top).


During the movement of the market (that is, during the formation of the candle), a Japanese candle can change its status from a bearish to a bull several times, especially with strong market fluctuations.


If the price closes ("C") is higher than the opening price ("O"), then this candle is called bullish, that is, growing. On the graphs, it is displayed either hollow, or white, or, traditionally, with cold colors (green, blue, and so on).


If the closing price ("C") is lower than the opening price ("O"), then the candle is called a bearish, therefore, a falling candle. The graphs are always displayed in black, or, traditionally, in "hot" colors (red, orange, yellow).


Most traders prefer charts with Japanese candles, as they are easy to read and easy to read. Looking at the Japanese candles you can see a more complete and clear picture of the movement of the price chart.


As you can see from the examples, Japanese candles come in different sizes. What is the reason for this? Let's figure it out.


The longer the candle, the stronger the price increase in this period. If the body of the candle is long - this means that there is a strong pressure of sellers or buyers. If the body of the candle is short, this indicates a strong consolidation of prices and small growth.


So, the bullish Japanese candles (we are shown in green) signal about the greater pressure of the buyers of the asset. The longer such a candle, the stronger the price rises. But although such candles assume growth, one always needs to monitor their position on the chart. If, for example, after a long price drop, a long bullish candle appears, it can signal a potential trend reversal (especially if the candle has appeared at the support level). Too much pressure from buyers can trigger an intense bullish trend.


Bearish Japanese candles (we have - orange) signal a greater pressure of sellers. The principle of their action is the opposite of bullish candles. After a long growth, a long bearish candle may mean that in a short time, the trend may unfold, and indicate the level of resistance. After a prolonged drop in prices, a long bearish candle may indicate an even greater failure, and even panic in the market.


It is not uncommon to see such a type of Japanese candles on the chart as the " Marubozu brothers ". These are candles and bearish and bullish, which do not have "shadows", but only the body. These are very powerful candles that signal that in this segment only sellers or buyers dominated, respectively.



[caption id="attachment_1469" align="aligncenter" width="230"]Japanese candles "Brothers Marubozu" Japanese candles "Brothers Marubozu"[/caption]

Shadows of candles


"What would your good do, if there was no evil, and what would the earth look like if shadows disappeared from it," Voland said in the immortal novel of Bulgakov.


Almost at all candles, you can notice the lines above and below the body of a Japanese candle. These shadows can give very valuable information to someone who follows the market. The shadows of the candle are the range in which the price between the opening and closing of the candle went. In other words, the shadows of the Japanese candlestick reflect the struggle of buyers and sellers, and the closing price reflects what they came together in a particular period of time.



[caption id="attachment_1470" align="aligncenter" width="536"]Shadows of candles Shadows of candles[/caption]

If you watch a candle that has a long upper shadow and a short lower one, it means that buyers tried to dominate during this period, offering a higher price for the asset. But, the sellers seized the initiative, and "knocked" the price down to what you see at the close.


If you see a short upper shadow and a long upper one, this illustrates the opposite situation. Here initially the sellers dominated but surrendered under the onslaught of buyers. It is these situations on the market that draw long shadows.


If the chart shows you a candle with long shadows and a small body, then you know: such candles are called "Volchok". They symbolize indecision in the market. The big shadows indicate that both buyers and sellers have fought for a long time, but that's why they did not come to anything. Such a Wolf after a long growth or a long bull candle means that buyers are weakened, and will soon surrender. The top after a long fall, can mean a weakening of sellers, and soon a trend reversal.


We'll discuss different types of Japanese Candles like Hammer, Doji, Morning & Evening star and many more in the coming days.

Tuesday, November 7, 2017

EURUSD Daily Technical Chart » 07-Nov-2017

Below is the technical chart of EURUSD. Previously, I'd discussed technical charts with Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles technical indicators, but this time, for a change, I've not used any technical indicators.


I've just used Japanese Candlestick Chart. Time Frame taken is Daily.


 



[caption id="attachment_1464" align="aligncenter" width="700"]EURUSDDaily-chart EURUSDDaily-chart[/caption]

 


As seen clearly on the chart above, a Bullish Hammer has been formed on yesterday's chart. That means EURUSD will rise from these levels in a day or two. 


Now, watch EURUSD technical chart on H4 time frame and wait for Buy signal by Doda Donchian, MACD and Doda Bollinger Bands. When they confirm buy signal, take a long position in EURUSD.


Note: There is a complete tutorial on MACD on ForexTradingKit.com. Go through that and download MACD indicator for MetaTrader 4. You'll love that indicator.


 


 

Monday, October 30, 2017

NZDJPY Technical chart | 30-Oct-2017

Below is the technical chart of NZDJPY explained with different technical indicators.


NZDJPY Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.



[caption id="attachment_1458" align="aligncenter" width="574"]NZDJPY Technical Chart NZDJPY Technical Chart[/caption]

Just like NZDUSD forex currency pair movement, NZDJPY also has started another leg of downtrend from 77.843


All our famous and tested technical indicators, including Doda Donchian has already given Sell signal and the price is trading below Ichimoku Kumo and Doda Bollinger bands. 


Major Support Levels for NZDJPY


77.947


77.828


77.675


Major Resistance Levels for NZDJPY


78.230


78.325


78.479

NZDUSD Technical chart | 30-Oct-2017

Below is the technical chart of NZDUSD explained with different technical indicators.


NZDUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.



[caption id="attachment_1455" align="aligncenter" width="590"]NZDUSD Technical Chart NZDUSD Technical Chart[/caption]

NZDUSD started its downtrend on 19-Oct-2017 from 0.70960 and rests around 0.68197. In the last trading session, it tried to move little bit upward but bearish signals pulled it down.


As a result, another leg of downtrend has been started in this forex currency pair chart and one has the opportunity to take Short sell @0.68487. Doda Donchian has already given Sell signal and the price is trading below ichimoku Kumo and Doda Bollinger bands. 


Major Support Levels for NZDUSD


0.68333


0.68197


0.67976


Major Resistance Levels for NZDUSD


0.68775


0.68911


0.69132

Wednesday, October 25, 2017

AUDJPY Technical Chart Explained | 25-Oct-2017

Below is the technical chart of AUDJPY explained with different technical indicators.


AUDJPY Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.



[caption id="attachment_1445" align="aligncenter" width="524"]AUDJPY Technical Chart AUDJPY Technical Chart[/caption]

Doda Donchian gave sell signal @88.527 but it moved sideways after that as the currency pair was trading above Doda Bollinger bands. Once it closes below Doda Bollinger bands, it became further weak but then it was trading inside kumo of Ichimoku indicator. Kumo is always NO trade zone.


But now, things have changed. AUDGPY managed to cross kumo also. Future kumo is also bearish.


MACD, Aroon and Doda Stochastic indicators also confirmed that.


So, one can take short sell call here. Currently, it is trading @87.866 with a stop loss of 88.10


Major Support Levels are:


88.420


88.348


88.231


Major Resistance Levels are:


88.654


88.726


88.843


 


 

GBPUSD Technical Chart Explained | 25-Oct-2017

Below is the GBPUSD Technical Chart currency pair of 25-Oct-2017 explained with different technical indicators.


GBPUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


 



[caption id="attachment_1438" align="aligncenter" width="628"]GBPUSD Technical Chart GBPUSD Technical Chart[/caption]

 


GBPUSD tried to cross 1.32718 but faced tough resistance there from Ichimoku Kumo cloud and Doda Bollinger Bands. So, it moved downward and Doda Donchian gave Sell signal @1.31326. Doda Bollinger bands also confirmed that.


However, after giving a sell signal, the candle pattern shows "Bullish Hammer". So, all the mixed signals will make this currency pair to move sideways for some time. The overall environment is bearish for GBPUSD. So, it will fall further then.


One can take short sell call on GBPUSD now with a stop-loss of 1.31697.


Major Support levels are:


1.31139


1.30869


1.30432


Major Resistance levels are:


1.32012


1.32282


1.32718

Monday, October 23, 2017

Welcome to ForexTradingKit.com

We've designed a brand new website ForexTradingKit.com - dedicated to Forex traders and investors. 


ForexTradingKit.com


The website shows different tutorials on technical indicators, forex trading strategies, forex platform software etc. Forum for discussion will be started soon. Daily chart analysis of major currency pair will be there.


So, just visit ForexTradingKit.com and subscribe to it.


The following articles have been posted so far:


How to use Doda Donchian indicator in Forex Trading?


Guide to MetaTrader 4 Platform for Forex Trading


How to Install Metatrader 4 on Mac OS?


How to Install Metatrader 4 on Linux?


How to Install Metatrader 4 on Mobile Phone?


How to use MACD indicator effectively? (with pictures)


How to Use Stochastic Oscillator for Forex Trading?


 

EURUSD Technical Chart 23-Oct-2017

Below is the EURUSD Technical Chart currency pair of 23-Oct-2017 explained with different technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.



[caption id="attachment_1427" align="aligncenter" width="619"]EURUSD Technical Chart EURUSD Technical Chart[/caption]

EURUSD has formed a very interesting pattern on the technical chart. Different technical indicators have already given Sell signal on this currency pair. 


Doda-Donchian has given sell signal @1.17836


The curreny pair is already trading below kumo cloud of Ichimoku; thus chances of moving downwards are very strong. Kumo level of 1.17768 has become strong resistance now.


MACD indicator has also given sell signal.


The only waiting indicator in the list is Doda Bollinger bands. It's still giving support to EURUSD @1.17400, which interestingly coincides with Fibonacci retracement support level.


Thus, 1.17400 has become very strong level for today's trading. It should cross it and CLOSE below this level to initiate short sell on EURUSD.


Major Support Levels:


1.17626


1.17400


1.17035


Major Resistance Levels:


1.18356


1.18582


1.18947


 


 


 


 

Thursday, October 19, 2017

GBPJPY Technical Chart | 19-Oct-2017

Let us discuss GBPJPY technical chart for today. 


GBPJPY Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


 



[caption id="attachment_1420" align="aligncenter" width="479"]GBPJPY Technical Chart GBPJPY Technical Chart[/caption]

Although Doda Donchian indicator gave Buy signal @148.582 but long call was not initiated. There were several reasons for that.


Firstly, the currency pair was trading inside Kumo cloud of Ichimoku indicator, which is NO trade zone. It's always risky to take any call inside kumo. So, it's better to avoid such signals.


Secondly, the signal was not confirmed by Doda-Bollinger Bands. You can read how to filter out false signals of Doda-Donchian with Doda-Bollinger Bands.


So, the wait was only wise decision.


Now, the currency pair has crossed ABOVE Kumo cloud, which was its strong resistance. Doda-Bollinger bands have also given buy signal.


So, one can easily take long call @149.282 with the target of 149.921. One interesting thing to note here is Future Kumo is also bullish, which is a positive sign.


Major Support Levels:


148.206


147.913


147.439


Major Resistance Levels:


149.154


149.447


149.921


 

Wednesday, October 18, 2017

EURUSD Technical Chart 18-Oct-2017

Below is the EURUSD Technical Chart currency pair of 18-Oct-2017 explained with technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


EURUSD Technical Chart


EURUSD currency pair started its downtrend from 1.18338. It was expected as Future Kumo was flat from the bottom at that time. Flat kumo always attracts the price. That is one of the golden rule of Ichimoku indicator.


Now, after touching its support level 1 @1.17420, EURUSD is currently trading near kumo. To get upside, it has to cross Kumo level 1.17768 - 1.8299, which has become its strong resistance now.


So, if it breaks its support level of 1.17420, one can initiate fresh short position.


Major Support Levels are:


1.17420


1.17269


1.17025


Major Resistance Levels are:


1.17908


1.18059


1.18303


 

Monday, October 16, 2017

EURUSD Technical Chart 16-Oct-2017

Below is the EURUSD Technical Chart currency pair of 16-Oct-2017 explained with technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.



[caption id="attachment_1408" align="aligncenter" width="450"]EURUSD Technical Chart EURUSD Technical Chart[/caption]

After facing resistance @1.18747 and then @1.18586, EURUSD is taking support @1.18011. This support level is also the support level of Doda Bollinger Bands.


So, shall we take any long call at this level?


NO


Let us find out the technical reasons for this.


Doda Donchian indicator already gave sell signal @1.18338. But since the price is trading above Ichimoku cloud Kumo and Doda Bollinger bands, one can confidently say that this is a false signal. So, just stay away from this currency pair for the time being.


Major Support Levels are:


1.18066


1.17905


1.17645


Major Resistance Levels are:


1.18586


1.18747


1.19007

Friday, October 13, 2017

EURUSD Technical Chart 13-Oct-2017

Below is the EURUSD Technical Chart currency pair of 13-Oct-2017 explained with technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


In the last article, I suggested to ignore trading EURUSD as at that time, it was trading inside kumo, which is a NO trade zone.


But things have changed now.


EURUSD Technical Chart


Now, EURUSD currency pair is trading ABOVE kumo cloud of Ichimoku indicator and also above Doda-Donchian and Doda-Bollinger Bands.


So, one can take long call in EURUSD currency pair.


So, buy EURUSD@1.18432 with a stop loss of 1.18366


Support Levels are:


1.18244


1.18120


1.17918


Resistance Levels are:


1.18647


1.18771


1.18972


 


 


 

Wednesday, October 11, 2017

EURUSD Technical Chart 11-Oct-2017

Below is the EURUSD Technical Chart currency pair explained with technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


EURUSD Technical Chart


As clearly visible in above image, Doda Donchian indicator gave Buy signal @1.17312 and it gave profit of apporox. 68 pips by then.


The same call was confirmed by Doda-Bollinger bands too.


But shall one take such call?


Let us examine in detail.


The BUY signal was given when EURUSD was trading below Ichimoku cloud. That means such calls are risky ones. One should NOT take any Buy call when a currency pair is trading below Ichimoku cloud.


Currently, EURUSD is trading inside Ichimoku cloud - which is "No trade" zone.


Although with current pattern, EURUSD is likely to touch 1.18425, where it will face tough resistance. But still, I would wait to tarde this currency pair EURUSD either above Ichimoku cloud or below this cloud.


Support Levels for today are:


1.17567


1.17363


1.17033


Resistance Levels for today are:


1.18227


1.18431


1.18761


Stop loss should be @1.17728


 

Wednesday, October 4, 2017

Forex Trading Technical Charts Report | 04-Oct-2017

Below is the forex trading technical charts report for 04-Oct-2017.


I've taken major currency pairs technical charts into consideration using my favorites technical indicators - I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


EURUSD Technical Chart


After touching low of 1.17019 yesterday, it started moving little upwards and now, it has given buy signal @1.17710. But beware, it is a FALSE signal as the currency pair is still trading below Ichimoku cloud and Doda Bollinger bands indicator.


Wait for either it crosses cloud - which will take few trading sessions or wait for next short sell signal. Till then, sit on cash.


Support for today at : 1.17120, 1.6953, 1.16682


Resistance for today at : 1.17662, 1.17829, 1.18100


GBPUSD Technical Chart


GBPUSD currency pair gave a profit of 110.8 pips after giving sell signal @1.33768 and is moving sideways. Book profit at this stage and take another short sell call if it closes below 1.32214, which is its previous low. Do not take any long call at this stage.


Support for today at : 1.32232, 1.32079, 1.31832


Resistance for today at : 1.32727, 1.32880, 1.33128


 


 

Tuesday, October 3, 2017

EURUSD Technical Chart 03-Oct-2017

Below is the EURUSD Technical Chart currency pair explained with technical indicators.


EURUSD Technical Chart


I’ve used Doda DonchianDoda-Bollinger BandsIchimoku and ADX Candles in this chart. Time frame used is H4.


As suggested in my yesterday's post, EURUSD started its downtrend journey as all our signals confirmed that one-by-one. So, that was calculated risk.


You might be wondering why I am still saying it as "risk"?


The answer is even if all your tested technical indicators confirm the signal, this forex market is very very volatile and unpredictable. No can be sure 100% at any stage of ticking. One has to take risk to make money.


But that risk should be well calculated in advance rather than playing gambling.


Ok. Back to our technical chart of EURUSD.


EURUSD Technical Chart


At the time of writing this article, EURUSD is taking rest at support level 2 of today which is @1.17058; that means a profit of 69.7 pips from yesterday article recommendation.


What next?


First, make a stop loss of 1.17682


Continue with your short sell. Do not take fresh short sell entry at this stage. It may touch its support level 3.


Next support and resistance levels are:


Support levels:


1.17258


1.17058


1.16734


Resistance Levels:


1.17906


1.18106


1.18430


 


 


 

Monday, October 2, 2017

EURUSD Technical Chart 02-Oct-2017

Below is the technical chart of EURUSD currency pair explained with technical indicators.


EURUSD Technical Chart


I've used Doda Donchian, Doda-Bollinger Bands, Ichimoku and ADX Candles in this chart. Time frame used is H4.


EURUSD


 


After touching low of 1.1715 on 27-Sep-2017, EURUSD currency pair started its upward journey. But that journey was short-lived as it was trading below Ichimoku cloud.


So, after facing tough resistance from Doda Bollinger Bands, it started its downtrend journey again, which was confirmed by Doda-Donchian @1.17757


So, it's time to short sell in this currency pair.


Major support and resistance levels are:


Support @:


1.17828


1.17687


1.17458


Resistance @:


1.18286


1.18427


1.18656


Make your stop loss @1.17759


 

Wednesday, September 6, 2017

EURUSD Forex Technical Chart | 06-Sep-2017

Today, we're going to analyze the technical chart of EURUSD currency pair. I'm using time frame H4 on Doda Donchian, Doda Bollinger Bands and Ichimoku technical indicators.


EURUSD Forex Technical Chart | 06-Sep-2017


 


EURUSD Technical Chart


At the time of writing this article, EURUSD currency pair is trading @1.19616. Looking at Ichimoku indicator, it's clear that it is trading INSIDE cloud of Ichimoku indicator - which is termed as NO trading zone.


So, just wait and watch at this moment. It should either close above or close below the cloud to get the clear trend.


So, in next few hours, if it closes above 1.19344, take a long call on it.


On the other hand, if it closes below 1.18785, take the short call.


Important Support and Resistance Levels are:


Support Levels:


1.18794


1.18623


1.18347


Resistance Levels:


1.19347


1.19518


1.19795


I hope you understand my trading strategy with this article. If you've any doubts, please share in the comments section below.

Wednesday, August 30, 2017

NZDJPY Forex Currency Pair technical Chart | 30-Aug-2017

Let us analyze the forex currency pair NZDJPY today. I'm using my favorite technical indicators  - Doda Donchian, Doda Bollinger Bands and Ichimoku.


NZDJPY Forex Currency Pair


 


The time frame used is H4.


Although Doda-Donchian gave Buy signal @78.870 but at that time, it was trading below Ichimoku cloud. 


That means in a Bearish territory.


Also, the currency pair was below Doda Bollinger Bands.


That means the trading signal given by Doda-Donchian was the False signal.


But after it crossed Ichimoku cloud and enters the bullish territory and also above Doda-Bollinger Bands, there is no point in waiting here.


So, take a Buy call on this currency pair @79.686 for an immediate target of 80.018, which is its Resistance 2.


Other Support and Resistance areas are:


Support and Stop loss @79.518


Resistance @80.018 and @80.554


 


I hope you understand my trading strategy with this article. If you've any doubts, please share in the comments section below.