Bar Chart (Candle stick)
This is actually commonly refer to candle stick in the trading community. Invented by a Japanese rice trading in the 18th century. Every bar consists of a body and with upper and lower wick. The body can be of any 2 colours which will depend on the open and close price. The upper wick will extend to the highest price and lower wick will extend to the lowest price. By simply looking at the bar or candle stick, you can tell if the trend is rising or dropping.
Buy Trade
If you find close price higher then open price, this indicate a trend to go higher. If you find a long upper wick and a short lower wick, this indicates a lot of support to go higher. Look into smaller timeframe to see the smaller bars to see if the price is trending up. If the above 3 stand true, you will have a buy trade.
Sell Trade
If you find close price lower then open price, this indicate a trend to go lower. If you find a long lower wick and a short upper wick, this indicates a lot of resistance to go lower. Look into smaller timeframe to see the smaller bars, if you find similar and trend going down, will all above 3 same, you will have a sell trade.
Which Time Frame Charting?
In most cases, I will look at H4 timeframe to get a feel of the currency market trend as it roughly divides the trading cycle into 6 slots which gives a very good visual of the days trades and weekly general direction.Then I will zoom into the 15 or 5 minutes time frame. The reason I choose this is a good guage of any trend to start forming within 1 hour, especially the opening and closing and cross of different finances market through out the days.
Body Vs Wick
A tall or fat body will be favourable over short or thin body. A longer wick is favourable over a shorter wick. By comparing the difference, you can find very favourable trades when the currency is trending. Another trick is to look at the body position. A low position body with long wick is favourable to beginning of a up trend. This applies same for the down trend. Many hundred of pips trend begins in this way. Another observation is to have the body lower then 50% mark. This is another indicator of the forming of a trend in the currency price.
There is numerous naming of different candle stick pattern which am not covering here. You can go Google for more information. What I intend to cover is more on the application of this HLOC bar.
source http://currency-trading.ezinemark.com/how-to-use-high-low-open-and-close-price-in-auto-currency-trading-7d35fed1eb2e.html
Written by Kathy Lien—chief strategist for the number one online currency broker in the world—Day Trading the Currency Market reveals a variety of technical and fundamental profit-making strategies for trading the currency market, and provides a detailed look at how this market actually works. It contains actionable information and strategies, which can help you enter this highly competitive arena with confidence and exit with profits.
Editorial Reviews
Review
"...a leap forward in sophistication..." (The Technical Analyst, June 2006)"…well researched ideas…Lien’s expertise really shines through…" (Shares, August 2006)
From the Inside Flap
The currency/foreign exchange (FX) market is by far the largest
financial market in the world, with trading volumes surpassing $1.9
trillion a day. Although primarily dominated by a worldwide network of
interbank traders, a new era of Internet-based communication
technologies has recently allowed individual investors to gain direct
access to this popular—and profitable—market.
Written by Kathy Lien—chief strategist for the number one online currency broker in the world—Day Trading the Currency Market reveals a variety of technical and fundamental profit-making strategies for trading the currency/FX market, and provides a more detailed look at how this market actually works.
Designed for both the advanced and novice trader, Day Trading the Currency Market contains something for everyone. It touches on the major FX market basics or currency characteristics that all traders—particularly day traders—need to know, and contains actionable information on which you can base some of your trading strategies. This comprehensive guide opens with a straightforward discussion of general issues, such as the emergence of the foreign exchange market, who the major players are, and significant historical milestones, but quickly delves into more detailed topics in the following sections:
- What moves the currency market—factors that impact both long- and short-term price movements
- What are the best times to trade for individual currency pairs—through an outline of major currency pair trading activity (in different time zones), you'll discover when pairs are most attractive
- Trade parameters for different market conditions—teaches you how to first profile a trading environment and then know which indicators to use for that trading environment
- Technical trading strategies—covers some of the most important trading strategies for day traders and swing traders. They run the gamut, from "Fading the Double Zeros" to the "Inside Day Breakout Play"
- Fundamental trading strategies—illustrates how to trade off commodity prices, fixed income instruments, and option volatilities; and covers intervention-based trades as well as the secret moneymaking strategies used by hedge funds
- A profile of major currency pairs—discusses the unique characteristics of each major currency pair, from what drives their price action to which economic data releases are most important
From the Back Cover
Praise for DAY TRADING the CURRENCY MARKET"This is an extraordinary
book that is many levels above other books on currency trading. It's
filled with practical tips deriving from Kathy's experiences as a trader
at JPMorgan and as an analyst and educator to online traders. A
must-read for novice and experienced traders alike, this book will save
readers a lot of money in expensive trading lessons."
—Drew Niv, Chief Executive Officer, Forex Capital Markets LLC
"I thought this was one of the best books that I had read on FX. The book should be required reading not only for traders new to the foreign exchange markets, but also for seasoned professionals. I'll definitely be keeping it on my desk for reference. "The book is very readable and very educational. In fact, I wish that Kathy's book had been around when I had first started out in FX. It would have saved me from a lot of heartache from reading duller books, and would have saved me a lot of time from having to learn things the 'hard way'. "I look forward to reading other books from her in the future."
—Farooq Muzammal, Head of Foreign Exchange, Europe, Refco
"Kathy's book is an indispensible tool for Forex traders, whether you are a professional or novice. It not only lays the groundwork for an in-depth understanding of Forex trading, it also contains numerous fundamental and technical strategies . . . I suspect that many traders will be keeping Kathy's book within arm's reach for many years to come."
—Eddie Kwong, Executive V.P./Editor in Chief, Tradingmarkets.com
"In Day Trading the Currency Market, Kathy Lien provides traders with unique, thoughtful, and profitable insight on trading this exciting market. This book should be required reading for all traders, whether they are novices to Forex or experienced professionals."
—Cory Janssen, Cofounder, Investopedia.com
"There are aspects to trading currencies that are different from trading equities, options, or futures. In this book Kathy Lien gives a deep insight into all the mechanisms that take place in the currency markets. Any currency trader will gain more confidence in their trading after reading this book."
—Jayanthi Gopalakrishnan, Editor, Stocks & Commodities magazine
"Kathy has done a brilliant job with this book. She speaks directly to traders and gives them guidance to improve their performance as Forex traders. I took some notes and ideas from the book myself that are going to be very useful for my business."
—Francesc Riverola, CEO, ForexStreet SL
—Drew Niv, Chief Executive Officer, Forex Capital Markets LLC
"I thought this was one of the best books that I had read on FX. The book should be required reading not only for traders new to the foreign exchange markets, but also for seasoned professionals. I'll definitely be keeping it on my desk for reference. "The book is very readable and very educational. In fact, I wish that Kathy's book had been around when I had first started out in FX. It would have saved me from a lot of heartache from reading duller books, and would have saved me a lot of time from having to learn things the 'hard way'. "I look forward to reading other books from her in the future."
—Farooq Muzammal, Head of Foreign Exchange, Europe, Refco
"Kathy's book is an indispensible tool for Forex traders, whether you are a professional or novice. It not only lays the groundwork for an in-depth understanding of Forex trading, it also contains numerous fundamental and technical strategies . . . I suspect that many traders will be keeping Kathy's book within arm's reach for many years to come."
—Eddie Kwong, Executive V.P./Editor in Chief, Tradingmarkets.com
"In Day Trading the Currency Market, Kathy Lien provides traders with unique, thoughtful, and profitable insight on trading this exciting market. This book should be required reading for all traders, whether they are novices to Forex or experienced professionals."
—Cory Janssen, Cofounder, Investopedia.com
"There are aspects to trading currencies that are different from trading equities, options, or futures. In this book Kathy Lien gives a deep insight into all the mechanisms that take place in the currency markets. Any currency trader will gain more confidence in their trading after reading this book."
—Jayanthi Gopalakrishnan, Editor, Stocks & Commodities magazine
"Kathy has done a brilliant job with this book. She speaks directly to traders and gives them guidance to improve their performance as Forex traders. I took some notes and ideas from the book myself that are going to be very useful for my business."
—Francesc Riverola, CEO, ForexStreet SL
About the Author
Kathy Lien is the Chief Currency Strategist at Forex Capital Markets LLC (FXCM). She is responsible for providing research and analysis for DailyFX, including technical and fundamental research reports, market commentaries, and trading strategies. Prior to joining FXCM, Kathy was an associate at JPMorgan Chase where she worked in cross-markets and foreign exchange trading. She has vast experience within the interbank market using both technical and fundamental analysis to trade FX spot and options. She also has experience trading a number of products outside of FX, including interest rate derivatives, bonds, equities, and futures. Kathy has written for CBS MarketWatch, Active Trader, Futures, and SFO magazines. She has taught currency trading seminars across the country, has appeared on CNBC, and is frequently quoted on Bloomberg and Reuters.
Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings (Wiley Trading) Click here to read amazon customer reviews and rating
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