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The Most Profitable Candlestick Patterns in Trading

zebrablog.net - In using Technical Analysis, many traders choose Candlestick charts (paraffin charts) to show prices. This chart type was found by Munehisa Homma, a rice trader in Japan in the 18th century. Candlesticks are usually used for short-term trading, so they are more suitable for traders to use. There are many candlestick patterns. Well, some patterns include patterns that lead to more profit than others. The next post will discuss the bottom pattern of the candlestick, and 4 candlestick patterns that are very potentially profitable. Also reviewed the method of use.

Candlestick Bottom Shape

The shape of the candlestick shows the initial price, closing price, highest price and lowest price. The shape of the candlestick looks like paraffin. There is a body (body) and an axis (shadow or wick).

Candlesticks use 2 colors, for example a mixture of blue or green and red or a mixture of white and dark.

Blue or green patterned candlesticks prove that the closing price is greater than the initial price (the price is rising). On the other hand, a red or dark color indicates that the closing price is lower than the initial price (the price has fallen).

There are many candle patterns, but from my personal observation there are some candle patterns that are potentially more profitable than others, namely:

1. Marubozu

This Marubozu candle pattern is formed when there is a full body without shadow. This form carries the address of a very confident market. Generally, the established trend will continue. There are 2 types of Marubozu, namely Marubozu White (bullish) and Marubozu Black (bearish).

2. Doji

This Doji candle pattern is a very frequent and very easy to find reversal pattern, it is a type of candlestick where the initial price is the same or almost the same as the closing price, as a result only a flat line appears in the middle of the shadow. Doji generally prove that there is a trend change, either bullish or bearish. So you need to be careful if you experience a Doji.

The presence of a Doji candle indicates that there may be a retrogression of expectations. Continuing to be far from the end of the doji, perhaps the retrogression of the ideals continues to be solid.

3. Hammer

The Hammer candle pattern is a form of a candle that is like a hammer. His distinctive characteristic is that there is only one shadow. Generally a symptom of reversal. The opposite of the Hammer candle pattern is the Inverted Hammer. This pattern is also generally a symptom of a reversal.

4. Engulfing

The Engulfing candle pattern is a fairly strong reversal symptom. In English, engulfing means to cover. The characteristics of this pattern are indicated by a short candle and accompanied by a longer candle so that the high covers the first candle. There are 2 types of Engulfing patterns, namely Bullish Engulfing (upward reversal ability) and Bearish Engulfing (downward reversal ability).

In Bullish Engulfing, the rising candle covers the down candle. On the other hand, in Bearish Engulfing, the opposite occurs, the descending candle covers the rising candle.

Like those 4 candlestick patterns that are very potentially profitable. The determination of the candlestick pattern is based on the experience and subjectivity of the author. This candlestick pattern is not definitely suitable for you. So you have to try it yourself and determine which one is suitable for trading.

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