Candlestick Chart Patterns
In forex, stocks and futures trading, one of the most
powerful and important tools is the candlestick chart. Expertise in candlestick
chart patterns can help you greatly in making the most appropriate decisions
while trading. Candle stick chart patterns help traders make a more accurate
prediction of future movement for currency, stocks or futures prices, which is a
very important key to success in trading.
Candlestick charts represent the price pattern and market conditions in a visual
manner. Intense studying of candlestick chart patterns is vital to interpret
potential movement and to make wise trading decisions. Bear in mind that foreign
exchange market or currency trading, stocks or futures trading is a very risky
business. Traders must first learn a few tools of the trade to help you discover
price predictions as well as help you decide whether to make a trade or not.
An important issue that can help you to become a successful trader is to learn
how to read, understand and analyze candlestick chart patterns. The candlestick
chart is a visual representation of price movement. With the aid of proper
analysis, you can be more confident on your trading decisions. Traders should
consider participating in a professional
Training Program for guidance in
reading charts, no matter which market you follow.
Movement of currency pairs in the currency market, stocks on the stock exchanges
or futures on the commodities market can be represented by a candlestick chart.
At times, the candle chart spawns certain patterns that traders utilize to help
them decide whether they are facing a potential trade that they wish to enter.
Additionally, candle charts can provide guidance to traders as to when it may be
an appropriate time to exit an open position.
There are several candlestick chart patterns that may help traders during their
adventure while trading the market or markets of their choice.
Bullish and bearish candlestick patterns should be the focus for traders to
learn first. While trading forex market, stocks or futures, a bullish chart
trend represents the increase in prices in the market. A bearish candlestick
pattern represents the reduction of prices in the market or the lack of
assurance in the market. While there is never a guarantee of profits or losses
on any trade, regardless of the market, candlestick charting patterns provide
insight, into a potentially profitable trade.
An engulfing bullish pattern can be seen between two days and when the second
day’s candle stick engulfs the previous day’s candlestick pattern. On day #2,
the candle opens lower than the previous day’s opening price. This type of
pattern can identify the engulfing bullish pattern on the candlestick chart as a
very large body consuming a smaller one on the preceding day. The chart of the
second day also has an opposite color of the previous days. In a case like this,
buyers are the ones in control. A bearish consuming pattern is simply the
opposite of the bullish pattern.
The ability to read and understand these patterns, as well as others is very
essential for successful trading. Traders must remember that, charting is not a
single success or failure factor while trading. Emotions play just as an
important role in trading, as do candlestick charting. Traders are doomed to
fail and lose money, when they attempt to trade when their emotions are not on