Candlestick Patterns: Adopting New Patterns

Today many people who are related to forex had adopted the usage of candlestick patterns for the technical analysis which has provided them with the better results in the trading aspect. A trader should have idea about the pros and cons of interpreting the false results or biased one,and to avoid these mistakes new techniques should be adopted which have been arisen and are more helpful for the technical analysis and it builds up the confidence to the trading because of this quality many of the professionals have opted for the candlesticks pattern and many books and blogs are being presented for the successes achieved by the knowledge of these candlesticks.

Candlestick Patterns
                    source: YouTube.com

Types of Candlestick patterns: –

  • Bullish Engulfing– It has a 2 candlesticks bullish engulfing candle and the previous is a bearish candlestick.It follows the common pattern, this is considered as the strongest signal for the downtrend’s end and potential start. In this, the current bullish candlestick wraps the previous body of the candlestick.
  • Piercing pattern –It has 2 candlestick 1st is bearish and the other one is a bullish This type of pattern occur very often but when it does it has a powerful signal. This can also be considered as amongst the strongest signals. The mathematical approach should be good to spot this candlestick and its validity determination.
  • The Hammer Pattern– It consists of only 1 candlestick that is only hammered candlestick to make an analysis. This is considered as a fair pattern but it appears in the larger timeframes. It needs to be specific for its appearance and for the matching of the description. It is easy to identify this pattern but people usually make errors in identifying it. It can be either bullish as well as bearish.
  • The morning star –This pattern consists of 3 candlesticks, 1stis bearish, 2nd is Doji and the last one is a bullish candle. This is a very common pattern and can be applied at all timespans. The better formation of the morning star is totally dependent on what sort of the Doji candle is there and the length is also determined whether it succeeds Doji. All the conditions and the criteria need to be met so that its validity can be checked whether it’s up to the mark or not.

Candlestick plays a very important role in the technical support of the person dealing in forex or trading in it and it is highly important to choose the right kind of candlestick to perform the work and interprets the trends in a right way.

Posted on: September 28, 2018, by :