Forex encyclopedia

Trading on the financial instruments with high volatility is rather a difficult task, especially for intraday traders. In this case technical analysis works with a lower success rate than when you are trading the daily charts of the major currency pairs. Therefore, in the trading on the volatility is necessary to consider some features which will be discussed in this article. The advices presented below will help anyone who trades on the Forex, no matter what strategy they use. The first advice relates directly to pairs with high volatility. Such pairs should not be tradable beneath the hour time frame. Fluctuations in prices lower H1 does not largely carry a scenario of price changes, they are difficult to predict the movement and do not represent the actions of the crowd from a logical point of view. Therefore, if you are going to trade on the volatility instruments within the day, do not use the time-frames below H1.
The market price of each movement in a certain period of time can be represented in the form of candles, possessing the opening, closing, high and low prices. Appearing one after another, Japanese candlesticks show traders information about the market movement. But as it is well known, analysis of Japanese candlesticks is subjective and even the brightest candle patterns are not always triggered with absolute precision. Therefore, analysis of individual candles and their combinations has some features. 1. The place where candle pattern occur The first in the such feature of this type of analysis is the o place where candle pattern occur on chart. Prior to opening a position, you should carefully study the market situation that preceded appearance of combination of candles. For example, the pattern "dark cloud" that emerged near the strong resistance level, should be interpreted more as a reversal pattern rather than "bearish" absorption showed outside the scope of resistance. The same way, formation of "doji" after a prolonged trend is a much more significant model than if a candle occurs on a flat market.
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