To use your candlestick pattern book effectively, always look for confluence. Does the pattern align with:Support and resistance levels?Volume spikes?Oscillators like the RSI or MACD? Building Your Strategy
Body: The thick part of the candle shows the range between the opening and closing prices.Wicks (Shadows): The thin lines above and below the body show the highest and lowest prices reached during that period.Color: Typically, a green (or white) body means the price closed higher than it opened (bullish). A red (or black) body means the price closed lower (bearish). The Core Categories of Patterns the candlestick pattern book
A candlestick pattern is not a signal. It is a confirmation of a signal. You need a trend (up or down) before a reversal pattern makes sense. You need a range before a continuation pattern makes sense. To use your candlestick pattern book effectively, always
: A small candle followed by a larger candle whose body completely āengulfsā the previous one. Itās the visual equivalent of a tidal wave washing over a sandcastle ā a sudden shift in control. A red (or black) body means the price closed lower (bearish)
Start by mastering the "Big Five": the Hammer, the Shooting Star, the Engulfing patterns, the Doji, and the Morning/Evening Star. Once you can spot these in real-time, you will have a significant edge in any market environment.