Does the Japanese candlestick charting make sense?

The Japanese technical analysis development was moving on during a lot of years. However, for a long time the Western world knew almost nothing about such popular technical analysis method as “Japanese candlestick charting” by means of which the Japanese traders and analysts have been running a financial analysis for more than 30 years already.

Opening the core of this kind of analysis worth saying that the Japanese candlesticks is a method which gives an opportunity to investigate the market condition for the present moment, in other words, consider the current state of the market. The Japanese candlesticks usage allows analyzing not only currency, but also stock and futures markets.

Methodically the analysis techniques based on the Japanese candlesticks is used above all for choosing the most suitable moment for making deals. However, if a trader has been practicing the Japanese candlesticks method for a long time, then the history of this method employment can introduce strategic changes into the general trading style of the trader.

Some experts of Forex market actively recommend to increase the Japanese candlesticks effect combining them with other indicators which are able to reflect the real financial markets situation strictly and clearly that will surely bring the highest results. But the analysis based on the Japanese candlestick charting can be a self-sufficient instrument for a trader. Actually, this method is more than autonomous and does not require additional “bells and whistles”.

The Japanese candlesticks have similar scheme with a bar chart.  As a rule, the Japanese candlesticks are used on the daily charts, it is caused by the fact that initially this analysis method was created and used for analyzing the day timeframe.  The meaning of this method comes from correlation of opening and closing prices during the same trading day, and closing prices of the previous trading day and opening of the next one.

Usage of the Japanese candlesticks charting together with other technical indicators as well without them will let each trader determine more accurate the current market sentiment and behavior.

More details on the Japanese candlestick charting are given in the book by John H. Forman “Candlesticks for support and resistance” where any currency player will get nuances and trade secrets of using this kind of analysis. The book describes over 50 different candlesticks and their combinations, in addition, you will know which from the technical instruments can be used with the candlesticks for achieving the most significant result, and which conversely will “dry” the effect of the Japanese candlestick analysis.

In the book you will also get the answers to absolutely all questions concerning the Japanese candles, besides, learning the book you will carry yourself with the new bounds of a technical analysis and graphically see how the Japanese candlesticks can bring success and profit on the international currency market Forex. Regardless of your experience and which market you work with: futures, share market, bonds, goods and currencies, John Forman’s book studying and further usage of these skills will make you successful on the market.

One more competent author John L. Person considering the technical analysis aspects carried out a research of the Japanese candlesticks charting in his book “A complete guide to technical trading tactics”.

You can download the books by Forman and Person devoted to the Japanese candles and other books covered all trading aspects on Forex market in “Library” section of InstaForex Company educational portal.

Added by Alexandr Demkin,
InstaForex Chief clients’ relationship manager

7 Responses to “Does the Japanese candlestick charting make sense?”

  1. SuperProfit says:

    i still don’t understand how it’s work. it’s much easier to make a fundamental analysis. IMHO.

  2. profit-hunter says:

    actually, it’s not clear… so how to use these tactic? please clarify..

  3. firefighter says:

    Oh yeah.. I read Forman’s book. And it’s really good guide in technical analysis. ;)

  4. sam86 says:

    for me its very difficult to make analyze market myself, i prefer use advisors. please make post about advisors

  5. Ruben says:

    I liked it and I want to know it all to pieces!

  6. Riki says:

    Thank you! It’s very comprehensible for beginners. The most interesting thing is the analysis of japanese candlesticks.
    The comparison of opening and closing price among days is very useful to me.

  7. LILU says:

    I’ve read “A complete guide to technical trading tactics”. It is wery interesting!

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