Candle Patterns Knowledge

How to Use Candle Patterns in Trading

Candle patterns work best when combined with trend direction, volume, support/resistance, and market structure. Here’s how traders practically use them:

1. Always check the trend

Candlestick patterns give reliable signals only when aligned with the trend.

In uptrends, look for bullish continuation or reversal patterns.

In downtrends, look for bearish confirmation.

2. Use with support and resistance

Candle patterns at key levels are extremely powerful.
Example:
A bullish engulfing at support is much stronger than a random bullish engulfing in the middle of the chart.

3. Confirm with volume

Volume tells the strength behind the candle.

A reversal candle with high volume = strong signal

With low volume = weak signal

4. Combine with market structure

Understand whether the market is in trending, sideways, or breakout mode.
Patterns behave differently depending on structure; for example, hammers in a sideways zone might not work as well as hammers in a trending market.

5. Avoid trading based on a single candle

Candlestick patterns are helpful but should not be used in isolation. Combine with indicators like RSI, MACD, moving averages, or tools like volume profile and price action.