Hello all. I have a small doubt regarding single candlestick patterns. We know that hammer and the inverted hammer are bulllish reversal candlesticks whereas the hanging man and shooting star are bearish reversal candlesticks. But what is the case if we encounter a hanging man or shooting star in a bearish trend or if we encounter a hammer and inverted hammer during a bullish trend? Do they signify something or should they just be ignored? Please clarify this one.
Thanks in advance!!
Trend takes precedence over 1-day candlestick patterns like hammers.
For example, according to Thomas Bulkowski, a hammer works best when it prints in a downward retracement in a primary uptrend, clearly better than in a primary downtrend. So take care - although they have gained a reputation as a reversal signal, its most useful as a reversal back INTO the uptrend from a pull-back.
Be aware also, he does say hammers ain’t much use anyway. But how much should you expect from a single candlestick pattern?
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IMHO, whatever candlesticks pattern doesn’t matter. A break above the high of a candlestick is bullish and a break below the low of a candlestick is bearish. The other end will be the immediate MINOR support or resistance.
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As with most other signals, higher time frames work best, but with candlestick patterns, the weekly and monthly in particular are very powerful! My favourites are a nice long pin bar off a S/R or supply /demand zone and engulfing, again off those turning points.
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why do you think so about weekly and mothly patterns?
if there is a bullish trend then hangng man and shoting star are the candles, while if a bearish trend then the same style candles called hammer and inverted hammer dont be confused
Candlestick patterns are really important for a trader as they are the first thing that helps you to decide what is going to be happened with the price of a currency pair in the recent future. So, you need to know the patterns in order to get something viable out of them.
Exactly my sentiment once it’s a full close above bullish
Below the low bearish
Higher TF paint a better clearer picture of where price is going I really dont look below the daily , well maybe for entries