If you really want to be successful in the stock markets and make money trading them, then you need to learn about the top 10 Candlestick Patterns. These patterns are easy enough to learn and understand, yet they can be a huge help in guiding you into making wise investments. So, what exactly are these patterns? This article will give you an explanation.
The first pattern we are going to look at is the Open Pattern. The open of a candle shows the traders’ opinion of whether the market will go up or down during the opening or closing of the day. What we are looking for is a candle that opens high and then goes down as the day goes on. We are going to identify Open Patterns every day in the markets.
The second pattern we are going to look at is the Short Candle Range. This pattern is formed by a candle opening very low and then opening higher than the previous days open. What usually happens in this pattern is that the price starts off very weak and ends a little stronger than the previous days open. It is important to remember that these are top indicators, not bottom indicators.
Another top indicator we are going to look at is the Day Long Candle Range. This is a perfect example of the Open Pattern, but on a day long chart. It is created by a day long candle chart. The day long chart will show us a pattern that occurs for one day, then repeats itself every day for a week.
The Open Range and Day Long Range have a repeating pattern, because both are open for a full day. But unlike the Open Range, the day long candle does not stay open for a full day. Instead, it opens lower on the day of the first trading day and then slowly opens higher throughout the course of the day. It will eventually finish higher on the final trading day. If you use this pattern to place a position on the market, you should be prepared to make a profit if the trend continues.
Finally we are going to take a look at the Close pattern. A close occurs when a candle on a chart is completely closed. There is no wick release. Candlesticks will sometimes display a candle that is partially open. This indicates that the pattern will continue on the same date.
The Open Range and Close Pattern can also be used to identify reversal patterns. A reversal pattern is created by a candle that is completely closed. This indicates that the candle will reverse its direction. Open and Close Patterns are very reliable indicators, but they can sometimes be fooled.
There are many more top candle patterns that can be used to identify trading opportunities. Use your favorite method and do a little research to find out which systems are the best. There is no right or wrong way to trade, but having the right tools to assist in your trades is very important.
You must remember that most technical analysis systems like the MACD, Stochastics, and moving averages don’t have anything to do with the price action. They are looking for trends. The top of the candlestick is supposed to tell us about that trend. If the pattern is based off of volume, then it’s an indication of strength in the market. Top Candlestick patterns are meant to provide us with entry points.
Some of the top candlestick patterns are bullish. Bullish patterns indicate that the price has reached an important resistance or support point. When a stock has made this top pivot, you stand to make money if it rebounds.
A bearish pattern describes when the stock has hit a major retracement. Usually this happens after a major announcement or news event. After this event, there is usually a bearish rally. When this happens, you can expect a correction as sellers get locked into their stocks. The best time to trade after this pattern is when the correction is complete.
Most technical analysis systems ignore top Candlestick patterns. This is a mistake. To pick these patterns and take advantage of them, you have to master one very important indicator – the breakout. Once you master this indicator, you can become an expert at finding high probability trades.