Candlestick Charting – The Number One Forex Trading Tool

Forex trading has been hugely impacted by the accessibility of the internet. Not only have financial institutions been able to get more accurate and up-to-date information, but the amateur forex trader has been able to access the same information with a few mouse clicks. It is therefore vital to use the best tools for the job and candlestick charting undoubtedly are one of the best tools available.

Candlestick charting was introduced initially by the Japanese within the rice industry, however, over the last couple of decades they have lit the imagination of forex traders all over the world and have almost become a universal standard. As someone once said “You can’t do today’s job with yesterday’s methods and be in business tomorrow.” Candlestick charting is definitely the most powerful tool available today.

Structure of a Candlestick

It is true that candlestick charts hold the same information that bar charts do i.e. a high price, a low price and the opening and closing prices. The actual body of the candlestick shows the opening and closing prices. In the early days of candlestick charting, if the body was black then opening was higher than the closing. If it was empty then the opening price was lower than the closing. Nowadays candle bodies are coloured, green for upward movement and red for downward. The use of colours makes the charts much easier to read.

Candlesticks show high and low prices for a given time period by using vertical lines which appear above or below the candlestick body. These lines are also known as shadows

So what are the main features of candlestick charting that separate them from other charting methods? Listed below are the two main features.

Visual appeal

This is one of the most important features. At a glance, the trader can quickly understand what is going on within a particular forex market. No matter what the time scale being used, the trader will be able to see the market movement and whether it is the sellers of the buyers who have dominated a given session.

Readability

Any trader who has mastered the basics of candlestick charting will quickly be able to identify the opening and closing price for a given currency pair. Candlestick chart show the same information as a bar chart, but in a prettier, graphic format. It is very important to be able to use the support and resistance levels together with the opening and closing prices.

Other advantages of candlestick charting include the following:

  • Trading patterns change over time. That is why no system will always work. But candlestick patterns are not a system hence candlestick patterns always work.
  • Candlesticks get you into price action much earlier than the majority of indicators. This means that the traders using candlestick patterns can enter trades earlier than those traders relying on indicators.
  • Candlesticks are the fastest form of price prediction there is.
  • Candlestick trading is very reliable. Providing that the patterns are properly picked, and
  • the poor ones weeded out, the probability of success is extremely high.

Anyone who seriously investigates the use of candles will learn that there are many patterns and candlestick formations that provide very useful information for traders.

The forex market is extremely volatile so it is important to remember the words of Warren Buffet said “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

Mastering candlestick charting is undoubtedly one of the most important skills that a forex traders needs to possess. This single tool will do more than any other to improve success for those who put in the effort to learn how they work and implement them into your

3 Ways Charts Focus On Goals

Successful organizations achieve their goals. Unsuccessful organizations do not. What makes successful organizations successful is the ability to keep everyone in the organization focused on the goals. This focus helps them make decisions and keep their actions focused on achieving the goal.

There are three ways charts can be used to help your organization achieve its goals.

  1. Analyzing and defining your goals
  2. Presenting your goals
  3. Providing the feedback

Charts force you to convert your goals from platitudes to Key Performance Indicators (KPIs). Converting your strategies and tactics and other actions into KPIs allows you to show their impact on your goals.

Charting the of your goals makes them real to your team. Charts show your attention to the application resources on strategies and actions that impact your goals. The focus also reduces the resources committed to actions that don’t affect your goals.

Having clearly identified goals does not by itself drive results. You need to communicate your goals. You need to show your business units, what their targets are. You may need to show your investors and creditors what you’re doing to achieve your goals.

The charts presenting specific KPIs measuring your goals and the actions you’re taking to your goals fill this need. A different set of charts can be presented to each audience allowing the focus to give them exactly what they need to see.

Finally, if you want to encourage people to continue focus on goals, you have to provide them with feedback. The same charts you used to communicate your goals and actions to reach them become a tool for reinforcing focus on your goals.

Using weekly, monthly and quarterly updates on performance let your team know you are paying attention. The result is a renewed focus on your goals.

The flexibility of charts allows you to fine tune your feedback. You can tweak your charts as needed to adapt them for different business units within the organization. The result is more specific and relevant feedback to each business unit. This approach is far more effective than broadcasting a general set of feedback reports or charts.

So,, if you want to improve your organization’s performance convert your numbers to charts. Use charts to identify your goals and tactics. Communicate your goals and relevant KPIs through charts. And chart ongoing performance against your goals and tactics to give targeted specific feedback to each business unit within your organization. Use charts for all three purposes and you will increase your organization’s ability to achieve goals.

Motivation – Keeping Your Visions Visual Will Keep You Focused on Your Business Goals