by trackrecord
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 -
1. 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.
2. 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.
3. 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.
Learn Forex Candlesticks
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You’ll also come across a forex trading strategy that you can start using immediately and which is based on Forex Candlesticks
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