Helloooo! 
I’ve been trying to focus and examine my charts, and I notice that I’ve become more aware and cautious of the candlestick patterns I find. 
I’m not sure if it’s a waste of time because I hardly see anyone here talk about candlestick patterns. 
Does anyone here have particular candlestick patterns you watch out for or do you completely leave it out of your trading strategies? 
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The two I find most helpful are pin-bars (no surprise: long wicks = price-rejection) and morning/evening stars (less obvious?).
These and Bob Volman’s “double doji breakouts” are all I look for, really.
You?
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I never look at them.
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Candlestick patterns are my next step in trading. You can read about Toby Crabel and how he use it on charts. In general, if you want to use it, you have to do research, what works and what doesn’t work.
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My favorite one is the pin bar, but also the engulfing and inside bar when you have a good understanding can be profitable as well
They are not always easy to spot and for the inside bar you need to be aware of the false breakout and how to spot it but when you spot all of these at the right spot with some confluent can be really nice
When you understand what they say and what they reveal about the market, it’s so interesting. For my part i can’t try another way to trade without that
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Hi @ria_rose, pattern is one of the important thing to get confirmation.
Different instrument will show different form of pattern. For example hammer and pinbar one of the common pattern can be seen during reveral. The statistic is about 60% overall major pair, but on EURUSD it’s considered high base on my back testing around 2021.
If you can identify market structure before, it will be a lot more useful compare to using candle stick pattern.
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I really do not think they are a valid indication, though they are not bad for confirmation at least.
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By trading a pin bar break, you’ll be shorting at the worst price at the time. The best place to short is when the bar is a full solid Bull candle.
Three Crows and three soldiers. Basically, if the last 3 candles are all moving in the same direction by a reasonable amount then we might be heading that way for a bit longer.
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There’s got to be better quantitative reasoning than that. Are there any statistics to prove those patterns will outperform random entries?
After three crows signal the market may be over extended past fair value and about to turn around.
If I looked out for such a signal I would be patient and wait for a pullback before entering.
As for me.
I don’t bother with candlestick patterns because they all depend upon timeframe settings. Either buyers are in control, sellers are in control or market is in balance. No candle stick pattern will tell me this information.
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When you understand the psychology behind the candlestick, it’s tell you a story for what’s just happened, and when you can combine this with some confluence(the trend, fibo at the reversal point, support etc) it’s give you enough confluence to take position and understand who control the market
but you are right, if you try use every single candle or candlestick pattern alone, it will not work, like if you see a small bearish pin bar in an uptrend with no key point ,HH/HL support/resistance, trend line MA etc. your chance of a reversal are not high and you must have to wait for a good setup and follow the trend instead to try to short the market and fight the trend
When you perform statistical analysis on the forex markets you find that they conform to a “random walk”. The best you can get out of any sort of number crunching is that the markets may go down or up by a small or large amount. You can put percentages on the size of the move but up or down is 50/50.
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A candle stick on a chart doesn’t have any psychology as it is not a human.
Statistics tell us that the market likes to find balance. And if three large candles have driven price in the same direction then statistics tell us it is time for a pullback.
Trading is a business of statistics not psychology.
All subjective. Buy at support or sell at support. Same EV, same odds. Same outcome. No historical price action can carry any predicability. If it did, a two-way market wouldn’t exist.
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So you think than all trader in the world trade emotionless ? Of course is not all of the part but in fact it have a psychology behind this than we cant avoid, and its good to understand it and use it at your advantage
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Yeah i agreed with you, trading its a work probability nobody can predict what’s will happen we just react at what we see, and when we have more probability to win we enter in the trade
Patterns I look at are:
Institutional Funded Candles - extreme engulfing candle for hidden supply and demand
Morning & Evening Stars which include Morning Doji Star and Evening Doji Star variations
Master Candle Pattern
Pinbars depending on where it forms and how it closes
Aside from the named patterns, I like to watch for exhaustion and momentum candles. I also look at what I call a ‘rejection-momentum’ candle pattern which is a pinbar followed by an engulfing.
Qualify your patterns based on where they print, formation, and overall context, because not all patterns are created equal. An example would be using location and context to distinguish between rejection and leading wicks. Wicks that forms in the right place may be a true rejection but if formed in the wrong place it may be a leading wick that is likely to be filled.
Sorry, but I never claimed traders are emotionless.
Instead I claimed that candle sticks being just graphics on a computer screen representing 4 pieces of data (open, high, low and close) and in particular the topic I was responding to was a candle stick pattern of 3 large bullish or 3 large bearish candles together, being that they are still just essentially computer graphics representing data on a screen in themselves are not psychological.
Psychology is related to how we as humans think and act. The 3 crows signal only has psychological effect on people who are looking for that particular pattern and have trained themselves to respond in a certain way when they see it.
Other traders not seeking a 3 crows signal will not be effected psychologically by the same signal. It is a personal response only.
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Exactly.
And exactly the same four items of information displayed (in a different format) by bars as well as candles. Bars just put the visual emphasis on something objective (highs and lows) rather than on something user-defined (opens and closes) and some people prefer them for that reason.
Beginners, marketers, websites, Youtube channel owners, PDF’s and promoters generally prefer candles, these days.
More successful career traders, institutions and a few other people are generally still using bars.
Steve Nison hasn’t really helped many people but is nearly as good as Mark Douglas was at persuading people that he could, and indeed had done.
“You pays your money and you takes your choice”.
Exactly. 