• Thu. May 30th, 2024

Forex charts Algorithms of Japanese candlesticks

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The scenario may be white, and the blacktop candle closes, and the candle will be closed by a blacktop if on Friday there will be fundamental analysis information good for the dollar, and the price will go downwards badly. In this case, instead of a white candle, we’ll get a black top, but the scenario of the development of a week candle will still remain white.

Algorithm of calculation of a black candle

If the calculation has shown that the candle should be white, and in practice, it has closed by a black top, the algorithm of price movement still remained white.

The calculation of a candle is not stagnant. It requires constant refinement depending on what calculation of price movement was the initial one and whether the price on this algorithm goes in real-time (see fig. below).

For example, the trader works on weekly schedules, and calculation gave the following settlement white candle. Work should be done then in the following order.

Example of candlesticks application

According to the algorithm of white candles on Monday the price should come to checkpoint 2. After that, by Friday it should reach checkpoint 3 and, finally, the week closes at checkpoint 4. But very often price on Monday comes not to the settlement point 2, but to point 5, or on Tuesday to point 8. After Monday (Tuesday) it is necessary to make a correction of calculation (to wait for the bottom point: 2, 6, or 9) from a point 5 (or after Tuesday from a point 8). If checkpoint 2 has not been reached, it is necessary to expect checkpoints 6 or 9, and only after the achievement of points 2, 6, 9, it is possible to start to work upwards. No matter when the price will reach the top checkpoint, by the end of Thursday (a point 3) or in the middle of Friday (point 7). It is necessary to close here (after reaching the top point) and to try to work downwards (risk work).

Let’s assume that calculation resulted in the following week’s candle being white, with long shadows, then in calculating for a daily candle for Monday heavy graph will provide bottom work for all indicators despite the fact that the overall calculation of the week gave a white candle. This applies to Friday also.

In calculating the first and/or last week of the month, it is necessary to keep in mind that this week must be calculated twice. First, in view of calculations of the last month, and, secondly, in view of calculations for the new month.

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