Trade Forex Trading

Learn Forex Trading

Japanes Forex Candlesticks Patterns Explained

Brief History

Candlesticks were developed in the 18th century by the legendary rice trader called Homma Munehisa to give an overview of opening, high, low and closing market price over a given period of time.


They were used by the legendary rice trader to predict future market prices. After dominating the rice market, Munehisa eventually moved to the Tokyo exchanges where he gained a huge fortune using this analysis. He is said to have made over 100 consecutive winning trades.


Types of Forex charts

There are 3 types of charts used in Forex: Line, bar and candlesticks .


Line - plots a continuous line connecting closing prices of a currency pair.

Line Chart in Forex Trading


Bars - displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW & CLOSE. The Opening price is displayed as a horizontal dash on the left and closing price as a horizontal dash on the right.

Bar Chart in Forex Trading


The main disadvantage of a bars is that it is not visually appealing, therefore most currency traders don't use them.


Candlesticks - these use the same price data as bar charts (open, high, low, and close). However, they in a much more visually identifiable way which resembles a candle with wicks on both ends.


How to Interpret

The rectangle part is called the body.

The high and low are described as shadows and plotted as poking lines.

Trading Forex Candlesticks Chart Patterns

Regulated Forex Broker

Takes 4 to 6 weeks to open an account, open early: Read The Article "Account Opening Procedure"

Choose the Best Forex Broker: Read The Article "Best Forex Broker"

Up To $6.67 Dollars Bonus for Every Lot Traded Get Up To $6.67 For Every Lot Traded


The color is either blue or red

  • (Blue or Green Color) - Prices moved up
  • (Red Color) - Prices moved down


Most trading platforms like the MetaTrader 4, use colors to mark the direction. colors used are blue or green; when price moves up, red; when price moves down.


Forex Candlestick Vs. Bar Charts

Candlesticks Vs. Bars


When candlesticks are used it is very easy to see if the price moved up or down as opposed to when a bars are used.


The Japanese techniques also have very many formations that are used to trade the Foreign Exchange market. These patterns have different technical analysis interpretation and the most common are:

Marubozu & Doji
Spinning Tops
Reversal Patterns
Inverted Hammer & Shooting Star
Piercing Line & Dark Cloud Cover
Morning Star & Evening Star


The above patterns is what makes the Japanese candlesticks popular among technical traders and it is why this type of analysis are the most widely used when it comes to analyzing the currency exchange market. The analysis for these pattern formations in Forex trading is the same as that one used in stocks trading.


Drawing These Charts on MetaTrader 4 Platform

To draw these on the MetaTrader 4, select the charts drawing tools within the "MetaTrader 4 Toolbar" - shown below.


MetaTrader 4 Line, Bar, Candlestick Chart Drawing Tool Bar


To view this toolbar on MetaTrader 4 go to "View" Next to file at the top left corner of the MetaTrader 4 Platform, Click "View", Then Click "Toolbars", Then check the "Charts" Button. The above toolbar will appear.


Once the above toolbar, appears you can then select the type you want to convert to, If you want to view using the bar format, click the bar tool button as shown above, for line format click the line tool button, for Japanese candlesticks format click the "candlesticks tool button".

Up To $6.67 Dollars Bonus for Every Lot Traded Get Up To $6.67 For Every Lot Traded

Market Outlook: Very Bullish for EURUSD, and EURJPY - Also for GBPUSD, GBPJPY, and AUDUSD (No Need For Technical Analysis - This is Risk Appetite -Risk Averse Speculation).

Do Not Be Left by This Opportunity: Open an account and start buying Euros and position yourself early - Risk appetite speculation has already started. - Others are already profiting - Read the article How to Fast Track Account Opening and Open an account now.

Strategy: Buy the retracements and use 1 Hour and M15 Charts to look for best entry and exit points - Also checkout Money Management Rules.

Poland FX Seminar Gala

XM Account Holders Attend Poland FX Seminar

Malaysia Seminar

XM Account Holders Phillipines Seminar

XM Account Holders Thailand Seminar

Malaysia Forex Seminar

Hungary Forex Seminar

Greece Forex Seminar

XM Account Holders Hungary Seminar

XM Account Holders Thailand Seminar

European Forex Broker XM is Licensed and Regulated in 12 Countries; 10 European Countries, Australia and UK

XM Forex Broker Regulation Licenses

Should you open an XM Account this is exactly how it looks like:

Forex Account Secure Clients' Area - Trader Cabinet

Up To $6.67 Dollars Bonus for Every Lot Traded

Loyalty Bonus Points - Up To $6.67 Dollars Bonus For Every Lot Traded

Bonus Points

Forex Trading Accounts Members Area - Withdraw and Deposit Options

Real Forex Trading Account Withdraw and Deposit Options

XMP Forex Loyalty Bonus Program

Silver and Gold Online Trading

CFDs Trading and Forex Trading

50% and 20% Bonus

$5,000 Forex Bonus

Bonus Points

Regulated Broker