Using the candlestick chart more or less on its own is simple because the trader is not required to analyze a huge amount of data before making a trade. This is a big advantage in day trading when decisions need to be made quickly.

Frequently a complex system will trip up a trader who becomes impatient with all of the indicators that need to be cross checked. He cuts corners and ends up shorting out his system, resulting in losses. It is common to blame the trader in this situation, but the system can be criticized too. A complicated system is not well suited to forex day trading.

Doji reversal can provide one simple candlestick day trading strategy. A doji is a candle that has no body, because the open and close prices are the same. In fact it does not look like a candle at all, but like a cross.

A doji is commonly a sign of indecision or reversal in the market. In a volatile market without strong trends or identifiable patterns, the doji will be common and not particularly significant.

However, it is during either an upward or a downward trend that the doji can be significant for candlestick day trading strategies. In this situation, the doji is often a sign that a retracement may be about to occur, or even a full reversal of the trend. In an uptrend it means that buyers are losing confidence. In a downtrend, that sellers are losing confidence.

When you see a doji forming in a trending market, it is always worth checking against an oscillator such as the RSI (relative strength index) or MACD (moving average convergence/divergence) to discover whether the price is in the overbought or oversold range. If it is not, then the doji may not be significant. However, if the indicators do imply an overbought or oversold market, a doji can be a signal to get involved.

It is also possible to use the candlestick chart itself for support for the idea of a doji reversal. Check whether it is approximately in line with recent support or resistance bands. The volume of trading in the currency pair may also be significant. The amount of currency traded is likely to be tailing off if a reversal is about to occur. This is a measure taken from candlestick day trading in the stock market that is little used in forex and could provide an edge.

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Candlestick Day Trading: Quick and Easy ForexTrading is a post from: Great Forex World