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    Most Effective Online forex trading techniques - Steps by Step Explained

    Candle charts Vs Bar Charts and powerful henkin ashi technique

    Candlesticks are one of the most important and powerful analysis tools in traders toolkit.

    Here i have selected some candles patterns that i believe every trader should know in order to understand chart upto some extent. This candles patterns can make a good trading decisions.

    Here my focus is on minor trend reversals, Minor trend or short term trend typically lasts in cyclical manner for 5 to 20 days.

    Bars Vs Candle

    In Candlestick chart, the difference between the open and the close is called the REAL BODY. The amount went higher beyond real body is called the upper shadow. Amount went lower is called lower shado

    Advantages of candle vs bar charts:

    1. Candlestick charts are more visual and understanding. Once you get used to the candle chart,it is easier to see what is happening in a market in specific time pried from bigger timeframe candle to lower time-frame. It increases deep understanding of current scenario of market.

    With bar chart u need to see OHLC carefully and need to feel price action. With Candlestick charts it is done.

    2. With Candlestick u can spot any trend easily by looking colour of Candle and it's pattern. Sometimes larger candles looks dramatic means something came up in terms of data and market shooted with it...

    3. Candle plays very important role in spotting market in reversal position. Some times reversible patterns are cup and handle,double top and head and shoulders.

    Some important Candlestick patterns.

    1. Hammer

    Real body remains on top of the candle. Candle opens from high side and closes near to its previous opened price. Hammer makes reversal pattern off...  It acts as a support level many times...

    2. Doji

    It texture is somewhat similar to hammer. Only difference is that, its opening and closing price almost remains same leaving long tail behind in opposite direction(consider at least 75% of actual height of the candle) doji candles in bigger time frames creates good decision at the end time of the market on late Friday.... 

    Sometimes Candlestick charts can create new challenges also... To make it simple we can use henkin ashi with traditional Candlestick charts.

    Henkin ashi is defined, henkin as a 'Average or balance' in Japanese while Ashi means 'foot or bar' it means on foot balance. 

    It shows 'visuals immediate' integrates regular candles in definite shape. Lets take a look how it works as follows.

    Basic calculation on henkin ashi.

    This technique utilities upgraded OHLC pattern.

    Figure. 1 henkin pattern looks more unique and creates strong visual impact as compare to normal Candlestick pattern. Its using two types of coloured candle 'white and red'.  Here white colour candle shows uptrend and red colour as a down trend. Because of incorporated highly modified candles gap between two different candles cannot be seen..

    In henkin ashi candles do not leave shadow behind in both up and down trend. Once chart starts loosing strong trend then body of candles becomes shorter and OHLC integrates at a short point.  See in figure.2

    Trading techniques 

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