One way to increase the profit opportunity is performing a transaction when the potential benefits outweigh the risks. For example, the potential returns three times greater than the risk. Thus the ratio is 3: 1.

See the following table as an example:

In this example, we can see that even though only half of our transactions makes a profit, but we still get a total profit of $ 10,000. Remember that if we are dealing with “risk to reward ratio,” which is good, our opportunity to book profits will be greater.

Basically, trendline and channel also are support and resistance. At the time of down trend, trendline serves as resistance. Conversely, when the uptrend, serves as a support trendline.

Basically, there are two strategies that we can apply based on support and resistance. The first is called “bounce trading”, the second is called “trading breakout”.

Bounce trading

There was also a call as “swing trading”. This trading method utilizes a “reflection” price when the price has reached a support or resistance and bounced from there.

This illustration will explain what is meant by this trading bounce.

Essentially you wait for no reflection on the area of support or resistance for trading. Why not conduct a proper sell at resistance or buy right on support? Because you need some kind of confirmation that the support or resistance is not translucent. It could be the price movement up or down so sharply and quickly to the right through the support or resistance. Well, sort of reflection that is the sign that the level of support or resistance is still strong.

Breakout trading

In the world of trading, the support and resistance will not last forever. At one time these levels will definitely be translucent. At such times you can still try to find opportunities with a strategy called breakout trading. Breakout trading strategy is one hundred percent different from a trading bounce. If the trading bounce you wait to buy or sell, on a breakout strategy you instead utilize support and resistance break with the assumption that the break of support or resistance tends to be followed by a rally.

The illustration below depicts breakout trading strategy by utilizing the break of support or resistance.

The strategy described above is an aggressive strategy, in which the transactions are performed immediately after getting confirmation break of support or resistance level. Yep, once again the confirmation needed to take action.

A support or resistance is considered transparent if it meets at least one of the following two things:

1. If you are using a candlestick chart, then the body of the candlestick should be cut / pierce support or resistance line.
2. At the time of the breakout, an increase in volume. The more significant improvement, then it is considered more valid breakout.

It had been a breakout trading strategy that is aggressive. But there are traders who choose to wait for further confirmation. Confirmation confirmation again … again … maybe that’s what you are thinking now. Get used to it, because you will repeats these words throughout your trip jungle go through this challenging trading.

Class of traders who do not aggressively implemented a breakout strategy is rather conservative. To be easier, we call it conservative breakout strategy. How does this conservative strategy?

This conservative strategy actually merges breakout and bounce trading strategy. Here’s the story. …

When the breakout has been confirmed, you do not immediately take a position to buy or sell a breakout strategy as aggressive, but you wait occurs “pullback” back to the area of support or resistance. After the pullback, you wait longer occurs reflection of the level of support or resistance. Only then you perform a transaction to buy or sell.

Complicated huh? Actually, not really. Make it easier to understand, we have prepared an illustration to describe this strategy.

Good strategy breakout aggressive or conservative has its own advantages and disadvantages. If you use a breakout strategy is aggressive, your benefits are immediate entry and you can not miss “moments”. But of course, this strategy has its drawbacks. Suppose that you have a sell immediately when support breaks, but in fact, prices rose again and was back into the support earlier.

Conservative strategy has the advantage in that regard. By using this strategy, you’re likely to get caught is smaller as you wait for a pullback ahead and seek confirmation of reflection. But keep in mind also that the pullback NOT ALWAYS HAPPEN after the breakout. This is where the weakness of the conservative strategy, ie you will potentially lose the opportunity to entry because it was already running.

Every trader has a different style. You can decide whether you are going to be the aggressive or the Conservatives. For the patient, a conservative strategy might be appropriate for you to apply. However if you are a private agile and like the challenge, may be more appropriate to use an aggressive strategy. Please select according to your personality.

Every trader in whose name the trading should have a trading plan. There is a phrase that says “if you do not have a plan then you plan to fail”. This might sound corny but when you are trading forex you will definitely believe.

A successful trader has a trading plan that begins with the general picture and then implements them in a rule referenced in the transaction. In addition, it is also no less important is make a record or journal of trading you do. By having a journal or record it will help you later on in evaluating your trading plan. Here are some guidelines that you can follow in the learning process to develop a forex trading plan:

1. Expectations / Hope

Why did you decide to jump in forex trading and what do you expect from this trade? With this build from beginning it will help to make your trading on track, and ward off disappointment.
2. Plan Risks

Previous decide how much capital you want to use for trading, of course, these funds will not disturb your household finances or crude language parking fund. Probably sounds corny, but psychologically it will greatly affect your mental, other than that specified how big your target. Do not even once risking more than you can bear, you should not feel the trauma or despair when you experience loss, to try to identify the risk you are prepared to the liability of any transaction that you make at the beginning. In the sense that once you get a position at that time you already know how much risk you are prepared to bear.
3. Goal / Target

Set a reasonable goal of any profit you want to earn in a certain period, it should be based on the strategy that you use and the target is also calculated based on the daily periods to those that include day traders, weekly period to those that include swing trader and period monthly for those who like scalping.
4. Strategy

Make detailed rules of strategy you use, the time frame you use, the indicators that you use as a trigger or triggers and indicators to be used to confirm the required before you enter a position if signals a Buy or Sell, you must also specify in detail under what conditions you exit or close a position, when to take profit or stop loss set.
5. Evaluation

This is the last step of the important but often overlooked or not done by many traders, to evaluate your trades in advance will make your trading will be more developed. By evaluating trading transactions are carried out before then you’ll know whether in accordance with the trading plan as well as your target and also to review the loss of your trading and find out what causes it.

If you apply trading recklessly, then the results will reflect your trading. Trading plan used to base your trading success in the future

Let’s take a closer look, four factors affecting the change of currency rate movement.

Capital market

The capital market is the most visible indicator of a country’s economic health related. Strengthening or the fall in the stock market of the country is usually the economic signals in the eyes of investors.

Forex traders rely heavily on economic data that in many cases the same economic data will have an influence on market movements.

International trade

The level of trade between countries representing a request for goods or services of a country. The higher the demand will typically have an impact on strengthening the country’s currency. Example: to buy goods from Australia, an importer who came from outside Australia should convert their currency into Australian dollars (AUD). It will also increase the demand for the AUD, so it will give effect to the strengthening of the AUD.

Surplus and deficit balance of trade is an example of economic data of a country in terms of international trade. If the surplus increases – or decreases the deficit – then the country’s currency will usually be strengthened. Conversely, if the reduced surplus – or deficit increases – it is usually the country’s currency will weaken.

Political conditions

The political situation of a country also plays a major role in the country’s economic prospects and will have an impact on its currency. Forex traders will continue to monitor the news and political events to gauge the economy associated with currency.

An election is a great event for the currency. The exchange rate strengthened if the parties have a program and a good influence for the economy came out as the winner of the election. In short, if the election winner is the one who “converted” by the market, then the country’s currency will strengthen.

The fiscal and monetary policy of the government is the most important factor in economic decision making. The central bank’s decision on interest rates that the sharp impact also affects the forex market.

Economic reports

Report economic calendar is very important when prices move fast in the market. The report on the GDP (Gross Domestic Product) or GDP (Gross Domestic Product) is perhaps the most obvious economic data because it is the basis of a country’s economic strength.

Inflation is also a very important indicator because it is an indication of an increase in prices and purchasing power. However, inflation is a double-edged sword where often there is pressure on the currency when purchasing power declines. On the other hand, it can also lead to currency appreciation because it may force the central bank to raise interest rates in order to control inflation.

Other reports such as the employment sector also carry important information about the economic power of a country. One sector data jobs

‘Panic selling occurs when the price goes down rapidly at high volume. This often occurs when some market participants log on to neutralize the movement, or when the trader is taking a sell position to force prices down far enough.

Panic selling process happens because there is a tremendous opportunity when traders were taking long positions, and make prices move down sharply mainly occurs when the fundamental statement that smacks of speculative (such as economic news or opinion of the analyst).

Here, we will explain the process of panic selling that can help you to predict the right time to take long positions after a phase of panic selling occurs.

Process

Panic selling occurs in several stages. The figure below illustrates a scenario of panic selling as happens when the data was released.

Let’s discuss what happens at each step in the chart:

Step 1 – Something happened that caused prices to move rapidly decreases with higher volume.

Step 2 – The high volume occurs when buyers and sellers into the market to control the trend. The winner of that process then takes the trend to low volume.

Step 3 – If there is no significant trend change that occurred at a point 2 to perform the movement of the resumption, then usually there is another point to the high volume in which the movement of substantial reversal may occur.

Step 4 – This process will continue until the trend moves upwards, confirmed by technical factors or fundamental.

Now we will see how we can predict when a trend change will occur.

Selling Moment

Moment of selling will stop when the price has reached a support level. This can be seen by using a combination of trend indicators, volume by taking into account the trend has changed. There are various indicators that can be used to confirm that the trend has changed.

As a trader, you can choose how many indicators to confirm the trend liking. The fewer confirmation indicators are used, the higher the risk and the higher the rewards will be (in the sense that, the longer you wait to be confirmed, the potential benefits will be reduced).

Rules for using the moment of selling are as follows:

1. The first price should decrease rapidly with high volume
2. The volume will spike, make a new low, and appears to reverse the trend. Look for candlestick patterns that indicate a battle between buyers and sellers (engulfing).
3. Price wave higher low to be seen, this is the moment of opening a buy position.
4. A sideways movement in the area below the trendline would happen.
5. Moving averages with 40 and / or 50 days to be penetrated by the price.
6. Note that you can use moving averages by connecting the highs or lows. Typically, the period of sideways from a larger moving average will indicate when a sideways moving average with a smaller trend.

Conclusion

Panic selling naturally creates the opportunity for traders to open long positions with a lot greater benefit. Those who know when it will happen panic selling will potentially benefit more from phase retracements or price movements that occur after that.

The forex market offers many opportunities that can be taken to make profits in forex trading. But to be successful, you have to know beforehand advantages and weaknesses. Most forex tutorial teaching only “The right way for trading”. And this is not entirely true. As an adult, you will be hard to change your style of trading, while the market is changing all the time. Therefore, it is much easier to find a trading technique that fits your personality rather than trying to adjust to the way trading other people who may be “expert trader”. Forex tutorial article will discuss how to find your style of trading.
Trading strategy

So why fishing and skiing downhill so important? Believe it or not, this is the question of trends and counter trends in trading. Anglers are the trend, skier likened contrarian trend. Trader trends, they are like anglers bait several times before finally getting the fish. On the other hand, downhill skiers, seeking the sensation of speed before he reached the end goal. If the note is similar to profit as soon as possible because the currency price movements are fast. Does fishing always lead to trends and ski bucking the trend? Of course not. However, the activity you choose certainly reflect your trading style.
Time Frame
The second most important question is whether you are more comfortable using the time frame for the short-term or long-term? Generally, traders who trade based on the trend would choose a longer time frame for developing trends in forex trading by months rather than days. While that prefers to use a fast changing market sentiment will operate on a shorter time frame.

Typically, the short time frame that is effectively used is the hourly chart with a target average profit / risk of at least 30 points, due to the nature of the market that spreads led to a smaller time frame less effective. For example, the pair EUR / USD, which is the most liquid instrument in the world and usually widespread bid and ask ya 3 points. A trader with a profit target of 10 points should get 13 points profit (10 points + 3 points spread), but sometimes he just gets 7 points only (10 points – 3-point spread). This is what causes many traders think negatively because of the difficulty of finding profits in short time frames.
Analysis Type

Once you determine the best time frames, the next question is: what kind of analysis you will use to trade forex? There are currently a lot of debate between fundamentalists and technically
Fundamentalists mock technical attempts to forecast future price movements by looking at the current price movement on the chart. Proponents of fundamental analysis technical analysis consider such ancient rituals forecast the future of the stomach contents of dead animals. News, economic reports and comments from monetary officials is the main tool fundamentalists. Technically ignore the data as something sad and contradictory, they believe the market response in addressing the news will be reflected in the price movement before and will be a guide to future price movements.

Which one will be the winner? None. Trading in terms of technical or fundamental only as figments, like boxing in the race for the world title with one hand tied behind my back. Fundamentalists can talk, due to the global demand for oil will push crude prices to $ 100 / bbl and they buy the Canadian dollar as the greenback, but when seen in near-term chart of USD / CAD looks oversold, then it is likely they will lose money

– even when a few moments later turned out they were right analysis. Conversely, technically  use Fibonacci numbers to determine benchmark prices suddenly no economic news makes the market turmoil, the level of resistance that has been made will be torn down as traders tried to cover their positions.
Fundamental to Long term, Technical for short term

You need to remember, that the fundamental factors tend to have a strong impact on long-term trade, while the technical aspects will be a strong impact on short-term trading. For the long term will usually respond to economic news as GDP growth, interest rates, and other economic factors.

For example, we see the movement of GBP / USD in 2005 in the image above. At that time the Federal Reserve Bank of New York was raising interest rates by 200 basis points from 2.25% to 4.25%, while the Bank of England, which was at that time the UK is experiencing a slowing economy and depressed consumer sentiment, choose lower interest rates from 4.75% to 4.5%. The difference in interest between the two currencies converted to almost 0% (at the beginning of 2006, has reached 0%). Traders who trade long term and short term are equally benefited for GBP / USD decline.

This pattern is similar to the movement of the USD / JPY but reversed. USD moving while the Japanese Yen remained 0%, this has led to traders taking positions with the hope of profit 20% in a matter of months. In 2006, analysts predict that the US tightening cycle coming to an end while Japan is just starting, traders responded immediately so that they can benefit substantial and analysis that they made proved to be correct.

From the above events, we can see that the fundamental factors have an effect in the long term, while technical analysis reacts within a shorter period of time. Perhaps one of the reasons why this happens is that the smaller time frame news information was not considered significant, therefore, prices tend to move to areas of support and resistance. For example, as shown in the picture hourly chart EUR / USD below, note the area swing high and swing low of, traders can install Sell position when prices were resistance and Buy at support area to benefit.

NOTE: This article Forex Tutorial:

Whether you are a long term trader or technical fundamentalist short term, the forex market can all accommodate your style. Despite the disagreement between the two is never resolved, but the undeniable truth is that you have to use a style that best suits your personality. If not, you are not likely to succeed. Therefore, the first question for the novice forex trader is not “What if the price going up or down?” But “Trader whether I have”.

Now we will try to understand and recognize what “support” and “resistance” in Forex

Perhaps you still remember the concept of supply and demand (supply and demand)? When a request (demand) increased and supply (supply) down, then prices will go up. Conversely, if the offer (supply) rises and the demand (demand) down, prices will drop. That said economics teacher during junior high.

Well, in fact, the price of the currency in the market is always moving up and down. It is also influenced by supply and demand on the currency. Then, there was a time in the market where the price stops moving up or moving down stops. This is certainly due to demand or supply it is not large enough to cause prices to rise or fall.

In technical analysis, we can anticipate roughly when supply or demand increases. The trick is to identify support and resistance level that was.

Support is an area where the price level at that level DEMAND large enough to withstand the decline in prices. At this level, the price tends to stop moving down and likely to rise again. Practical language, the support level is expected to hold its bearish movement.

While resistance is an area in which the price level at that level SUPPLY large enough to stop the rise in prices. At this level, the price tends to stop moving up and will likely fall again. Practical language, the resistance level is expected to hold its bullish movement.

Now let us look at the following picture:

The above example shows the line zig-zag form graph moving upwards. When the price goes up and then down again, then the highest point reached before descending again that’s called resistance.

When the price moves up again, the lowest point reached before the price goes up again that we refer to as support. That’s how we determine the support and resistance levels in line with price movements up and down all the time.

Please also note that the level of support and resistance is not necessarily a definite level. That is only natural that some traders disputing some of the numbers when determining support and resistance. Importantly, the support and the resistance is in the range of numbers that are not too far away.

Resistance becomes support, support becomes resistance

Do not be confused. Indeed the case. Here’s the story …

Although at the beginning of the discussion of support and resistance is said that these levels were able to “hold back” the rate of price movement, but it does not mean that these levels will last forever. A support will no longer be able to withstand the downward movement if it turns on when the demand is no longer big enough. In contrast, the same thing will happen to the resistance, in which the supply is no longer large enough to withstand the upward movement.

Imagine you are standing in regards to a room. There are a floor and ceiling. Ceiling our analogy as resistance, while our analogy as a support floor. In your hands, there is a golf ball. You throw the golf ball up to touch the ceiling. If your throw is not strong enough, then the golf ball will bounce again downward.

For a novice trader, if you follow the example of another trader or trading following the way of other people who you think is more senior than you. It was not wrong, but do not ever follow the advice of others implicitly.

Each trader can have different views on the market. Similarly, the way of thinking, risk tolerance, and a target, of course, different too. Just because someone has a trading method that they can do well and be successful, not necessarily the method is also suitable for you. In other words, doesn’t mean you can run a trading method is well and successfully too.

Have your own trading plan, which according to your character as a trader, and constantly updating its line with experience you learn the market. A wise man said: “If you fail to plan, then you have already planned to fail.”

Build a trading plan and run it well is closely associated with the discipline. But discipline is not enough. True, it is not enough. You have to have a super strict discipline. Yes, super tight! Has a super tight discipline is the most important characters of a successful trader.

Super strict discipline that you need to run a trading plan that you wake up earlier. The trading plan itself is a guide on what you should do, why, when and how you will do it. The trading plan covers your personality as a trader, personal goals, risk management and trading systems will apply.

If you are running a trading plan with discipline super tight, then you will be able to minimize errors that occurred in the trading and by itself would minimize the risk (note the word “minimize”. We did not use the word “eliminate”). Your emotions will usually dominate yourself when your money is in jeopardy. Often people will make irrational decisions in moments like that. A good trader is not allowed to make decisions that are irrational. Trading plan was good (and super tight discipline) will keep you from making a bad decision in difficult times.

With a good trading plan, every decision that comes out has-considered, so that you will avoid making rash decisions in a difficult situation. All you need to do is keep to the original plan, the trading plan. There is a sentence in English that can be described easily: “Stick to the plan!”

Why You Need a Trading Plan?

It was mentioned earlier that the trading plan will protect you from making rash decisions. In addition, the trading plan will make your trading much simpler than if you did not discount trading plan.

Have you used Google Map facility? With Google Maps, you can find out the location of a place. If you want to travel to these places, you can simply enter your current location or enter your destination. Then Google Map will give you the best route and directions to get to the location of your destination.  You need to follow the direction so that you can minimize the risk of getting lost.

Your trading plan works similar route and directions were given the Google Map. He will show you where you are now and helps you to achieve your goal as a trader, namely a consistent profit.

Trading without a trading plan is almost as bad as traveling without knowing the direction and the destination location. Your goal is to reach trading consistent profit, but it is nonsense if you do not know how to achieve that goal. As a result, instead of obtaining a consistent profit, you are consistently destroying your trading account.

With the trading plan, you’ll know what you should do. You will soon know if it turns out you’re walking in the wrong direction. You will have a standard to measure your trading performance. You will always know what to do if you turned out to be ” the wrong direction”.

The trading plan also will help reduce the potential stress and emotional trading. Can heck, trading without a trading plan, but your trading style will be haphazard. Buy and sell signals based only on instinct or unclear. It does not trade name. That is tantamount to gambling.

Having a trading plan is no absolute guarantee that you will succeed. But at least, to have a trading plan you will be able to evaluate what is wrong with your trading if you fail.

In fact, due to failure in trading because they do not have a trading plan or execute a trading plan properly. This is the fact.

The majority of novice traders do not have a trading plan. Through this program, you will try to be a minority that can actually survive in the world of trading.

Know Your Character

The first step to that is needed to build a trading plan is to recognize your own character. Basic trading plan you are your own character because it is you who will run the trading plan. By knowing your personal character, then you will know what kind of trader you this. It is called the trader profile.

If you already know your profile as a trader, you will be able to know what kind of trading method that fits your character. Strategies, systems, or methods that do not fit with the character you would reduce your chances for success.

Set Objectives

Set your goals as a trader. It would be better if you also have a certain motivation that could spur the spirit and strengthen your commitment. A person will not be successful as a trader if he is a serious commitment. He will quickly crush by the market.

Remember that your goal was trading course is to obtain a consistent profit. If your goals are trading just for fun to test your nerve, then the goal will not be able to walk together with the aim to achieve the consistent profit. At any given moment you may be enjoying periods of stressful when your transaction is swayed by the market. But believe me, you will be hard to be able to show “the face of fun” when your account following market collapsed. If indeed “a fun test your nerve” that you are looking for, please do “recreational” a kind of bungee jumping or parachuting, instead of trading.

Set Target

We recommend that you set your profit targets with explicit and specific numbers. For example, $ 100 per day, $ 1,000 per month, 20% per month, 50% per month and so on. Clear targets, in turn, will help you determine which strategy you want to apply. You will be able to evaluate your trading development, whether improved or otherwise.

Risk Capital

The trading world is a harsh world. Losses for the sake of losses will probably hit you. That’s why you need to set risk limits. The term is risk capital.

Risk capital is the amount of money in case of “lost” you are still going to feel fine. If in the course of your trading experience loss, the risk capital is the first time will leave your account. So, even though the money is gone, you will not lose your home and your family will be fine. Thus, the magnitude of this risk capital should be according to your ability.

Therefore, do not trade with money that was initially to be used to pay bills or pay for the purposes of everyday life. Imagine if the money is gone because you lose money trading, might you not eat later.

Define Strategy

This strategy related to risk management, money management, and trading systems. In the previous chapter, you’ve learned about this trading system. Well, in the next chapter you will learn about money management and risk management so that your trading system can balance with the power of your capital.

For example, in a trading strategy set amount of funds used each time a transaction, the amount of risk for each transaction, the target to be achieved and what trading signal is used.

To trade in forex trading, you have to find the right time to enter or exit a position. Additionally, you must have a mental “steady” when the price target has not been achieved as desired.

You need discipline because it is key to gain Profit in Trading

Impulse is a system designed by Dr. Alexander Elder to be able to identify the appropriate entry point with momentum. Indicators that can measure the momentum in the market will be strong capital for traders.

How to open position

One indicator that can identify market is an indicator of the exponential moving average (EMA)

This indicator serves as a tool to determine the uptrend and downtrend. When EMA appears to rise, then the price will potentially bullish, and when EMA looks down, then the price will move looks bearish.

To measure market momentum, traders can use the histogram moving average convergence divergence (MACD), which is an oscillator that can display the rate of change in the movement of bull and bear. When the slope of MACD histogram rises, then the price will be bullish. When the MACD falls, then the price will move bearish.

This system will issue an open position signal when both indicators move in the same direction.

If the signal from the EMA and MACD histogram moving in the same direction tend to provide the information that the price is moving in an uptrend or downtrend. When the indicator EMA and MACD histogram is moving upwards, then the bullish trend will have a control on the trend, and the uptrend will accelerate. Conversely, when the indicator EMA and MACD histogram falls, then the bearish trend is in control and the downtrend will dominate the market.

The principles above is one way to identify points of open positions on the trade. If the period that you use are on the daily chart, then you should be able to analyze the weekly chart to determine the bullish or bearish. To determine the long-term trend in the market, you can use the 26 EMA on the weekly chart and MACD histogram on the weekly chart.

Having acquired long-term trend, then you can use daily charts you use to follow the direction of trade are visible on the weekly chart.

By using the 13 EMA on the daily charts and MACD histogram 12,26,9, prices will potentially give the signal for the open position.

When the weekly trend is rising, and the signal will be seen in the open position 13 EMA and MACD histogram that appears and gave a buy signal is strong enough and the opportunity you to open a buy position.

Conversely, when the weekly trend is moving down, wait 13 EMA indicator on the daily charts and MACD histogram gives a bearish signal. Momentum like this would be a strong signal to open short positions, and you have to close short positions when the sell signal is lost.

How to Close Positions

Doing forex trading by finding the right moment to open a position when the market is moving is an absolute requirement. As we know that prices move in trends on a weekly walk, and the best movement is the movement which regularly shows the trend of Intra – day strong enough.

As mentioned earlier, once you can identify and open trading positions with a strong enough momentum (daily EMA and MACD histogram are both moving up or down).

You must have the momentum right out of your open positions. Daily MACD histogram is usually (but not always) will give a signal, when the momentum is reversed and started to weaken then the moment to give the information that the positions that are currently open are likely to be shut down. Exit signal will go out when these two indicators move in opposite.

When the weekly trend is moving down and the daily EMA and daily MACD histogram falls, it’s time for you need to get out of long positions that have been opened in advance up to one indicator stops issuing a sell signal.

Exit point requires swift action and the exact moment when a trend is identified apparently soon be nearing an end.

Steve Nison popularizing the candlestick chart in America. One pattern is the tweezers candlestick introduced below (bottom) and the tweezer (top). Tweezer can be seen with different forms, but all have some common traits. This pattern sometimes appears at the turning point of the price movement.

In trading, candlestick charts can be used for analysis may indicate that there is a potential reversal of the direction or can be used in a wider context of market analysis to provide trading signals for a subsequent trend movements.

The Japanese have been using candlestick charts for commodity trade since the 17th century because they can see visually to monitor price movements.

Tweezer candlestick is formed with a body that is visible from the difference between the opening and closing price. If there is a “shadow” on the tweezer at both ends of the candle will be characterized by high and low prices in the period. Candle black or red means closing price close to the bottom, while the white or green candle shows the closing price closed in an upward direction and higher than the opening.

Tweezer usually located above and below, have a pattern – a pattern that indicates a reversal of the trend despite the broader context of an additional candle is usually needed to confirm the signal.

tweezers + tops

Tweezer above pattern often occurs when there are two tallest candle is almost exactly at the same level. Pattern tweezer under occurs when there are two candle lows that occurred at almost the same level after a decline.

Other additional criteria, usually the first candle has a great body (viewed from the opening and closing price differences) but the second candle can be almost the same size.

tweezers + bottoms

For example, in a pattern Tweezer above, the first candlestick candle possibility is very strong, with a high closing price, while the second may be a doji candle (cross-shaped).

Patterns tweezer tweezer top or bottom pattern indicates that the first candle is in a strong movement, while the second candle is a candle instead which reverses previous movement which has been a shift in momentum in the short term, and traders should know him.

Bearish Tweezer Top

A Tweezer Top bearish occurs when movement has formed a bullish candle is higher, and the closing price is close to the highest price (a bullish sign). But in the second candle, a candle with a reversal pattern.

Tweezer Bottom Bullish

Conversely, a bearish tweezer bottom occurs during the downward move when the market is bearish and the price continues to move lower, and usually near the candle closed at the lowest price (a bearish sign). But in the second candle, a candle with a reversal pattern.

Note:

Candle usually formed body with an equally high or low (this is very important).This formation is the continued downturn or continuation of price movement.
Formation tweezer tops tend to form with two or more candles.
Formations better addition is the doji or hammer that makes a second peak that will add a signal that confirms that there is a shift in market movement

Tweezer is a formation that is used by the forex trader or investor to know the price action movement of prices tend to follow technical patterns of the previous movement. This will create areas of support and resistance that will continue to be tested and continue to be tested. Strict discipline and risk management rules will help setup enhances the ability of traders to transact.