Does the Japanese candlestick charting make sense?

May 20th, 2010

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

One more step forward our clients

May 18th, 2010

It is not a secret that InstaForex Company always strives to be closer to the clients and provide necessary information by convenient for every trader mean of communication. Despite the huge distance between the company and its clients, traders always feel broker’s concern. They have opportunity to get the most important and latest news about the company by means of Internet-communities and blogs. Today we gladly inform that InstaForex Company launched new projects in the cyberspace of the global network. Starting from this moment you can find company’s news, follow the analytical reports from leading InstaForex experts, monitor the contests results and view photo and video materials, posted in two new groups at Google and Yahoo.

Moreover, new micro-blog “Google Buzz” was established for your convenience. We will publish up-to-date economic news and financial indicators. Now you have the easiest way to get access to the necessary information: choose the portal you like and get the current news at first hand.

If you prefer to share your opinion, experience or discuss innovations of the company with people who thinks the same way, we invite you to visit groups located in the popular Internet-communities: FaceBook, Linked In, Yahoo-Groups.

If you do not want to waste your time or dissipate your energy on the necessary data search, then daily updated micro-blog at Twitter will become your provider in the world of economic news and fresh information summary from the financial markets.

Active users of blogosphere are offered to become readers of our blog, placed at the most popular blog-community LiveJournal.

Regular customers of video communities can daily familiarize themselves with up-to-date news of Forex world on the corporate channel of the company in YouTube.

Be a part of Internet-communities with InstaForex and you will always be kept up with the latest and the most important news of the company.

Added by Kirill Kuznetsov,
InstaForex PR-manager

Bollinger bands on Forex

May 14th, 2010

Bollinger bands are one of the trading indicators’ type, which is targeted to generate signals about the increase or the decline of volatility on Forex market. This indicator is developed for a trader to observe the tendencies on the market– whether it is calm or stormy.  If the market is even, the bands are converging, if the market starts to move, the bands are diverging.

Bollinger bands’ chart consists of three lines: in the middle – a simple moving average (SMA), higher is the upper band (SMA+2) and below is the lower band (SMA-2 standard derivations).

In order to calculate the indicator it is needed to compute a doubled divergence with the movement within a certain period of time, thereafter up- and downwards from the chart one plots the dots according to these calculations. In the result, there should appear a graph, resembling an envelope. The volatility ascend on the market will make the chart look diverging, and correspondingly, the lowering of volatility will be pictured as a converging envelope.

Bollinger bans are often used to recognize the moment when the price is ready to expand into a trend or, on the contrary, when a flat should be anticipated.

Bollinger bands have a few peculiarities from the analysis viewpoint. When prices start moving horizontally, and on Forex market there is no vivid trend, the bands are converging. When a new trend is forming, the bands are diverging. Thus, if the bands have been in the horizontal channel for a long term, a strong breakthrough should be projected resulting in a new trend.

Bollinger bands work well in combination with other types of charts. Though, taking a decision to open or close a position one should not consider signals of a single indicator. All your actions should be confirmed by numerous Forex indicators.

Bollinger bands are becoming more popular among other indicators; every trader using the technical analysis for his trading strategy, should know the way to employ it.

However, this indicator provides no precise signals for opening or closing positions on the basis of a price crossing the lines, but they can determine the borders, within which the price fluctuations can be analyzed by additional indicators. As a rule, together with Bollinger bands such indicators as the relative strength index, the MADC and Money Flow are used.

Added by Alexey Skachilov,
InstaForex
Clients’ relationship manager

InstaForex team took part in greeting the veterans

May 10th, 2010

Numerous cities all over the world have saluted marking the anniversary of the end of World War II! According to a regular tradition the team of the international on-line Forex broker InstaForex participated in honoring of the World War II veterans.

InstaForex group joined the public demonstration from the central location of the parade on the Victory Square to the memorial of 1200 guardsmen. Near the memorial, the representatives of the company together with the veterans and their relatives laid flowers in memory of all the heroes, who at a price of their lives achieved peace for future generations. InstaForex team warmly congratulated the veterans by handling flowers and presents to them, in acknowledgement of the accomplished during World War II acts of bravery.

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Unfortunately, the years go by. The number of direct participants, struggling for peace and future, free from tyranny and fear is getting less. But we will always keep their feats and valour in our hearts!

Our warmest congratulations to all veterans on the occasion of the Great Victory! We remember you and highly appreciate your deeds!

Trends and tendencies

May 6th, 2010

If a trader expects that working on Forex market can bring regular profit he needs to realize the economic laws according to which the market is functioning, as well as the peculiarities of the market.

This article dwells on the notion “market tendency”, or a trend. A trend and tendency both denote the general direction which the currency fluctuations follow at Forex market. Constant analysis, monitoring and estimation of tendencies and trends on the market allow a trader to open positions timely and gain profit. The majority of novices make the mistake as they do not pay attention to the overal trend direction while opening positions; this leads to opening false positions and a sequent loss of funds. Watching the dynamics of increases and downfalls a trader can see the dominating on the market tendency, its duration and can predict further advances.

On the whole, there are three types of trends on Forex:

The bullish trend is also called an uptrend or an upward trend. The peculiarity of this trend is that the lowest prices of market fluctuations start to increase gradually. The notion “bullish” appeared on the analogy with the animal ‘a bull’ who is tending to raise the enemy on his horns – or in case with Forex – the price.

The bearish trend is called a down-trend, or a downward trend as well. The characteristic is that prices start the declining movement. The name “bearish” emerged because of the connection with ‘a bear’, which as if pressurizes the price with all his heavy body.

Sideways trend or the flat market and the trendless market, denotes that there is no trend. A long-term flat demonstrates that in the nearest time there will be a strong break though on the market either directed to the bullish or to the bearish trend. The major feature of the flat is a lack of a clear price movement.

The basis of financial markets is the price. The result of any operation conducted at Forex currency market is fully dependent on the price. The price is very flexible and exposed to constant changes. Before conducting an operation on Forex, make sure that the trend is really up-to-date for the market and it is not a short-time recoil of the price in the opposite direction, this mistake is often made by traders with little experience, thus they are exposing their funds to a big unreasonable risk.

The most frequent mistake for a beginning trader is the wrong time of closing the position. A trader can make the incorrect market analysis, make a false determination of a market movement direction or even ignore the trend. This will inevitably lead to the situation when the position which could have brought profit, but was closed in bad moment will on the contrary bring significant losses. In order to define the trend on Forex market a trader can use numerous technical indicators and the market analysis.

If you are tending to achieve success on the international Forex market, do not forget about the important rule – a trend is your friend.

Added by Alexandr Demkin,
InstaForex Chief clients’ relationship manager