Candlesticks Pattern is a type of price chart which is commonly used in technical analysis by traders to check the sentiments of the investors.
Candlestick Pattern chart displays the open, high, low, and closing prices of a market for a specific period of time. Shadow of the candlestick gives information about the high and low and body of candlestick pattern shows the open and close of the period.
Candlestick patterns are used to predict the future direction of price movement. This indicator displays various important candle patterns that can be used by traders to trade the price action. Let’s try to understand the working of this indicator.
Candlesticks Pattern Overview
This indicator shows different continuation and reversal candle patterns which should be looked at in the context of the trend and market structure.
If the price is forming higher high and higher low structure then traders should look for bullish patterns to ride the uptrend.
If the price is forming lower high and lower low structure then traders should look for bearish patterns to ride the downtrend. If the trend is on the stage of maturity, then reversal trade can also be done with the help of reversal candle patterns.
Check Out: Blue Devil Trading System
Candlesticks Pattern Explanation
This indicator can various candle patterns like Outside bar and Inside the bar, Engulfing, Stars, Harami, etc. This indicator also gives an alert when a new pattern is found on the chart.
This indicator is more useful on trading higher time frame charts such as 1h, 4h, and daily. Traders can also use this indicator along with chart patterns to confirm the entry of the trade.
Also Read: RoboForex $30 Welcome Bonus
Candlesticks Pattern: Buy Conditions
- Price forming higher high and higher low structure or any bullish chart pattern.
- Bullish pattern Identification by the indicator.
- Breakout of the high of last candle of the indicator can be used as trigger for long trades
Candlesticks Pattern: Sell Conditions
- Price forming lower high and lower low structure or any bearish chart pattern.
- Bearish pattern Identification by the indicator.
- Breakout of the low of last candle of the pattern can be used as trigger for sort trades.