The issue of candlestick patterns which originated from Japan has caused a lot of controversies in the forex market because not all of them can be applied to the spot foreign exchange market. With the charts appearing with no gaps between the candles and no definite daily open/close levels, the traditional candlestick patterns has a less application in forex trades.
The forex candlestick cheat sheets summarizes the candlestick patterns as they present themselves in Forex trading. This forex candlestick cheat sheet omits some of the famous ones which also works well in equities but do not usually do well in currencies and also provides slight modifications of other patterns to perfectly fit into trading perspective of the currency.
The Forex candlestick cheat sheet provides a quick reference for about 26 candle patterns, namely; Basic Doji, Basic Star, Bearish Engulfing, Bearish Harami, Bearish Spinning Top, Bearish Three Line Strike, Bullish Engulfing, Bullish Harami, Bullish Spinning Top, Bullish Three Line Strike, Dragonfly Doji, Evening Star, Gravestone Doji, Hammer, Hanging Man, Inverted Hammer, Morning Star, Shooting Star, Thee Outside Up, Three Black Crows, Three Inside Down, Three Inside Up, Three Outside Down, Three White Soldiers, Tweezers Bottom, and Tweezers Top.
When trading with the forex candlestick cheat sheets, it is of paramount importance that you take the context of the pattern into due consideration. A preceding downtrend is required for the bullish reversal patterns while a preceding uptrend is required for the bearish reversal patterns.
Before a very good result can be obtained from the forex market cheat sheets, a very good and careful study is required since the cheat sheet is composed of several chart patterns aimed at studying the market trend. The combination of the different chart patterns makes the market analysis easy to carry out at a glance.
BENEFITS OF STUDYING THE FOREX MARKET CHEAT SHEETS
- MARKET ANALYSIS
The forex candlestick cheat sheet is very important in carrying out market analysis since it mostly deals with the different chart patterns present in the market. By analyzing the different candlestick chart patterns in the market, the trader has the rare opportunity of looking at the latest trend in the market at a glance without having to study a lot of chart patterns individually.
- TESTING TRADING STRATEGIES
Market strategies can be tested by studying the forex candlestick cheat sheets. The charts will reveal if the market is experiencing an uptrend or downtrend at the moment of study.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.