Currency trading can be very frustrating. Especially when a deal is entered and the price bounces around between the stop and the target for a long time before it finally chooses a direction. Hopefully this direction is the one where you target is. That is why long candle forex trading has become such a popular Forex trading approach.
A long candle is a result of a quick and strong price movement in the currency market resulting in one big price movement in a definite direction. The advantage of catching this type of move is that the positive result is known very quickly and therefore is much kinder on the trading nerves. The long candle currency trading approach is a much less anxious way to trade because of that.
When talking about long candle forex trading moves we are of course referring to Japanese candle sticks. The currency trading information obtained from every candle is its high price, its low price, the price at the start of the trading period and the closing price. The colour of the candle gives a great visual indication of the direction of price movement. A Candle with a big difference between the opening price or its high and its closing price would be regarded as a long candle.
So how do you trade these particular candles and use this currency trading approach. A quick study of history will give us lots of clues when they have happened in the past which will then give us a good idea when they are likely to happen again.
In general they happen in the following circumstances:
Firstly, when economic announcements of economic dates are made and the results differ from the market expectation the price can move very quickly and quite far in a short time. This movement results in a long candle.
Secondly, when major markets open new liquidity and higher volumes enter the market. These higher trading activities can often drive trends that result in quick and strong price movements. Again these quick and strong market opening moves result in long candles.
Thirdly, when the price moves through major support or resistance many orders are activated as traders often putt both their stops and the entries on the other side support and resistance. These orders often trade the same way. Forex example when support is violated both the stops and entries below support can be sell orders driving the price even lower and adding to the speed of the downward movement.
The above times represent eighty percent of the times long candle forex trading moves occur. There are others such as bounces off support and resistance, forex market intervention, weekend gaps and many more using this Forex trading approach. If you focus on the three major times when forex long candle can occur you will catch most of them and improve your Forex trading results, be less nervous when trading and have much more fun when forex trading.
Give long candle forex trading approach a try
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