What Is the Truth Behind Forex Trading and Automated Systems?

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ta is represented by using different  Forex Millennium Review  graphical interpretations such as line charts, bar charts and candlestick charts. Candlestick charts are also known as Japanese candlesticks. They are widely used in practice because they allow traders to work with 'Price Action Theory'. This makes it one of the most effective tools for technical examination. Depending on what sort of a pattern it forms, candlestick charts predict the direction a current pair would possibly move in, with the reversal pattern, in a given time-frame. The two main candlestick patterns which have been followed closely by traders are explained below.

A candlestick is made up of two parts, a shadow and a body. Simply put, a "shadow" is a line representing the value prices have taken over a period of time, however, it excludes the present value of prices. The "body" is the distance between the opening and closing price. If a candle is formed at the end where its shadow is below its body, then the candle will be known as a bullish hammer; meaning that the price would, in all probability move upwards.

On the other hand, a candle that indicates or anticipates a downward movement is called a hanging man. It is formed at the peak where the 'body' is above the 'shadow'. At this point, the candle's price is sealed below its starting price. This point indicates the level at which sellers start trading actively.

Another type of graph connected with a bullish hammer, known as an 'inverted hammer', is one that is formed at the end but has its body below the shadow while the closing price is above the opening price. It signifies that the price is likely to move upward, because buyers have started to enter at that point. n contrast, a bearish hammer which is known as a Shooting Star is one that is formed at the peak. The body is below the shadow and the closing price is usually below the starting price.

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