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Random article: Features of the analysis of Japanese candlesticks

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.

Popular article: Forex Reversal patterns: Head and Shoulders etc.

A number of reversal patterns is indicated in Forex: Head and Shoulders, Double top, Double bottom, Triple top, Triple bottom, Diamond. Head and Shoulders Top – is a classical reversal pattern of technical analysis, which is formed following to a long upward trend. The model is considered to be fair reliable and is often formed. But despite above-mentioned, many beginning traders do not manage to take profit using this graphic pattern. The reason is that positions are opened prior to forming this model. Let's figure out the structure of the figure and its formation on the chart of trading terminal. The model consists from three subsequent price extreme points, the middle one is higher than others (head), and the rest two are below the middle one and are roughly equal (shoulders). All three uphills are supported by the neck line.

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