Basing Candlestick – What Does It Mean in Forex?
Are you familiar with a basing candlestick? No, we are here to help you.
What Is a Basing Candle?
Candlesticks are utilized in technical analysis. It is possible to locate them on charts. Candlestick bodies indicate the open, high, as well as the closing price of a specific security, whereas the wider part is known as the real body.
A basing candle or basing candlestick is a trading indicator. The length of its body is less than half of the basing candlestick’s range between the highs and lows. That is less than 50% of the basing candlestick’s range. We need to mention the above-mentioned candlesticks tend to develop the base of the supply-demand zones.
Basing candlestick and the forex market
As we have already covered basing candlestick, we can learn more about the forex market in order to have a better understanding of basing candlestick and the forex market.
Do you know what the forex market is?
To make a long story short, the forex market is where currencies are traded. As we all know, currencies play an important role. To put it mildly, currencies allow people to buy various goods and services. As you can see, you need to buy U.S. dollars or other major currencies in order to pay for various goods and services.
For example, if you live in France and would like to buy a product from the U.S., you or the company from which you plan to buy the above-mentioned product must pay the U.S.-based company for the product in U.S. dollars. In order to pay in U.S. dollars, the importer must sell the euros and buy U.S. dollars.
Tourists and the forex market
Now, let’s take a look at another example. A Czech tourist in Brazil can’t use the local currency of the Czech Republic in order to pay for dinner. The above-mentioned tourist has to exchange the Czech koruna for the Brazilian real.
There is no such thing as a central marketplace for forex. Instead of the central marketplace, currency trading is conducted electronically over the counter.
We also need to mention that the world’s largest financial market is open 24 hours a day, five and a half days a week. Importantly, currencies are traded around the world in the major financial centers of Hong Kong, Sydney, London, Zurich, New York, Singapore, and Tokyo – across almost every time zone. So, when the trading day in the U.S. comes to an end, the market opens in Tokyo as well as Hong Kong. Hence, the world’s largest financial market can be quite active all day.
Forex market and inexperienced traders
Are you familiar with the forex market?
Don’t worry; you don’t have to be a financial guru in order to understand how the forex market works.
First and foremost, you need to learn as much as possible about forex trading. Hopefully, there is no lack of online courses for beginners. It makes sense to learn more about the forex market.
What’s next?
You will need to create an account at a brokerage. As a reminder, they (forex brokers) don’t charge commissions. Forex brokers earn money through spreads between the buying and selling prices.
If you are an inexperienced trader, it is a great idea to create a micro forex trading account with low capital requirements.
Moreover, it is important to come up with a trading strategy.
A good trading strategy is based on the reality of your situation and financial resources. Importantly, a good trading strategy takes into consideration various factors. As a reminder, forex trading is mostly a high-leverage environment. So, forex trading isn’t for everyone.
Once you begin trading, always verify your positions at the end of the day. The vast majority of trading software already provides a daily accounting of trades.
Last but not least, you need to control your emotions. Fortunately or unfortunately, emotions play an important role in every decision you make. So, it is vital to stay calm.
