I must admit that some questions throw me, just a bit. The one below is just such a question. Now, the question didn’t throw me because it is difficult; rather, it threw me because it presented a kink in my thinking about the topic when I read it.
What are considered Western technicals and Eastern technicals?
My first thought when I read this was “what the heck?” I really did not know what the reader was referring to in his question, but then I thought about it for a moment, and I asked myself “what could eastern technicals be?” Searching my mental database brought me the only possible answer that could be in my database – candlestick charting. And that thought came from a Steve Palmquist book I reviewed some time back – Money-Making Candlestick Patterns. The question, however, seemed deeper, so I did some research, and, lo and behold, the answer is pretty simple …
Most Forex traders are familiar with candlestick charts, as this method of depicting prices has become the standard format on many Forex charting platforms. What many Forex traders may not be aware of is how well candlestick patterns function when combined with elements of Western technical analysis, such as support and resistance, bar chart patterns and the like.
Now candlestick charting is not only for forex traders. Many traders use candlesticks as a tool for trading varying asset classes. In fact, I use candlesticks as one tool in my trading, as they provide visual information that I find helpful.
But why make the distinction between eastern and western analysis, as the folks in the eastern part of the world are quite adept at our version of technical analysis, and we in this part of the world certainly have incorporated candlestick charting into our technical analysis? Is there a real distinction to make? In any case, my own question aside, here is some info that will help you all understand better (as it did for me) the basis of the reader’s question.
Candlestick charting was introduced relatively recently to the Western world from its origins in the historic rice trading markets of Osaka, Japan. Steve Nison, a prominent U.S. technical analyst, was responsible for bringing this ancient, yet innovative, Japanese chart-reading technique to Western investors. He translated esoteric Japanese financial texts into English and published several works on this ancient charting approach. Nison has been so successful in propagating the Japanese method of candlestick charting that it has now superseded the popularity of bar charts in many financial markets, including Forex.
Don’t ya just love gathering information and using that info to simply get smarter …
Trade in the day; invest in your life …
