dx currency trades

The Re-emergence of Candlestick Charting

The Steve Nison book, “Japanese charting techniques,” bought candlestick charting back into the public domain in the 1990s. Currency traders soon started using candlestick charting instead of bar charts for greater insight into market movements.

Why are Candlestick Charts so popular?

1. They complement other Technical Tools

You can use candlestick charts just as you would use the common bar chart, and you can combine them with traditional market indicators.

1. Spotting trend changes

It is easier to spot changing trends using candlesticks rather that line or bar charts.

1. They are easy to use

Candlestick charts use the same open, high, low and close data that traditional bar charts use, and are easy to draw. All charting software has candle charts in it now, saving you the effort of drawing them in yourself.

1. They define market momentums

The way the candlestick chart is drawn not only gives the direction of price, but also the momentum behind the move.

The candlestick chart graphically illustrates the relationship behind the open, high, low, and close by the body - and adds an extra visual edge, due to the way they are drawn.

The candlestick has a wide part, called the “real body.” This real body represents the range between the open and close of that day’s trading.

When filled in black or red, the real body means the close was lower than the open.

If the real body is empty or blue, it means the opposite - the close was higher than the open.

Above and below the real body we see the “wicks” The wicks of the candle show the high and the low of the day’s trading.

If the upper wick on the filled-in body is short, it indicates that the open that day was closer to the high of the day. On the other hand, a short upper wick on a candle body shows the close was near the high.

A Visual Aid to Give You an Edge

Candlestick charts should be used rather than traditional bar charts because they give you an extra visual dimension.

Regardless, of whether you are a day trader, position trader, system trader or a trader who likes to make your own trades, there is really nothing to dislike about candlestick charts!

Easy and fun to use, and providing a greater insight into

Chine announced yesterday that they are relaxing their controls on access to Forex by Chinese corporations and individuals.

BEIJING: China announced a limited relaxation of its forex controls yesterday, just days before President Hu Jintao was scheduled to go to the US on a trip expected to focus on currency and trade issues. The new rules made it easier for banks and other financial institutions to invest overseas, and also increased the amount of foreign currency individuals can hold. “This is a symbolic move ahead of Hu Jintao’s visit to the US,” said Shen Minggao, an economist with Citigroup in Beijing. One of the side effects of China’s rather rigid exchange rate policy is a rapidly expanding foreign exchange reserve. Already the world’s largest, it added another $21.4 billion in March to stand at $875.1bn.

Local banks that qualify will now be able to pool capital from institutions and individuals and buy limited amounts of foreign exchange for investment in fixed-income assets overseas, according to the central bank website.

Domestic fund management firms and securities companies can now invest institutions’ and individuals’ foreign exchange, again in “limited amounts,” in foreign securities, including stock markets, the bank said.

The “limited amounts” that can be invested was not disclosed, but Chinese individuals will now be allowed to freely buy foreign exchange from banks within an annual limit of $20,000.

Previously the limit was set by the length of time an individual spent overseas.

“We’ll continue our reform regarding the exchange rate mechanism proceeding from the national conditions in China and also taking the interests of the rest of the world into consideration,” Deputy Foreign Minister Yang Jiechi said.