A Specialized Form of Trading
In the beginning, day trading was only possible for financial companies such as banks because of the fact that few had access to the market exchanges and live market data. Now with the advancement of both the Internet and the processes of the stock and futures markets, individuals now have access the same market data and futures exchanges as these financial institutions. In addition, trading has become so affordable that just about anyone with a computer can make trades. Thanks to the computer age, Forex day trading is now more available than ever before.

Trading in your Bathrobe?
For many people, the year 2000 image of Forex day trading was middle-aged guys who quit their regular jobs to sit at home in their bathrobes making trades. Thanks to the Internet, we don't have to see a sight like this! While this is definitely possible, it is a broader picture; if you have an Internet connection, you can receive Forex news. If you can receive news, you are able to do the technical analysis necessary to make decisions and then to make trades, no matter whether you are at home, in an Internet café or on the beach. It sounds simple because it is; the hard part of Forex day trading isn't implementing trades, it's knowing what trades to make.

Forex Day Trading is not for Everyone
As with any kind of trading, Forex day trading is not for everyone. The stories of great successes in day trading (which are usually sold in EBooks on the Internet) are more than overshadowed by a large percentage of people who lose money day trading Forex or any other commodity. The money that you invest is called “risk capital” for a good reason; when you start investing, you have put this money at risk of loss. Successful traders know that when they expose their money to risk, it takes research and experience to make Forex day trading profitable.

Forex currency trading for beginners includes some important steps. Like any other form of trading, the investor needs a trading plan to outline his or her strategy; do you plan to trade by “scalping” (only holding positions for a few seconds or minutes)? Do you plan to use trend trades, counter-trend trades, or ranging trades? These are the kind of decisions that come into play and you need to know what you are going to do before you do it.

In addition, Forex day trading requires the new investor to understand the importance of research and technical analysis; if you don't follow the news, you can't really know what's going to happen with the currencies you trade. These days, there is a wealth of technical analysis tools available on the Internet. Finally, beginners need to have a system for charting trends and analyzing the movement for each currency they trade. For Forex day trading (and for all other types of trading for that matter), Japanese Candlesticks offers the best system for seeing movement in the market.

Conclusion
Forex day trading is not for everyone. It can be unpredictable and it is possible to lose more than you originally invested. If you learn Forex trading and the techniques and processes involved, it is possible to profit from Forex day trading. The good news is you don't have to work in your bathrobe! (Unless you want to!)

There are different parameters for utilizing the candlestick signals when a market is consistently trending. One of the rules of analyzing a trend is that a sell signal needs to be much more compelling the longer a trend persists. Other technical indicators improve the analysis of the trend in conjunction with candlestick signals. The old expression is "the trend is your friend." The ramification of this statement is very simple. The longer a trend remains in progress, the stronger the investor expectation is for the trend to continue. Although an uptrend has sell signals, the implication of the trend itself becomes a stronger analytical tool than an individual signal.

Other indicators can add to the analytical process. One of the most effective indicators is what we call the T-line. This is 8 Exponential Moving Average. This moving average has been used very profitably by Ricky Wayne, our trading room moderator. He uses this moving average as a very simple trading indicator for his short-term trading technique. His application of specific moving averages, that he has discovered, allows him to make a very profitable living with short-term trading in the markets. The basis of his trading is to use candlestick signals efficiently with well researched technical indicators. For more information on private training sessions for day trading, E-mail  Ricky Wayne at rick@candlestickforum.com

The T-line provides a clear visual indication of whether a trend will remain in progress. A candlestick sell signal in a long persistent uptrend will not have as much credibility for indicating a reversal if the trend has been supporting on the T-line with consistency. What is required to illustrate a trend change, a reversal of investor sentiment? A candlestick sell signal confirmed with a breach of the T-line. This now becomes an obvious indication that what had been acting as support previously, even after a candlestick sell signal, is not doing so now.

The markets have had a strong uptrend since mid-March. Tuesday, the Dow sold off after a Hanging Man/Doji signal. The market closed right on the tee line. Any time the market closed on the tee line during the uptrend, the next day revealed a candlestick bullish signal. Wednesday, when the Dow closed lower again, well below the tee line, that was a change of investor sentiment. Long positions were closed out if their charts were showing weakness. Short positions should have been added to the portfolio.

DOW

NAS

With the change of investor sentiment in the markets in general, scanning for high potential bearish patterns makes finding strong 'short' position candidates much easier. As illustrated in our recommendation to short DRIV, having the knowledge of the results of a Jay-hook pattern made this a high potential short trade. A Jay-hook pattern works just as effectively in bearish conditions as they do in bullish conditions.

DRIV

The potential bearish Jay-hook pattern made the evaluation of shorting DRIV easy to assess. A weak open in the stock price would be confirmation of the j-hook pattern and it would demonstrate that the recent low was not going to act as a potential double bottom. If leg three should have the same magnitude move as leg one, the next target should approach the $40 area.

Candlestick analysis incorporates high probability signals and patterns with expected results. The combination of market analysis and individual stock pattern analysis dramatically improves an investor's probabilities of being in the right position at the right time.

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