Forex Candlesticks Patterns are one of the most commonly used indicators on forex charts. However when a trader starts doing more research, they come across 100’s of patterns and most of them are left confused on which one is the most reliable and which ones should be discarded. To help you with that, I am suggesting you three forex candlestick patterns that you must be aware of. Before I begin, let me mention that I am suggesting these candlestick formations on the basis of –
1. how frequently do they appear.
2. How much reliable are they and
3. How difficult or easy are they to spot.
With that said, lets go through the top 3 candlestick patterns in Forex Market –
Bullish and Bearish engulfing pattern – One of the most common and one of the straightforwards to identify and make trade decisions. When a significant sized bullish candle is engulfed by a long bearish candle during an uptrend, this may signify that uptrend is about to end and the downtrend may be resuming. This is bearish engulfing. This information when combined with other technical indicators, can help in making a decision regarding opening or closing of a trade.
Vice-a-versa is true for bullish engulfing forex pattern.
Evening and morning stars – Equally reliable, but this candlestick formation is not that common. However, when spotted, a lot of traders place trade without even waiting for a confirmation.
Forex Candlestick Doji – This is not a pattern, but just a single candlestick formation. However, its formation on a forex chart signifies that the existing trend is about to end and a trader should make a trading decision whether to keep the trade open or adjusting of stop losses etc. When it is seen on a daily chart, a lot of traders close their trades.
The basics of forex trading and making money from the trading of currency is learning how to analyze price trends and patterns and then making them a base for taking various trading decisions. Gone are those days when one used to rely only on the instincts, as now the stakes and risks associated with forex trading are relatively higher than what they used to be in earlier time.
If you are looking for one of the most popular forex trading charts then it is the forex candlestick chart. You should try to learn how to study the forex candlestick patterns, if you are really interested in making some handsome money in the currency market https://mytradingtools.com/harmonic-pattern/.
You need to be clear with a couple of things, one is that you need to finalize the basis on which you want to trade or not and second you have to find the appropriate time to do the same. These two factors will help you in achieving your aim.
Candlestick charts are simply visual representation of the prevailing market price in the current market. The reason why it is called candlestick chart is because its shape resembles that of candle. If you want to look for ways in order to make good trading decisions, then here are few patterns that you should know, as they will guide you whether and when to trade.