My background is stock trading, and a huge part of my plan revolves around candlesticks, but I’ve decided I want to try forex out…
I’ve read that candlesticks are less useful in FOREX for a number of reasons (some legitimate like the fact there aren’t really gaps in forex) but before I reach a conclusion I’d like to hear others input.
Does anyone here use candles for FOREX? If so, what has your experience been, such as what signals work and dont work etc? Any thoughts would be appreciated.
edit: I’m guessing this has all been discussed before on this forum, does anyone have links to similar topics so I don’t waste space on the forums?
Yep, basically because Forex doesn’t have gaps, you have one less form of confirmation than you do in the stock market. Forex also lacks accurate volume data by nature. However, none of that matters because candlesticks are still ridiculously powerful and can almost be used by themselves (with S/R levels). They are the prime focus for my system (+S/R and a single long-term EMA line).
Candlesticks are very useful and central to my trading strategy and I am an intra-day trader. I think it helps with getting the ‘feel’ for your preferred pair as well.
Like any other market or study, longer term charts remain more accurate than shorter term charts. I specifically find useful the piercing patterns, hammers and cloud cover. Others may find more formations helpful. As mentioned in the first post, gaping patterns are non existent in FX.
I make use of candlestick patterns, but I do not trade directly off of them. Rather I just look to see how the market is reacting and then plan my trade accordingly. I’ve seen enough reversal patterns fail miserably to think it’s worth betting on simply for the patterns themselves.
well since you’re obviously experienced with risk management, there’s no reason why studying candlestick interactions with support/resistance levels shouldn’t lead you to profitability.
you are missing the gaps, but that 24h liquidity can help save you from large slippage costs on those gaps, so you gotta take the bad with the good i suppose
edit:
i wouldn’t worry about asking questions here, i don’t know why some people make a big deal about repeated topics. if you enjoy trading, you should be able to talk about it all day in my opinion. and sometimes each persons situation is different and needs a slightly different answer, like you have stock experience, the last thread might not have applied to you as well.