Hey hey: what's up my friends, so in today's episode i want to share with you the truth about candlestick patterns right that you might not be aware of. So there are a few things that i want to cover number one: the get element about candlestick pattern. So traditionally, right, if you study - let's say the bullish engulfing pattern by right, this pattern right, it has to uh get lower than the previous day low and then close right above the previous day high. So that's where the bullish engulfing pattern actually engulfs or cover the previous day uh.

This is fine right if you trade the stock markets, because the the markets can, you know, get up and down right pretty often, but when you take this right and trade, the forex market, like the one hour time frame on the forex market, you realize that there's Not many gaps on the chart, so does it mean that you know bullish? Engulfing pattern cannot be applied to the forex market? No, you have to then use candlestick patterns right and tweak it in such a way that it's meant for the forex market, and one simple way to do it is that just those candlestick patterns that requires get right for the forex market right just ignore that portion Of it so, for example, again back to the bullish engulfing pattern, if you trade, the forex market, you rarely get a gap right below the previous day or the previous candle look. So in this case right as long as the bullish engulfing pattern. As long as the pattern right covers right or engulfs, all right, the previous candle, the body of the previous candle - that to me, is a bullish engulfing pattern. So you have to take this into consideration, especially the gap element right in trading when you are applying it to the forex market.

Number two candlestick patterns right. It doesn't tell you how the price move. Yes, a bullish candle right tells you that the price has. You know closed above the opening price.

That's why it's bullish! That's why it's green color, but it doesn't tell you exactly: how did the price move from the open to the close? Could it be? It goes up just from open to close one straight line or it went up, went down and then went up again or maybe it went up, retraced 50 and then went up again or maybe it went up and starts consolidating near the heights. You you have no idea right how the price moves from the open to the close. That's one thing that candlestick patterns won't tell you, so you have to you know kind of be aware of this limitation. So, for example, if you want to know whether is the price likely to break above previous day high, just by looking at the green candle, it won't tell you much of it information, because you can't see right on the micro analysis, on the on the on the My new details right how the price actually moved from the open to the close, so this is kind of like another limitation of candlestick patterns that you want to be aware of right.

Of course, it's easy to overcome this limitation just go down to a lower time frame and you can see it, but the reason i'm sharing this with you is to to kind of, like you know, share with you the truth right about how candlestick patterns work. Number three candlestick patterns right. They are not the only way to to read a chart. So so, especially new traders, you might be surprised, but there's other ways to read the chart.

Yes, you can use things like you know, line chart bar chart, etc and for stock traders right i've seen some prominent professional stock traders they just use bar chart. They don't even want to get involved with candlestick charts, candlestick patterns and the reason is simple, because bar chart pretty much provides similar information to what candlestick patterns provide, and maybe it's kind of, like less less overwhelming, because there's there is no color to it. It's just you can see the range of the candles, the volatility contraction patterns and that's it so again, right just to share candlestick patterns, candlestick charts. They are not the only way to read or visualize a chart.

There are many other ways to do so. Number four candlestick patterns right. They are very useful right to me personally as a entry trigger as a as a trigger to get into a trade. They are not right meant to be used in isolation, so this means, for example, if you spot a hammer, if you spot a shooting star, it doesn't mean you enter the trade immediately, some some traders.

I know if they spot a hammer. Oh right now, that's a bullish camera. It's time to buy no candlestick patterns. They are not a trading strategy.

They are just simply right a tool right to help you get into a trade, provided all the other market conditions are made, so don't use candlestick patterns in isolation. They are, in my opinion, right most useful right to serve as an entry trigger to tell you when exactly to enter a trade when all other market conditions are met. For example, you know if you're trading in an uptrend, the price comes into an area of support, an area of value, or you have some fundamental reason right there. You think this market is about to go up higher.

Then candlestick patterns are useful right to tell you when exactly to enter a trade so useful as an entry trigger that's number four and finally number five candlestick patterns. I'm i'm not sure if you have studied those textbooks courses and stuff like that, is that there are a lot of patterns out there. A lot hundreds. I won't be surprised.

So you know: shooting star hammer, bullish, engulfing piercing, dark cloud cover, harami doji, that's just a fraction of what i've just covered and the key thing that i want to share is that don't try to memorize all these different patterns out there? You will burn yourself out and in fact, there's no need to memorize all these patterns right, i'm just going to share with you two things right to to pay attention to, and i can guarantee you that you don't have to memorize any other candlestick patterns ever again. Sounds good first thing: first, is this number one you want to ask yourself right? Where did the price close relative to the range? So you know a candlestick pattern. Has the open, high low and close? So where did the price close relative to the range? Because if the candle closed near, the highs of the range is telling you that this is a bullish sign right, the buyers are temporarily in control and if the price closes in the lower end of the range is telling you that the the sellers they are temporarily In control, that's why the price is closed, near the lows of the range and, if the candle closed in the middle of the range, that is pretty much undecided buyers and sellers, they are pretty much. You know in equilibrium right.

So that's the first thing right: where did the price close relative to the range? The second thing that you want to pay attention to is: is this: what's the size of the candlestick pattern right relative to the earlier candles, so, for example, if you, if you see one huge bullish, bullish, engulfing pattern and just form right - and you realize that you Know compared to the last five candles this candle is like so much larger. It's like two times larger. Then this tells you that there is likely conviction behind the move right. It's a huge candle right that has, you know, kind of like overpower over wrestle right.

The earlier candles right in in terms of the strength of the move. So that's the second thing that you want to pay attention to. What's the size of the candlestick pattern relative to the earlier candles, because if the size is let's say of similar size or even smaller net smaller than the earlier candles, then it's telling you that you know this candle is pretty much insignificant because it's telling that volatility In this market is contracting right, this candle is quite insignificant in the grand scheme of things. Okay, so quick recap to what we have this uh just just discussed today, number one.

When you use candlestick patterns right, you must take into consideration the ticket portion right when you're trading the forex market number two candlestick pattern. It doesn't tell you how the price has moved. It just simply tells you. You know uh uh from the open to the close right, where they close higher lower or around the same level.

Number three candlestick patterns or candlestick charts are not the only way to visualize or read the chart used to have bar chart line, chart, etc. Number four uh candlestick patterns are useful right as an entry trigger to get into a trade, but you shouldn't use this pattern right in isolation, meaning you don't see a shooting star and sell the market. No, don't do that and finally number five: you don't have to memorize every single candlestick patterns out there right the two things to pay attention to is you know where did the price close relative to the range and, what's the the size, of the candlestick pattern right? Relative to the earlier candles, okay, so with that's it, i wish you good luck and good trading. I will talk to you soon.

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