Candlestick pattern trading was created by the legendary Japanese trader Homma Munehisa who used them to make a killing on the Osaka rice market in the 1700s. Japan’s isolation from the world kept candlestick techniques a secret for centuries until they were discovered and popularized by Steve Nison at the end of the 1980s.
You then need to see if the odds are on your side using the breakout so you check price momentum. You can find lots of momentum indicators to assist you time your move and get the velocity of cost on your side. The ones you pick are a matter of individual preference but I like the ADX, RSI and stochastic. If my momentum calculation adds up I go using the break.
If you look at the adverts online there all about how easy it is to learn currency trading and it is – ANYONE can do it but paradoxically 95% of traders get wiped out so why is this and how can you avoid the errors of the majority?
An exchange rate is the ratio of one currency against the value of another. The first currency is called the base currency, and the second is called the counter or quote currency. When buying, the exchange rate determines how much you should pay in the counter currency to buy one unit of the base currency. When selling, the exchange rate tells you how much you will receive in the counter currency units when you sell a single unit of the base currency. To take an example, let us look at the trading pair of EUR/USD, with the Forex quote of 1.2435/1.2440. To trade, you can either buy 1 Euro Dollar with 1.2440 US Dollars or sell 1 Euro at 1.2435. The difference in the two currencies is called the spread. To make money you need to sell at a higher price than the one you’ve bought in.
I always get amused by people saying you have to keep updating your forex trading strategy and keep a journal of losses and why they occurred etc. To complicated for me! If I lost that’s fine you have to have losses to make gains and if the system isn’t broke don’t fix it.