Candlestick patterns summary is an overlook of all patterns we looked at in the previous lessons.
Ooooh! thanks to you all who have come all this far to this session. Thanks for the hard work .
I hope at this point you can make some profits out of your trades if you followed the whole session.
As long as you understand the concept behind candlestick patterns , you will not issues interpreting the market.
With that kind of knowledge, you can also develop your own trading strategies.
For instance, you can choose to trade candlestick with the supports and resistance indicators. You can trade candlesticks alone, especially the reversal patterns.
More to that you can trade price action. ie the highs and lows(price rejection).
Candlesticks are good and you can use them to formulate a strategy to trade.
Let’s have a quick look through the candlestick patterns summary.
The Candlestick Structure
- A candlestick has a hollow or filled part known as the real body and long thin lines below and above.
- The line below and above the candle is referred to as the shadow or the wick.
- The top of the upper shadow is high and the bottom of the lower shadow is the low.
- The real body shows the range between the open price and the closing price while the shadows show the highest and lowest price can move.
- If the close is lower than the open of the real body, a black or red color is normally used.
- And if the close is above the open of the real body, a white or blue color is used.
- The longer the real body of the black/red candlesticks, the stronger the pressure of sellers over the buyers in the market and the further the price closes below the opening.
- The longer real body of a blue/white candlestick the stronger the buyers in the market and further close above the opening showing more buyers in the market
- The small real bodies show low buying and selling pressure and signifies indecision in the market.
- The long upper shadows show that high prices have been rejected in the market and long lower shadow shows low price rejection in the market.
- Candlesticks with no wicks show that either the buyers or sellers were in control of the market from the first trade to the last trade.
Bullish reversal candlestick patterns
- The Morning star
- bullish engulfing candlesticks
- spinning tops
- inverted hammer
- Tweezers bottoms
- Bullish Harami
- The three soldiers
- Piercing Pattern
- The three inside up
Bearish Reversal Candlestick patterns
- The evening star
- the Dark cloud cover
- bearish engulfing pattern
- Bearish Harami
- The Three crows
- Shooting Star
- Hanging Man
- spinning tops
- Tweezers Tops
- Three Inside Down
Final Word on candlestick patterns summary
Now that you know all the candlestick patterns, your next interest should be on how to trade them. We also gave you the candlestick pattern summary cheat sheet in previous lesson
Spotting candlestick patterns is very challenging especially if you concentrate on looking at all the patterns. You don’t need all the patterns. Just choose one and concentrate on that.
In addition, the confirmation candlestick is very important so, always wait to trade until it closes.
When the reversal pattern appears at the support or resistance, you should do two things.
In case you are in trade, a reversal pattern at support or resistance is more significant. You should close your trade.
However, if you are looking at the set up to trade, a reversal pattern at the support or resistance is a strong signal. Wait for the confirmation candle and then sell or buy.
Above all, Candlestick patterns are common in the market. With a good eye, you can spot more than 5 set ups in the market daily.
Therefore choose one pattern and make a strategy that suits you.
How long you should hold an open position, is a personal thing for all traders. The decision is all yours. You know what your goals are as a trader, the kind of strategy you use to trade. All this starts from what you are? and What you want? If I am to answer, this...
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