I havent really studied japanese casndle patterns in whole lot of depth but, there is a point worth mentioning regarding which kind of candle is the strongest signal.
The one where the price was traveling in the right direction when the candle closed.
Illl elaborate.
Take a shooting star candle long wick above the open and close prices. obviously potentially a reversal signal on an uptrend right ? Maybe …
Scenario 1
Open Price.
Price rises a lot to the high.
Price then falls a lot to the low.
Price then rises a little bit to create the close.
So what do we have here ? candle has a long high wick, open price is above the close price, candle looks like a whole lot like a shooting star, bearish reversal signal, but there is one thing going against it as being a perfect shooting star reversal. the price was RISING when the candle closed.
Scenario 2
Open Price
Price falls to the low
Price then rises a whole lot all the way to the high
Price then reverses almost all the way back down to the low and the candle stops because it is closed
So now what do we have ? Do you see the difference ?
Shooting star candle lookis identical to the first one, nice shooting star, bearish reversal signal BUT this time the price was falling at the time of the close. Big difference.
So unless you watched the candle form, how do you know this happened ? You dont.
But the lowest time frame chart does.
That is a rather simplified explanation of the price action it obviously doesnt go exactly like that open to high to low to close it jumps around back and forth during the formation of the candle but the main point still holds true, the signal is stronger if the price is moving in the right direction when the candle closes.
Edit: What I tried to do in this post is make the connection between the price action itself, and the candle, once you make this connection in your heard you will see it doesnt matter what the candle looks like, you will know what kind of price move caused it and therefore understand what its significance is.
As for your original question I could elaborate things a lot further to explain why there is no difference in significance between shooting star and hanging man , or between inverted hammer and hammer, but that might over complicate things so I’ll refrain from doing that, but I will say, although they look different it is only because the open and close prices happend to fall in different places during what would be, the very same type of price move.
if you are not getting confused already read on ill go into some detail even though i said i wouldnt lol
This section of my post is really for those who have already made that connection between the price action and the candle so can see by looking at the candle what the price move probably was that caused it.
I have said this before to some critisism but I still stand by it, the open and close prices are largely irrelevent to the price action, the last time I said that I knew it but I couldnt really explain why, well now I can so I will.
The reason why they are largely irrelevent, is because they fall in and out of sync with the price action. This is why you see different types of candle refecting the same thing.
Imagine a scenario you are by the ocean, the waves of the ocean do their own thing, you have no way to change what they do, the ocean makes waves when ever it wants to, but in a fairly regular way.
You could take a stop watch and time the troughs between the waves.
if you did this you might find for a while the troughs arrive every 10 seconds, so you make a ten second chart of the waves.
So from then on every 1/10th of a second you plot the position of the wave height on a candle chart and start a new candle every 10 seconds
For some time the troughs would continue to arrive at the ten second interval and so the low would be close to the beginning of the candle the high would be reached halfway through the life of that candle, then the decline down to the next trough would be arrived at close to the original open position of that candle, but as the ocean is not geared to your stopwatch, the troughs would gradually start to fall out of sync with your ten second intervals and no longer arrive at the right time for them to be at their low when each candle starts.
Do you see where I’m going with this ?
Timeing the forex price action to a chart and expecting the price action to behave according to the time periods of the candles is like timeing the arrivals of the ocean waves and expecting them to consistantly behave according to the 10 second chart you made.
If the forex price action did behave according to the chart you would have a shooting star at almost every peak because the price action has to climb to the peak and then fall, the reason why there is not a shooting star at every peak is because the only time there is one, is when the open and close price of that candle happened to fall into sync with the price as it was rising then subsequently fell.
The candle opened when the price was rising and stayed open while the price peaked then continued to stay open until it reversed all the way back down and ended with its close price near to the open price.
The same price move could occur when the price action has fallen out of sync with the chart. In that scenario you would get, a different effect, the candle might open then the price rises towards the peak, this may take most of the time of that candle, the price peaks then starts to fall, but not as far as the open price, so now even though the price did exactly the same thing as before, you are left with a somewhat average looking bullish candle with the close price somewhere above the open.
The price action oscillates and the candle patterns only work correctly when those oscillations fall into sync with the time frequency of the chart.