What are patterns?
patterns takes two to be identified. A pattern is characterized by a candle whose body, the open and close engulfs the previous candle’s body. Conversely, a pattern is characterized by a candle whose body engulfs the previous candle’s body.For more validity, if the candle’s high and low engulfs the previous candle’s high and low, the pattern is found to be more valid. The chart below shows different examples of various and patterns. In the example chart below, we also point out a false or an invalid pattern. It is false due to the fact that the open and close (the body) of the second candle does not completely engulf the open/close of the previous candle.
Why are patterns formed?
An patterns are usually identified near the tops and bottom. They exhibit extreme market sentiment. In other words, a pattern tells us that the buyers have overwhelmed the sellers in the market, thus the entire previous day’s open and closing prices. Conversely, a pattern tells us of the sellers overwhelming the buyers and thus indicative of a drop in prices.
patterns can be traded as a reversal pattern when found at the tops or bottom of a short term trend and validated by support or resistance levels. When an candle is formed within a trend, they are to be traded as a continuation pattern.
When used with this gives a very interesting results and I have observed over 80-90% of ITM .
How I trade::
See the if its above zero line and bar sticks are still in green I see for red candle and candle. Next candle I enter the trade for the expiry of 1 candle. This has given me nice results.
You can reach me directly on Telegram @JTFX1 let's talk about... As I have no means of reaching you directly...