The use of candlestick technical analysis of the Forex market

Prediction with candlestick chart – one of the most popular methods of technical analysis of the late 80′s – 90′s. The word “Candlesticks” – candlesticks, used by the Japanese to refer to this type of schedule for the convenience replaced in other countries the term “candle” (sandles). Method of predicting the market using candlestick charts is from Menen professionals one of the most vivid and natural.
Most often, candlestick charts are used to analyze the market in a one-day time scale. This is due to the fact that the original method was developed and used specifically for the trading day. As pointed out by Ehrlich, the whole psychological background of forecasting “by candlelight” is based on the correlation of prices for opening and closing the same day, and the ratio of the previous day’s closing price and the opening of the next. Significant role in the development of figures, graphs produced candles, plays Sakata method, which is based on the use of the number “three” as a key. Therefore, the number “three” is often used when considering the figures in the chart candles (San coupled (“Three Mountains”), San-Pei (“Three Soldiers”), etc.).
This material is based on the known data about the kinds of candlesticks during the existence of this theory (ie, about 200 years) given in the literature with of the fundamental difference is that all the elements of graphs and figures formed by them (they are considered almost 60) are found and reproduced from actual candlestick chart of the major currency pairs traded in the Forex market.
In addition to explaining the names of the elements themselves candles in the appropriate class, the following is given an explanation of terms used in the analysis of candlestick charts.

Types of candlesticks – part I


Fig. 6.1. “Long day” on the graph yen
Long day is a movement of the daily price at which the opening and closing prices vary considerably.

Fig. 6.2. “Short Days” in the chart of Swiss franc
Short days – is trading periods with relatively small differences in prices of opening and closing.
Marubozu the Japanese word for “cut.” This name reflects the lack of shade from the opening or closing, or on both sides.

Fig. 6.3. Black Marubozu on the chart of Swiss franc
Black Marubozu is a long black body with no shadows on either side (Figure 6.3). This figure is often a part of the continuation of the bearish or bullish reversal patterns at the lower trend.
White Marubozu is a long white body with no shadows on either side. Is often the first part of the figure bullish continuation or bearish reversal.
Marubozu in which there is no upper shadow, called the closed-Boz (Fig. 6. 4).
Black closed Boz (yasunebike) is considered a weak spark, and the white closed Boz – strong candle.
White Marubozu having no lower shadow and black Marubozu no upper shadow called open Boz (Figure 6.5). Black open Boz (yoritsuki Takane) is bearish. It is believed that the open Boz is not as strong as closed.

Fig. 6.4. Closed white Boz (second and fifth figure on the left) on the chart yen

Fig. 6.5. Open white Boz on the chart of Swiss franc
“GRINDERS” (coma)
“Grinders” – a white or black candles with relatively short bodies with upper and lower shadows, having a length longer than the length of the body (Fig. 6. 6). They illustrate the uncertainty in the market and are considered neutral if the trend line is horizontal.

Fig. 6.6.

Types of candlesticks – part II – Dodjies

At full or fairly close agreement of price levels of opening and closing the candle is called Doji (Figure 6.7). Title Dojies means “simultaneous or overlapping lines” and “laggard” or “bad job.” Length of shadows at different Doji may be different. Trading period, which created the Dodges, called the day of the Dodges.

Fig. 6.7. Doji on the chart euros (marked “birds”)
The appearance of the Dodjies at the upper trend characterizes the onset of the uncertainty of demand in the market and suggests that the level of the upper trend will remain the same for long. Below we consider some of the common types of Dodjies.
Doji with long shadows
Doji with long shadows has long upper and lower shadows middle daily trading Range, which clearly shows the indecision of buyers and sellers (see Figure 6.8). If the levels of opening and closing are in day center Range, Doji candle is called “cross”.

Fig. 6. 8. Doji with long shadows (marked with “birds”) on the graph euros. Left – Dodge “cross”.
Doji “tombstone” (Toba)
Doji candle, “tombstone” (hakaishi) shown in Fig. 6.9, occurs when the market price for the day rises to the top of the new as well. then falls to the bottom of the day. The longer the upper shadow, the more bearish Doji-value “tombstones.”

Fig. 6.9. Doji “tombstones” on the graph euros.
Doji “dragonfly” (Lesser)
Doji “Dragonfly” takes place when opening and closing are at the top of the day (Figure 6.10). Like other Doji days, this day is the point of a market reversal. Lesser line with a very long lower shadow candle is also called Thakur.

Fig. 6.10. Thakur candle on the chart of Swiss franc
Doji four price
This doji candle occurs when all four basic prices (open, top, bottom and closing) are on the same level (Fig. 6.11). This candle represents the total uncertainty of the market, but it is not a reliable indicator of the actual uncertainty.

Fig. 6.11. Doji four price chart yen

Types of candlesticks – part III – “Stars”

“Star” appears when a small body “jumps” above or below the previous day long body (Figure 6.12). Perfect jump should surpass the shadows. “Star” indicates some uncertainty in the market. “Stars” are part of the many shapes of candles, mainly the reversal patterns.

Fig. 6.12. “Stars” in the chart of Swiss francs (marked with a “tick”)

Types of candlesticks – part IV – figures candles turn

“The Hammer” and ” gallows ” ( Kanazuchi / tonkachi and kubitsuri )
The figures of “The Hammer” (Figure 6.13) and ” Hangdog ” (Figure 6.14 ) consist of a single candle . They have a long lower shadow and a small body that is near or at the top of the daily trading Ranjit . These candles are candles version Thakur .

Fig. 6.13 . “The Hammer” in the graph pound
“The Hammer” ( tonkachi ) occurs when the lower trend and is so named because it is a kind of ” bounces ” off the ground. Unlike candles Thakur , lower shadow which is usually three times longer than the body , the lower shadow ” Hammer ” longer than the body in half. “The Hammer ” describes the inability of the market to continue selling .
” Hangdog ” ( kubitsuri ) is found at the top of the trend or at the upper trend. When there is a ” Hangdog ‘ market opens at or near the top level , for sale , and then increases to close at or above the level of the top.
If the body is ” Hammer ” is white, it means that selling prices closed unchanged at or near the top . This makes the “Hammer” is even more bullish. If the body is ” gallows ” black, it shows that the closing of 87
not able to go down to the level of the opening price, which makes even more bearish candle ‘ .
Forecast , which gives a figure with a single candle , such as ” Hammer ” and ” Hangdog ” necessarily requires confirmation.

Fig. 6.14 . ” Gallows ” on the graph pound (marked with ” ticcks “)
Figure of the ” roll-off ” consists of two bodies of different colors ( Fig. 6.15 ), the first of which . is less than the second.

Fig. 6.15 . ” Roll-off ” on the graph the British pound
The movement of the second day reflects the possible end of the previous trend. The color reflects the trend of the first day : Black – for the lower trend and white – for the top and the second body is the color of the opposite color of the first one. “. As a bull ,

and bearish figure ” roll-off ” switching to single candles , which must confirm their interpretation.
” HARAMI ” ( penalties )
Figure ” Harami ” consists of small body , whose length is within the previous long , as shown in Fig . 6.16 . Long day must exceed the length of the short by at least 30%.

Fig. 6.16 . Bearish ” Harami ” on the graph euro
Reflects the color of the first day existed before the turn of the trend of the market, and the color of the opposite color of the short day long . Harami can be either bullish or bearish. Bearish ” Harami ” goes to the ” shooting star “, which is also a bearish candle (Figure 6.16). Bullish ” Harami ” confirmed by a long afternoon of the same color as the second candle ” Harami “, which indicates a reversal of the market ( see Figure 6.17).

Fig. 6.17 . Bullish ” Harami ” on the graph yen
INVERTED “hammer” and “shooting star”
( Toba and Nagar Boches )
Inverted “The Hammer”
Inverted “The Hammer” is a bullish reversal candle (Figure 6.18).

Fig. 6.18 . Inverted “Hammer” in the graph pound
After the lower trend. His interpretation requires a bullish confirmation as the next day ‘s opening up the body upside down , ” Hammer .”
“Shooting Star”
“Shooting Star ” (Fig. 6.19) ” bounce ” from the body of the previous day. The signs of “shooting star” is a window between the closing prices of the first day and the second day of the opening , and the fact that the upper shadow is longer than the bottom .

Fig. 6.19 . “Shooting Star” on the chart British pound (marked ” bird “)
“Penetrate CANDLE ” ( kirikomi )

The figure of ” Piercing Candle “, shown in Fig. 6. 20 , consists of two candles on the market with the lower trend line. The body of the first candle , which continues to trend lower , black , and the second – a long, white . White day opens lower than the previous low of the day black and closes above the midpoint of the black body of the previous day.

Fig. 6.20 . ” Piercing plug ” on the graph pound (marked ” tick”)
Otherwise, the interpretation of this figure requires confirmation. The bigger the ” penetration ” of the white body black body of the previous day , and the more likely that this figure is offensive turn. ” Piercing candle ” goes to the ” paper umbrella ” or ” Hammer ” , which indicates a reversal of the market. Transitional candles fully support the bullish tendency ” Permeating Candles .”

” Dark cloud ” ( Sultan Qaboos )
” Dark cloud ” (Fig. 6.21) is a bearish reversal pattern and symmetrically opposite figure of the ” Piercing Candle” (Figure 6.20).
The first day of the figure represented by a long white body , which keeps the upper trend. The second day opens above the top of the previous day , ie, above the top of the shade, and then closed in the white body of the previous day. Closure of the black day must be at or below the middle of the white body of the previous day. The more ” penetrating ” the closing of the black body in white body of the previous day , the more likely bearish trend reversal. Figure of the ” dark cloud ” goes to the ” shooting star “, which confirms the bearish tendency figures .
” Dodge ” STAR ” ( Doji bika )
Doji “star” (Figure 6.22) is a warning of the impending change in trend . Sign – Doji “star” is a leap second day of the opening price and the closing price of the first , the second day is a Doji with short shadows .

Fig. 6.21 . ” Dark cloud ” on the graph yen

Fig. 6.22 . Doji “star ” on the graph euros (labeled “tick”)
Open the next day , if it is at a lower level , set the beginning of a trend reversal .
“Morning Star” and ” evening star ”
( sankava ake but mioyuo and sankava Yoi but mioyuo )
“Morning Star”
“Morning Star ” (Fig. 6.23) is the figure of a bullish reversal , which predicts the emergence of a bull market reversal .

Fig. 6.23 . “Morning Star” on the chart euro
“Morning Star” consists of a long black body followed by a small body with a jump down . The third day is a white body , which ” gets ” in the black body of the first day . Perfect “Morning Star” has a jump before and after the middle of the body ( body of the star ) .

“Evening Star” is a bearish analogous figure of the ” Morning Star .” Occurs during or after the upper trend. The first day is a long white body followed by a star appears (Figure 6.24) . The third day completes the figure of three candles ” Evening Star ” and fully supports the potential reversal of this pattern . The third day is a black body , which is closed in the white body of the first day . Like the ” Morning Star ,” ” Evening Star ” should have a jump between the first and second bodies and then another jump between the second and third bodies. “Morning Star” goes to the ” paper umbrella ” or ” Hammer “, which fully support the bullish tendency of the “Morning Star” (Figure 6.23) . Figure of the ” Evening Star ” goes to the ” shooting star “, which is also a bear and fully supports the ” Evening Star ” (Figure 6.24) .

Fig. 6.24. “Evening Star” on the graph yen

Types of candlesticks – part V

” Abandoned child ” ( Suteev th )
When Dodge “star” makes the leap up and does not even touch the shadows and then jump down and should also not apply shadows, there is a major top reversal signal (Figure 6.25) . This figure is called ” Abandoned baby top .” Symmetric to it is ” Abandoned baby bottom ” when Doji – “star” makes the leap down from the last figure of the downtrend. The figure is considered to be reliable when the first day of the previous trend reflects , the second day is a Doji whose shadows make the jump higher or lower than the top or bottom of the shade of the previous day . , The third day is the color of the opposite color of the first day and makes the leap toward a reversal. This figure is actually a special case of the “Morning ” and ” Evening ” Dodge “stars.”
“THREE STARS ” (las Boches )
Figure of the ” Three Stars ” is a very significant figure reversal. “Three Star” formed by three candles Dodges , where the average is Doji Doji – “star” ( see Figure 6.26) .

Fig. 6.25 . ” Abandoned baby top” on the chart yen

Fig. 6.26 . ” Star ” on the graph euro
The reason for the appearance of a trend reversal of this pattern is the mass reaction of traders to that the uncertainty of the market, which is characterized by the presence of three consecutive Dodges . Figure of the ” Three Stars ” turns into “Spinner “, which indicates indecision of the market ( see Figure 6.26) .
” Soaring TWO CROW ” ( sewn Banaru )
The figure of “Two ravens soaring ” suggest a jump between the small black body and the body of the second day that precedes it (Figure 6.27) .

Fig. 6.27 . “Two ravens soaring ” on the graph Swiss franc
This figure precedes the onset of a bearish reversal. The body of the second black day closes above the closing level of the white body of the first day . “Two ravens soaring ” can move on to the next figure bearish reversal 96
or immediately followed by an even more bearish figure that closes below the previous day’s close .
” COUNTER LINE ” ( dei September or giakushu September )
The figure of ” Counter- line ” is formed when the opposite color candles are the same or near the closing price (Figure 6.28) .

Fig. 6.28 . ” Counter- line” in the chart of Swiss francs ( marked ” birds “)
The first day of bovine figure of the ” Counter- line” is a black candle. The next day opens lower , and, in contrast to the ” Permeating candle ” , the closing of the second day , ” the meet lines” does not penetrate into the body of the previous day . Therefore reversal signal ” Permeating candle ” is stronger than the signal “counter lines .” The figure of ” Counter- line” passes to a candle , which continues a trend reversal .
” CLASP ” ( yorikiri )
Figure of the ” buckle ” is a candle that is either bullish or bearish . Bull’s ” Hook ” – a long white candle that opens at the bottom of the day and moved higher during the day (Figure 6.29) .

Fig. 6.29 . Bull’s ” Hook ” on the graph Swiss franc
As the bull ” Zip ” acts usually white Marubozu open , and as bearish – black open Marubozu . The longer the body , ” fasteners “, the more important it is . It is believed that the ” Hook ” as the days Dodges , more important , if she did not appear for a while on the candlestick chart .
“Three White Soldiers” (aka Sanpei )

“Three White Soldiers ” – a bullish reversal pattern that is represented by a series of three white candles with consistently rising prices closures (Figure 6.30). Each candle opens the figure at or below the previous day’s closing price and must close at or above the level of the top of the day .

Fig. 6.30 . “Three White Soldier” in the chart of Japanese yen
If this figure appears in a low price or after a period of stable prices, it involves raising . The value of the figure above,

If the opening price of the second and third days are above the mid- body of the previous day.
“Promoting UNIT ” (saki Tsumari )
” Povyshayushiysya unit – the figure of a bearish reversal. As shown in Fig. 6.31 , this figure is similar to the figure “Three white soldiers .” Three white day this figure follow one another sequentially with higher levels closing each day body opens at the previous day . However, it is identified with the upper trend, while the “Three White Soldiers ” takes place at the end of nizhngo trend. If the second and third white candle shows signs of weakening , the figure is considered a ” step-up unit .” Signs of weakness demonstrated long upper shadow on the second and third days. Two days with long upper shadows indicate that removal is profit , as the increase expires . The figure of ” Rising Power ” goes to the long white candle with a long upper shadow , which shows the decrease in growth of closing prices , and determines the character of a bear figure.

Fig. 6.31 . ” The rising block ” on the graph yen
” MEDITATION ” ( aka Sanso Shian Boches )
” Meditation ” – a bearish reversal pattern that requires confirmation ( Fig. 6.32 .) The figure appears after traffic backed up , and shows that the trend is coming to an end. As shown in Fig. 6.32 ” Meditation ” is similar to the figures “Three White Soldier ” and ” The rising block .” It consists of two long candles with a new horse in each of them and a small white candle ( top or a star ) . Between the second and third spark may occur window . During the formation of the figure of the ” Meditations ” bulls out of the market and comes bearish trend reversal .

Fig. 6.32 . ” Meditation ” on the graph the British pound
The main difference between the ” Meditations ” of “promoting power ” lies in a sudden decrease in the length of the third candle shapes. In conjunction with the first bearish candle third candle ” Reflections ” can create a shape “Evening Star”
“THREE BLACK CROW ” ( Sunbeam Garasu )
“Three Black Crows ” – a bearish reversal pattern that does not require confirmation ( Fig. 6.33 .)

Fig. 6.33 . “Three Black Crows ” on the graph Swiss franc
This figure consists of three consecutive black candles dropping , each of which opens into the body of the previous day and closed with a new bottom. The figure of “Three Black Crows ” goes to a long black candle , which fully supports the bearish tendency of the figure. 100
” THREE IDENTICAL CROW ” ( Doji Sunbeam Garasu )
” Identical Three Crows” – the figure of a bearish reversal without confirmation (Figure 6.34) .

Fig. 6.34 . ” Identical Three Crows” on the chart yen
This figure is a special case of the figure “Three Black Crows “, when the second and third days of the black opening at or near the level of the previous day . The figure reflects the panic selling , causing downward price movement . Crow , ” virtually no flexibility . Like the figure of the ” Three Black Crows” , the figure ” Identical Three Crows” goes to a long black candle , which fully supports the bearish tendency of the figure.

Types of candlesticks – part VI

” Breakthrough ” ( Hanaro site but Shinta tsuke )
For this shape , especially bear embodiment , verification is recommended .

Fig. 6.35 . Bullish “Breakthrough ” on the graph yen
Bullish figure “Breakthrough” appears (Figure 6.35), while the lower and the trend is accelerating sales before the oversold market . The figure begins with a long black day , followed by another black day whose body makes the jump down . When the lower three days following the jump sequentially set lower prices. All the days of the black figure , except for the third day which can be either black or white. Three days after the jump are similar to the figure of “Three Black Crows ” in the sense that their top and bottom are consistently lower. The last day completely fills up the little black days.
Bear’s figure of “Breakthrough ” includes a jump in the direction of the trend, followed by three consecutive days with a higher price (Figure 6.36) . In an uptrend, prices make the jump , followed by two days to charge higher prices . In the third and fourth days the trend persists , consistent with a higher close with the trend. Color days shall be white except that: the third day which may be either black or white , until the formation of a new price top. Rates bottom set three days after the jump must also be higher than the bottom of each price previous day . The figure describes the rise in the trend ‘ until the situation perepokupki . Last day sets a trend reversal after pulling the previous figure elements .

Fig. 6. 36. Bear’s “Breakthrough ” on the graph euro
” DBE CROW ” ( Niva Garasu )
“Two Crows” – a bearish reversal pattern ( Fig. 6.37) , which requires confirmation .

Fig. 6. 37. “Two Crows” in the chart of Swiss franc
This figure is considered as a figure of a bearish reversal in the situation where it closes the window formed abruptly after a long white piece of the upward trend after the bull market ends.
“THREE IN UP” and ” DOWN IN THREE ” ( and are Harami Harami saga )
The figures of “Three Inside Up ” and ” Three Inside Down ” is a confirmation of the figures , ” Harami ” that do not require confirmation for themselves. As shown in Fig. 6.38 and 6.39 , the first two days are the same as ” Harami “. The third day is confirming the date of closing for either bullish or bearish case. Bullish ” Harami ” followed by the third day after its formation takes place a higher level of closure ( Fig. 6.38) , the figure will be “Three Inside Up” . By analogy , a bearish ” Harami ” with a lower level of closing on the third day after its formation ( Fig. 6.39 ) is a figure of “Three Inside Down .”

Fig. 6.38 “Three inside up” on the chart British pound (marked with ” birds ” )

Fig. 6.39 . “Three inside down ” on the graph the British pound
( tsuiumi are and Tsutsumi saga )
The figures of “Three Outside Up ” and ” Three Outside Down ” (Fig. 6.40 and 6.41) are confirmations of figures ” roll-off ” that do not require confirmation for themselves. By analogy with the above features figures “Three Inside Up ” and ” Down Three Inside ” with respect to ” Harami ” in this case, a figure ” roll-off ” to be either higher or lower closing the third day depending on figure is bullish or bearish .

Fig. 6. 40 . “Three outside up ” on the graph yen

Fig. 6. 41. “Three outside down ” on the graph the British pound
” CHILD conceal SIP ”
( koiubame iuiumi )
” A child who conceals a breath ” – the figure of a bullish reversal without confirmation (Figure 6.42) . The figure reflects a situation where the first two days are black Marubozu or close to it, by supporting the downward trend, which then , in spite of the opening at the level of the previous close , starts to run low , as evidenced by the long upper shadow of the third day (trading for some time was above the opening price ) and there is a bullish reversal.

Fig. 6. 42. ” A child utaivayushy sip ” on the graph yen
” SANDWICH ” ( giakusashi Niten Zoko )
” Sandwich ” – a bullish reversal pattern , which is expected to confirm the presence (Figure 6.43) .

Fig. 6. 43. ” Sandwich ” on the graph euro
Figure of the ” sandwich ” consists of two black candles , between which there is white . The closing prices of the two black bodies are approximately equal, thereby determining the level of support , where you can expect a reversal. In the long run , ” sandwich ” goes to bovine ” inverted hammer “. If it does not, ” sandwich ” may end the black candle , which is why the figure is required for confirmation .
The market has been in a trend when prices have made the jump to the next day . Prices never enter Ranjit previous day and then will close another jump .
” Domestic pigeons ” ( sewn banare Kobato gaeshi )
“Home dove” – the figure of a bullish reversal , which is expected to confirm (Figure 6.44) .

Fig. 6. 44. “Home dove ” on the graph the British pound
The figure “Home Pigeon ” looks like ” Harami “, both of which black body . “Home dove” is the situation when the next day after a long black day (the market is in a downtrend ) continues to trade within its Range . Depending on the strength of the previous figure shows the trend of its deterioration and the possibility to withdraw from the market . In the long run , ” home blue ” goes to a long black candle with lower shadow , which is not bullish , which causes the need for further confirmation.
” BOTTOM STAIRS ” ( Khashig gaeshi )
Figure bullish reversal . It is assumed confirmation .
After the lower trend followed by four more nizkimiurovnyami closure and black days , the market is trading above the opening level (Figure 6.45) . This action is the first indication for the purchase, even if the market is still closed at a new bottom. The next day, prices jump up and do not come back . Level closing the last day is much higher than the previous day or two.

Fig. 6. 45 . ” The bottom of the ladder ” on the graph the British pound
” The bottom of the ladder” reflects a situation where after going down prices stabilize, and then jump up, and the closing level is much higher. With a large volume trend reversal is very likely ..
” SAME LOW ” ( Niten Zoko / kenuki )
” The same bottom” – a figure bovine fracture ( Fig. 6.46) , which is expected to confirm .

Fig. 6. 46. ” Same down” on the chart euro
By the figure of the ” Bottom of the Same ” applies the same concept as the figure of the ” sandwich “, because in fact the first of which can be obtained if the average of the second component to remove . Then the rainy day left continues to trend lower , and the next day is closed at the same level of closing. This figure indicates , so that the bottom of the trend achieved . Body two days may be either long or short. At the same time , ” Same Bottom ” can move to a long black line , due to the nature of which bear the “same bottom” requires confirmation.

continuation patterns
Candlesticks contain certain combinations of elements that create the figures that confirm the continuation probability trendayu figures continue , in accordance with the method of Saka- one are ” rest time ” of the market .
” LEAP TASUKI ” ( banare tasuki )
Racing Tasuki refer to the figures continue to be advised to confirm . ” The jump Tasuki ” includes a candle Tasuki after the jump in the direction of the current trend , usually upward . Typical candle Tasuki occurs when the price opens to a lower level following the first white candle for the previous day , and then closed below the bottom of the previous day . ” The jump Tasuki ” includes a candle Tasuki after the jump in the direction of the current trend. Figure of the ” jump Tasuki ” (Fig. 6.47 ) is formed by a white candle , which jumps up from the previous white candle , and then followed by a black candle .
The black candlestick opens within the body of the second day and closed below the body of the white candle. It is essential that the jump between the first two days is not filled . , So that the previous trend should continue . Color of the first day is not as important as the color of the second and third days. It is better that he had the same color as the second day, which will fully support the continuation of the trend.
Ultimately figure of the ” jump Tasuki ” goes to the long white candle.

Fig. 6. 47. ” Tasuki jump ” on the graph euro
WHITE CANDLES ” side to side ” ( aka RUNTIME )
The figure of ” From side to side” , made up of white candles can be as bullish and bearish . The first does not require confirmation for a second confirmation recommended. The essential here is the presence of two white candles that made the leap in the direction of the current trend. In the formation of ox- white candles ” from side to side ” while the upper trend white candle makes the leap above the previous day’s body and it is followed by a white candlestick with the same opening price (Figure 6.48) .

Fig. 6. 48. White candle “From side to side ” on the graph yen
This figure is also called the upper shock of white candles ” from side to side ” ( uvappanare narabiaka ) . Bear white candles ” from side to side ,” also referred to as the lower shock of white candles ” from side to side .” Step Low black candles ” From side to side” definitely indicates the continuation of the lower trend.

Types of candlesticks – part VII

Types of candlesticks – part VII


” METHOD OF THREE CANDLES ” ( banare SAUV odatekomi )
Common ” method of three candles ” is known in the bullish and bearish versions. In both cases, the figure is a continuation of that trend are corrected without its reversal. These figures represent the ” rest days ” of the market . Confirmation is not required . At the upper trend ( “The method of ascending three candles “) long white candlestick is formed (Figure 6.49) . This is followed by a group of candles with a small body that consistently falling. The ideal number of these small candles – three. This means that all the candles with small bodies including upper and lower shade remain Ranjit first long white candle . Small candles can be any color, but black is preferred . The last candle is due to close on a new top.

Fig. 6. 49. The actual figure of the ” Method of three increasing candles ” on the graph yen
The figure of “Method dropping three candles ” is bearish analog figures “Method three increasing candles .” The market should be in the down trend, when there is a long black candlestick . It is followed by three small candles rising , usually white , whose bodies are kept Ranjit first day. Ultimately figure “Method three increasing spark ” goes to the long white candle , which fully supports the bullish continuation. Figure of the ” Method of falling three candles ” goes to a long black candle , which fully supports the bearish continuation.
” SEPARATE LINE ” ( iki Chigaev September )
” Separate lines ” – is a trend continuation pattern (Figure 6.50) , for which a bullish option requires continued . In the formation of figures ” Separate lines of ” the first day of a color, the color of the opposite of the current trend . The second day is the color of the opposite color of the first day. Ideally, these two bodies meet in the middle , at the opening price. In an ideal bullish white candle figure should also be bullish , ” Buckle “, ie, the opening is at the bottom of the day . The opposite is true for a bearish figure of the ” Separate lines .” This figure reflects the market situation when the market moves up , but formed a black body , which is the cause for concern. Prices go up and then shut up , which suggests that the previous upward trend will continue. For a bearish figure ” Separate Lines ” opposite scenario . Dodges , and especially the ” long-legged ” doji represents indecision in the market and therefore does not fully support the continuation of the bullish figure. Bear figure of the ” Separate Lines ” goes to the spark plug with a black body at the lower end of Ranjit / This candle is bearish and therefore supports a bearish continuation figure .

Fig. 6. 50 . The actual figure of the ” Separate lines ” on the graph euro
” LITTER ” ( respect banare Sante mis )
” Litter ” – bullish continuation pattern , which is a version of the figure of the ” Method of three increasing candles ” and does not require confirmation ( Fig. 6 . 51).

Fig. 6. 51. The actual figure of the ” litter ” on the graph yen
In more ideal case, the first three days ” Mats ” begin as in Figure “Two crows soaring “, except that the black body ( third day ) decreases the body daylight . This is followed by another black body that closes even lower , but still in Ranjit first white body. Then comes a series of white days with a strong advance to close above the top of the highest of the dark days . Figure of the ” litter ” shows the great strength of the signal going on than “Method three increasing candles ” because ” litter ” does not create a long break the current trend.
” IMPACT OF THREE CANDLES ” ( Sante takes into Karasu but Bacau September )
Consisting of four candles figure of the ” Strike three candles ” – a figure that requires confirmation , which can take place in clearly defined trend .

Fig. 6. 52. Bullish “The impact of three candles ” on the graph Swiss franc

Fig. 6. 53. Bear ” Strike three candles ” on the graph yen
Known bullish version of this figure (Figure 6.52) and bearish (Figure 6.53) in the form of a bull with three white days with consecutive higher highs followed by a long rainy day (Figure 6.52) . This long black day opens at a new top and then dive to a lower bottom than the first day of a white figure. In the embodiment, the lower bearish trend is represented by three black days , each of which has a consistently lower bottom ( Fig. 6.53 .) Black Day bovine variant and white day a bear market are days of rest . In the end, the trend in the movement prodozhaet pervonachalnoi direction.
( banare SAUV haiu mis banare SAUV ippon and cottages )
The figure of “Method jump three candles ” known in the bullish version , entitled ” Method of the top jump three candles ” (Fig. 6.54 ), and in a bull as a ” method of the lower jump three candles ” (Fig. 6.55 ) , requires confirmation. Between the two candles of the same color a jump (window) . The color of these candles should reflect the trend of the market. The third day with a candle opposite
color opens in the body of the second candle and then closed in the body of the first candle is closing at the traditional terminology , closing the window.

Fig. 6. 54. ” The top three candles jump ” on the graph the British pound

Fig. 6. 55. “Lower jump three candles ” on the graph the British pound
“Attacks” ( sashikomi )
” Blow ” – bearish continuation pattern , which requires confirmation . this

Fig. 6. 56. ” Blow ” on the graph yen
Figure vozntkaet on a downward trend as the second day of white opened well below the previous closing days of black and closes with a long upper shadow , but not filling the window between these days . The configuration of the figure reminds attack swordsman ( second day) with respect to the first day . The failure of the second day to get close the first day is a sign of continuation of the bearish trend of the market.
” Three Mountains ” (san shown)
Figure of the ” Three Mountains ” (Fig. 6.57 ) form a line that makes up the top of the market. This is similar to the traditional western formation ” triple top ” on a line chart when the price rises and falls three times , forming peaks and troughs. A variation of the figure is the figure of the ” top three Buddhas” (san – sleep) , which is an analogue of the well-known formation of “head and shoulders” .

Fig. 6. 57. “Three Mountains” in the chart of Japanese yen

What is Forex Trading?

The international currency market Forex is a separate species of the world financial market. Forex traders is to generate profit from the purchase – sale of foreign currency. The exchange rates of all currencies that are in the market turnover are constantly changing due to changes in supply and demand, subject to strong viyaniyu any important for the human society event in the sphere of economy, politics and the environment. As a result, changes in one direction or another current value of the foreign currency, expressed, for example, in U.S. dollars. With this change in accordance with the well-known principle of the market “to buy cheaper – sell high”, traders can profit. From other sectors of the financial market Forex has a rapid response to the impact of the numerous and ever-changing external factors, accessibility to all individual and corporate traders, the extremely high turnover, which creates a warranty of liquidity in currency rates, day functioning, allowing traders to work outside normal working hours or during national holidays in their country, using working at the time the foreign markets.
Like any other market, Forex trading with its exceptionally high potential profitability is associated with a significant risk. The success of it is possible only after a certain training including an introduction to the structure and varieties of Forex, the principles of exchange rate determination, the factors affecting the price change and the degree of risk in trading, the sources of information for the consideration of these factors, methods of analysis and forecasting of the market movement, rules and tools of the trade. In preparation for the Forex trading plays an important role training using a demo account that allows you to put into practice the theoretical knowledge and acquire the necessary minimum trading experience without risk of damage to property.
Brief information about the origin and development of the foreign exchange market. Currency trading has a long history that dates back to the times of the ancient East, and during the Middle Ages, when caused international banks began to apply the exchange means of payment, valid for presentation to third parties, thereby increasing the flexibility and growth in the number of foreign exchange transactions entered into, began the final formation of the foreign exchange market .
The modern market rates for Cawthorne characterized periodically successive periods of rising volatility (frequency and magnitude of
changes) prices and their relative stability emerged in the twentieth century. Until the mid-’30s London was the leading center for foreign exchange trading, and the British pound was the currency for settlement and the creation of reserves. Since then currency trading via telex or telegram, the British pound was the common name “cable” (telegram). After the Second World War, when Britain’s economy has suffered a great loss, and the United States was the only of industrialized countries that are not economically affected by the war, the U.S. dollar, according to the Bretton Vudsskim agreement (1944) between the U.S., Britain and France became the backup currency for all the capitalist countries with a hard peg, their currencies to the U.S. dollar (the creation of the exchange rate band, which should provide the central banks of the countries through intervention or buying currency). In turn, the U.S. dollar was pegged to gold at $ 35 an ounce. The same contract was formed the International Monetary Fund (IMF), which plays an important role in providing credit support to developing and former socialist countries undertaking economic reforms. To meet these goals the IMF uses such tools as reserve tranche to enable countries to use the resources of their own membership quota at maturity, credit lines and agreements such as stand-by. Lines of credit and stand-by – agreements are standard forms of IMF loans, as opposed to compensation such as financial support, which is designed to extend financial assistance to countries with temporary problems due to the decline in exports; replenishment of reserve stocks, intended to aid in the accumulation of primary commodities resources in order to ensure price stability in specific product groups, and extended support to assist countries in financial difficulty, which is the size or duration greater than the volume of other forms of assistance.
An important milestone in the history of the financial markets of the twentieth century was the introduction in the late 70′s freely floating exchange rates, which led to the formation of Forex in its modern sense. This means that the currency may be traded by anybody and its value is a function of the current supply and demand on the market and specific intervention that require constant monitoring, no. After the introduction of a floating exchange rate there was a significant increase in the volume of trade in the Forex market. If in 1977, the daily turnover stood at its U.S. $ 5 billion, by 1987 it grew to 600 billion, and in September 1992 stood at $ 1 trillion by 2000 and stabilized at the level of about one and a half trillion dollars . This significant increase is due to the major factors discussed below. An important role is played by factors such as increased volatility of exchange rates, the efforts of the mutual influence of the economies of various countries on the value of the interest rates of central banks, which essentially depends on the exchange rate of the currency, increase competition in product markets and, in equal measure, amalgamation of different countries, technological revolution in the field of foreign exchange operations. The last expression in the creation of automated dealing systems and the transition to currency trading on the Internet. Dealing systems banks of different countries in a single network, and special matching systems are electronic brokers.
The development of computer technology, software, telecommunications, and increased experience have led to an increase in the skill level of traders and their ability to make profits and reduce risk in operations. Because of this increase in trade qualification also affected the growth of trade.
Regional reserve currency. Along with the world’s reserve currency – the U.S. dollar, currently, there are other regional and international reserve currency. In 1978. Nine countries – members of the European Union adopted a plan to create the European Monetary System, for which the control was created by the European Monetary Cooperation Fund. By 1999. these countries have drawn up a so-called eurozone, was the transition to the single European currency, the euro.
The euro was released in the form of banknotes of 5, 10, 20, 50, 100, 200 and 500 (see Fig. 1.1) and coins of 1 and 2 Euros and 50, 20,10, 5, 2 and 1 cent.
Euro is a regional reserve currency for the euro-zone countries and the Japanese yen – for South-East Asia. In certain situations, the international reserve currency is also the Swiss franc.
The role of the U.S. Federal Reserve and other central banks of the “Big Seven” in Forex. All central banks, including the U.S. Federal Reserve (Fed) have an impact on the foreign exchange market through changes in interest rates and foreign exchange operations (intervention purchases and currency).
Fig. 1.1. Euro banknotes.
Of the most significant foreign exchange for forex trading is an agreement to repurchase (repurchase agreements), providing for the re-sale of the same system previously purchased by customers currencies at the same price at the agreed time in the future (usually within 15 days) and with a certain interest rate . The volume of transactions on such an agreement corresponds to the amount of temporary injection of reserves into the banking system. The impact on the foreign exchange market is done in order to weaken its currency. Repurchase agreement may impose obligations on either the client or the bank (Fed).
Negotiated contracts for the sale of (matched sale-purchase agreements) are opposite to repurchase agreements. In carrying out the agreed contract of sale, the bank or the Fed sells a currency with a view to its immediate delivery dealer or a foreign central bank, agreeing to buy the currency back at the same price at the agreed time in the future (usually within 7 days). This agreement aims to reset the temporary reserves. The volume of transactions on such an agreement corresponds to the amount of temporary relief provisions. Effect on the market intended for the fact that, to enhance its currency.
Among the foreign currency transactions is placing money in the other central banks or mezhdunarodnh funds. In addition, the Fed since 1962., Has signed a number of agreements with other central banks on currency exchange. For example, to help the allies in the war to liberate Kuwait from Iraqi occupation in 1991: 1990. Bundesbank and the Bank of Japan placed the money in the Fed. Through other central banks made U.S. contributions to the World Bank and the United Nations etc..
Intervention in the foreign exchange market by the Treasury and the Fed are aimed at ensuring orderly market or exchange rate management. They are not intended to affect the state’s financial reserves.
There are two types of currency interventions: naked (naked intervention) and sterile (sterilized).
Naked, or unsterilized intervention is associated exclusively with foreign exchange trading. Everything that happens in this case – it is the purchase or sale of the Federal System of dollars for foreign currency. In addition to the impact on the foreign exchange market, while there is a change in financial situation due to the inflow or outflow of money. A noticeable change in the financial flows makes it necessary to adjust the size of the dividend payment, to change the prices and to make other amendments at all levels of the economy. Therefore, the effect of naked foreign exchange intervention is long-lasting.
Sterilized intervention is neutral in terms of its impact on cash flow. Since not many central banks have
they want their intervention in the currency markets tially all aspects of the economy, sterilized intervention is preferable. The same applies to the Federal Reserve. Sterilized intervention involves an additional measure in the original currency of the transaction. This measure is to sell government securities, compensating increase in provisions due to the intervention. It is easier to understand if you imagine that the central bank intends to finance the transaction currency by selling a certain amount of government securities. Since sterile intervention affects only the level of supply and demand separate currency, its effect is short-term or medium-term.