In this video I show you which candlestick patterns I personally use in my trading for pinpointing my entries. I use Bullish and Bearish Engulfing patterns as well as the hammer and shooting star.
We have previously introduced our followers to a few candlestick patterns; The Hammer and The Shooting Star, but we wanted teach you about some other candlestick patterns we use in our trading and they are the Bullish Engulfing and Bearish Engulfing pattern.
In the video above we teach you about the pattern themselves but more importantly about where and when to use the candlestick patterns. These patterns are for short term analysis only and are also known as entry signals. They appear many times so you have to pin point the time you want to take them into consideration for example, at support/resistance or at pullbacks in a strong uptrend.
Chart Analysis Comes Before Candlestick Patterns
It is important to understand that Chart Patterns take precedence over Candlestick Patterns. Candlesticks are only 1 bar whereas a chart pattern is made up of many bars. What can you use this information for? Well for example, if price has broken out of a Flag Pattern and forms a Candlestick reversal pattern shortly after, you might be better off by “ignoring” that pattern as the Chart Pattern is likely to “win”.
As mentioned in the Support - Resistance article a powerful trading signal can occur if for example support is broken but price then rallies back above support. This signals that there are no sellers left in the market/stock. This can occur over many bars or 1 bar. If it happens over 1 bar and if price breaks below last swing pivot low but then rallies intrabar and closes positive price would then have created a Hammer with the low being below support but close above support. A great entry signal with a small stop. This provides you with a great risk to reward.
Day Trading Support - Resistance
Day Trading using support / resistance is one of the best ways to consistently beat the market. Learn how to spot those important levels for high odds entriesLearn more