Candlestick Pattern Indicator in Combination with Price action
Hello again on our best mt4 indicators website! Last time we shared an interesting Chande Kroll Stop article! Today we are going to do a candlestick pattern indicator article. Every day traders are confronted with the choice of choosing from various trading opportunities; because of this, it can be frustrating when you can’t find that “unique” strategy that works.
This further complicates the matter when you move from hope to fear of losing each trade, tax consequences, and stop-loss triggers. Is there any way to avert this? Have you concluded that the forex market is a scam? Take a step backwards for a moment and reconsider after reading this article.
In this article, you will learn the essential components of trading candlestick patterns and basic candlestick patterns to enhance your trading.
Candlestick Pattern – Are they worth trading?
Candlestick patterns and price action represent a powerful trading strategy for traders – professionals and newbie. There positive returns and predictive value is quite commendable, primarily when traded appropriately. However, for a new trader, the struggle remains understanding the basic concepts of candlestick patterns; this has led to the search for candlestick pattern indicator as a means of quickly identifying patterns.
Candlestick patterns help traders who understand the basic concept by painting a clear picture of the market. Additionally, it flags up signals and predicts future price movement, which is the essence of trading.
Trading is all about predicting the next outcome before it happens. Yes, that is one thing you need to be super perfect if you want to be a professional in this market. Besides using a candlestick pattern indicator, you can read naked candlestick patterns and make the right decisions.
Component of Candlestick Pattern
There are dozens of candlestick patterns available for traders, and remembering all can be a daunting task. While it is not necessary to remember them, it can be helpful if you are conversant with them. Although they won’t make you a better trader; however, they can fine-tune your trading.
Body or Size
The size of a candlestick pattern is a secret weapon since it tells traders what is happening in the market. The candlestick can get smaller or larger, depending on what is influencing it. The same will be the same if you are using a custom candlestick pattern indicator; some traders have this ‘psychology’ that candlestick pattern indicator makes candlestick smaller or larger.
In analyzing price action, the best approach is to consider the recent candlestick size. The information here can help give you an idea of what momentum is doing and what is going on. With this, you can better judge the market rather than blindly trading. TIP: If you are more a fan off auto trading with ea’s. Then you can use a price action scalping ea. That can boost your trading for sure!
Shadows or wicks
Another component of a candlestick pattern that contains relevant information is the wick. From the wick, you can decide if there is price rejection or reversal about to happen. For instance, when you see a Pinbar pattern, it could tell you that price rejection might take place on that level. It would also mean indecision like the Doji pattern, which has a little or nobody with a long upper and lower wick.
Close and Open
The open is where the price opens before the market, whereas the close is the closing price. These two are quite easy to identify in the market.
Note: Candlesticks come in various sizes. A long body indicates strong selling or buying pressure. Additionally, the longer the body, the more intense the selling or buying pressure.
Component of Price Action Trading
If you understand or decode the information a single candlestick tells, you are a step away from perfecting your skill. It doesn’t mean you won’t strive to learn more about the market; you can add these two concepts to your trading as they will filter signals and generate high signals. If you are not a price action trader, then it is better to switch, but you can still learn.
One important aspect of price action many traders overlook is candlestick comparison. Most traders focus on individual candlesticks such as engulfing, doji, spinning top, hammer, and hanging man; however, to be an efficient trader, you have to integrate candlestick pattern with other strategies.
Candlestick comparison helps traders to put things set things in their right perspective. For instance, a trader looking at an engulfing candlestick that hardly engulfs the previous one with a less predictive power will not have the same perspective with a candlestick that quickly engulfs the previous one.
Location or position
The idea behind the location is that price action gets traded only areas where price levels are high. While some traders might opt into the market once they see price action signals, most clinical traders will only trade price actions when it is near areas of high impact. These traders use areas such as supply and demand levels or support and resistance levels. Notwithstanding, the real trading comes in being patient for the price to reach your anticipated levels.
Basic Candlestick Pattern
In this section, we will explore some of the bullish and bearish candlestick patterns to enhance your trading.
Bullish candlestick pattern
These sets of candlesticks usually form after a downtrend in the market. Traders look at these as a signal that price reversal is about to take place. They act like a candlestick pattern indicator to go long. These candlestick patterns include a hammer, inverted hammer, bullish engulfing candlestick, piercing line, morning stars, and three white soldiers.
Bearish Candlestick pattern
Bearish patterns usually form after an uptrend in the market and indicate a point of resistance. Once traders notice such candlesticks, they close any long positions while gearing up for short positions. Famous bearish candlestick patterns include shooting star, hanging man, bearish engulfing, evening star, three black crows, and dark cloud cover.
Last word on Candlestick Pattern Indicator
So we are at the end off this review article on our Best MT4 Indicators site. Candlestick pattern and price action trading may be a powerful strategy when implemented rightly. Today, the forex market is easy to trade but requires simple strategies. However, using a candlestick pattern indicator isn’t sufficient; you need other essential tools to complement these strategies.
We have a lot of tools and top forex indicators to generate the best signals when trend trading or reversal trading. These tools and indicators have undergone various testing and are profitable due to the algorithms used in creating them, so check it out via this link.
Share your thoughts with us about the Candlestick Pattern Indicator in the comment section below: