If you’re looking for a way to read the price action then this candlestick pattern post is for you. No doubt that with candlestick pattern, you’ll be able to:
Get Early Signal
Know when the price shows weakness – hint : Reverse
But in this post, the main purpose we’re going to learn the candlestick patterns is because to know what happen when the price is approach with candlestick pattern.
You’ll discover the most 3 powerful candlestick patterns in this post that will absolutely improve your trading analysis process. In the end of the day, this will lead to profits and huge return rate.
The basic of candlestick:
Shows the range between the open and close within the period of single candlestick.
How strong the momentum of bull or bear
Usually, green color body indicates price moving up/bullish. Whilst, the red color body indicates price moving down/bearish.
The range between low and high within the period.
Shows how strong the rejection of the price – AKA reversal
The Forex Candlestick Patterns Method:
Pattern 1: Pin Bar
The name says it all about the shape. Here is the screenshot of pin bar.
There are two types of pin bar:
Bullish Pin Bar(yellow highlight)
Bearish Pin Bar
Bullish Pin Bar
The bullish pin bar is for buy signal. It is recommended to trade the bullish pin bar pattern during retracement or downtrend.
Example 2 (retracement)
Bearish Pin Bar
The bearish pin bar is for a sell signal. It is recommended to trade the bearish pin bar pattern during retracement or uptrend for effective result.
Pattern 2: Doji Star
The formation of doji star indicates a change of trend/reversal.
Two types of Doji Star:
Morning Doji Star: 3 day bullish reversal pattern that formed during downtrend. The first candle has a long bearish body, the second candle forms a doji. The last candle is bullish with long candle. Sometimes there is a gap between the first and second candle but this doesn’t necessary when identifying this pattern since in forex market, you can barely or rarely see a gap.