Technical traders should always analyze the market. We offer you a method that sets clear support and resistance levels and can be used to trade on futures, stocks and currency pairs. In this article, we will talk about the outstanding observations of market movements made by Seiki Shimizu, which he described in his book “Japanese Charts”. In his works, Shimizu predicted price movements based on a certain form of candlesticks. As technical traders, we should always consult with the market on its further movement. This is the basic principle of any technical trading system. Shimizu described it in the following way.
We should look at the market movement itself, not at economic policy. The art of candlestick charting began at the end of the 17th century in the port city of Sarkata, during the 8th Shogunate, long before prospective economic policy was seen as an investment instrument. A trader should consider market movements as the tides of strong market emotions. These emotions generate price patterns and patterns that allow you to make decisions like a cat waiting for a mouse movement. Just as the cat defines instant mouse movements before it tries to escape, so the trader must define the tiniest movements of the market and make decisions before the market makes its main movement. The chart reflects only past market movements, and no matter how long you look at the chart, you will not be able to predict the future price movement accurately. However, if you want to try to predict future price movements in the market, watching the chart will bring you as close as possible to achieving the desired result.
Studying price movements and their underlying market psychology is useful for anyone who is interested in the markets. Many books have been written about candlestick shapes with all their respective names, such as paper umbrella, hanging man, dodge, etc., each of which implies the impact of each of these candlestick shapes on the price as soon as it is formed. These observations are not related to the weekly chart, they are only suitable for short-term speculators. Nevertheless, price movements on the daily chart give way to smoother and more predictable movements on the weekly chart in the Haguro method.
Ratio of candlestick ranges
Let’s take a look at the bodies of the weekly candlesticks and their ratio to the middle range. To start with, we will group only possible results on the weekly chart. The Haguro method for weekly charts refers to the total weekly range, i.e. the maximum and minimum price for the five-day period. The underlying psychology is that the closing price on Friday is the level at which the market decided to settle after five days of trading. This price movement from maximum to minimum contains the opening price on Monday and the closing price on Friday.
Haguro method of analysis has proved to be a simple and reliable method of setting support and resistance levels. Many professional traders have been using this method in their daily analysis for many years, and it remains operational in today’s volatile markets. Despite the fact that this method was developed for futures markets, it has also demonstrated its reliability in trading on stock and currency markets.
When you want to successfully trade binary options, you should study as many strategies as possible. This will give you a great chance to achieve good trading results as a result. Each individual strategy must be applied within a clearly defined framework that will result in an excellent result for you.