Elements Of Candlesticks (You Need To Know)
Each Candlestick consists of four important elements:
1) The Body- Large bodies equals more liquidity and more volume involved in candlestick, smaller is other side which is smaller liquidity and volume.
2) The Length Of The Wicks- Larger wicks equals higher or lower rejection of price action, from the other side. Example: Pin bar candlestick at top of a bullish run up equals bulls are losing their strength and bears are starting to get control over current price action.
3) The Ratio Between The Body And The Wicks- Example: Doji or indecision candlestick generally has around same length of upper and lower wicks and bodies are small- so both bears and bulls are at a stand off with each one not winning at the moment... sideways price action.
4) The Position Of The Body- Look to left, what do you see? Where are the quarter theory lines on charts- you can plot all xxx000, xxx250, xxx500 and xxx750 lines which are the standard ones to either highlight or be aware of on any chart you trade from. Did current body make either a pin bar candlestick pattern, harami candlestick pattern or an engulfing candlestick pattern?
You need to know that 12 hours a day in Forex is high liquidity and high volume times: End of Tokyo to End of London, this is when most big moves happen.
You can google or YouTube more on Quarters theory which I strongly advise you implement in all of your trading, specially in this choppy price action. Do not be greedy and protection your profits- risk management is always #1. Understand each pairs ATR, lot size , pip value so you can only use 1% to 2% of account per trade, if you slowly grow account using compounding in Forex trading and be a successful trader. Good luck and Good trading.
1) The Body- Large bodies equals more liquidity and more volume involved in candlestick, smaller is other side which is smaller liquidity and volume.
2) The Length Of The Wicks- Larger wicks equals higher or lower rejection of price action, from the other side. Example: Pin bar candlestick at top of a bullish run up equals bulls are losing their strength and bears are starting to get control over current price action.
3) The Ratio Between The Body And The Wicks- Example: Doji or indecision candlestick generally has around same length of upper and lower wicks and bodies are small- so both bears and bulls are at a stand off with each one not winning at the moment... sideways price action.
4) The Position Of The Body- Look to left, what do you see? Where are the quarter theory lines on charts- you can plot all xxx000, xxx250, xxx500 and xxx750 lines which are the standard ones to either highlight or be aware of on any chart you trade from. Did current body make either a pin bar candlestick pattern, harami candlestick pattern or an engulfing candlestick pattern?
You need to know that 12 hours a day in Forex is high liquidity and high volume times: End of Tokyo to End of London, this is when most big moves happen.
You can google or YouTube more on Quarters theory which I strongly advise you implement in all of your trading, specially in this choppy price action. Do not be greedy and protection your profits- risk management is always #1. Understand each pairs ATR, lot size , pip value so you can only use 1% to 2% of account per trade, if you slowly grow account using compounding in Forex trading and be a successful trader. Good luck and Good trading.