Why use candelsticks????

1. Using Candlesticks with Indicators and Patterns 1 Disclaimer: As trading in the Forex market is very risky, the reader if going beyond this point and applying the concepts and methods describing in this document do so on his or her own will and risk. The writer and or anyone involved in the compiling of this document will not be held responsible for any losses incurred by using the methods described in this document as no money management nor stop loss levels are discussed as it vary from trader to trader according to there own risk and capital profiles. 2009/7/13 1 www.forextradingmethod.info

2. 2009/7/13 2 www.forextradingmethod.info But complimenting Other techniques with that of Japanese candlesticks will give you that extra edge in getting a much better price – a lower price if you are buying and a higher price if you are selling. Hundreds of charts illustrated will convinced that Japanese candlestick signals lead other technical indicators in timing market entry and exit. It is because candlestick signals are based on an analysis of price itself, not timing. When you are analyzing the candle chart, you are in effect analyzing the psychology of the market participants that is reflected in its price.

3. 2009/7/13 www.forextradingmethod.info 3 Why using Candlesticks?? – Six reasons.. 1. Leading Indicator - They have the ability to show reversal signals earlier than other charting techniques. As such candlestick charts are a true leading indicator of market action. They regularly identify potential moves before they become apparent with other technical tools. Many Japanese candlestick patterns are not found in other chart techniques. 2. Pictorial - They are very pictorial and describe the state of players’ psychology the moment they unfold, all of which can be utilized to make meaningful trading decisions. Terminology like the “hangman”, “shooting star”, “dark cloud cover”, “hammer”, “abandoned baby” paints indelible word pictures which can assist the trader to remember the pattern through remembering its name. The Candlestick technique consists of hundreds of different pattern groups that accurately identify specific traits and tendencies.

4. 2009/7/13 www.forextradingmethod.info 4 3. Versatile - Candlestick charts are versatile in that they can be used alone or in combination with Western technical tools. They are unlike point-and-figure charts, which cannot be used alongside other Western technical indicators. Candlesticks use the same price data as bar charts yet the candlestick technique better promotes the ability to recognize complex pattern groups and predict the next possible outcome based on them. 4. Can be applied to any time-dimension - Candlestick charting techniques can be adapted for either short or long term trading. Candlestick charts are excellent for short- term trading through the use of intra-day charts like the 1-minute, 5-minutes, 15- minutes, 30-minutes and 1-hour charts. They can also be applied for longer term forecasting through the use of daily, weekly and monthly charts.

5. 2009/7/13 www.forextradingmethod.info 5 5. Flexibility and adaptability - Candlestick charts can be applied to follow as many markets as desired - be it stocks, futures, currency or commodity. In order words, a trader can apply candlestick principles to analyze or trade Malaysian stocks, index futures or crude palm oil futures. If traders wish to diversify their portfolio they can trade, for example, U.S. stocks, U.S. futures, foreign currency, Japanese or U.S. treasury bonds and for that matter any markets around the world. 6. Time-tested- Dependable and Useful - The candlestick charting technique is time tested and had been refined by generations of use in Japan. The fact that it is still very much in use today after more than 300 years since its discovery is testimony to its usefulness.

6. If you have any comment or experience on this method, please leave your message in our comment column in www.forextradingmethod.info 2009/7/13 6 www.forextradingmethod.info