Here’s the deal, learning just a few key candlestick patterns WILL improve your candlesticks bullish reversal patterns in forex to recognize trading opportunities and, enter better trades! The Japanese have been using these patterns for centuries, to trade rice of all things! Candlestick patterns emerge because human actions and reactions are patterned and constantly replicate and are captured in the formation of the candles.
So, by recognising these patterns and applying the the lessons that the patterns teach, can and does yield results in your trading! And isn’t that the aim of trading? Now I know what your thinking! ESSENTIAL’ LIST THAT I GOTTA MEMORIZE!
Don’t think of this as a list to memorize. For the most part Candlestick patterns are about spotting market turns, If you can spot a turn, then you can profit from it. Within these categories are both bullish reversal and bearish reversal patterns. When you think you see a familiar candlestick pattern in your charts, You can double check the pattern in this guide and make an informed choice on what to do next.
Equal open and close, Doji patterns. Doji: The basic doji candlestick pattern is when a candle’s open and close are almost equal. The shadows can vary in length. So the candlestick looks like an inverted cross, a simple cross, or plus sign. The doji conveys an even struggle between the forces of the market, both side pushing with no net gain is achieved. The doji can be both a reversal pattern and a continuation pattern. This candlestick pattern looks like it sounds, the parents have walked off and left the baby behind!
This is a reversal pattern which can occur at the end of a run in prices. It is pretty rare to find, but it is pretty reliable when it does happen. It happens over three candles, the middle candle is a doji which has gapped away from the previous candle. The final candle gaps back the opposite direction.