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Friday, 5 October 2018

3 Kinds of Candlestick Patterns That Are Not Always Accurate and Beneficial

On this occasion I will share tips for forex trading, binary options and stocks.

As many traders know, there are many kinds of candlestick shapes and patterns, which of course have different meanings and indicate the condition of market movements.
But too trusting and confident with candlesticks can also be an adverse boomerang.
Well here we will discuss about 3 types of reversal candlestick patterns that work worse than what many people believe or do not always meet expectations.
A candlestick reversal pattern is a candlestick formation that suggests or signals a reversal of trend direction in the near future.
This means that after the emergence of a candlestick reversal pattern is predicted to change the direction of the trend, and this is often used by traders to enter the market.
However, there are times when the signals indicated by some reversal patterns fail. That was predicted to be a reversal in the direction that the trend continued the previous direction

Well, here are 3 kinds of reversal candlestick patterns that are sometimes at risk of failing:


Bullish Harami:

  • The first candlestick must be a bearish candlestick
  • The first candlestick body must be bigger
  • The second candlestick must be a bullish candlestick
  • The second Candlestick body must be smaller
  • Its appearance is believed to be a change in the direction of the downtrend to up (Uptrend)
Bearish Harami:

  • The first candlestick must be a bullish candlestick
  • The first candlestick body must be larger or longer
  • The second candlestick must be a bearish candlestick
  • The second body candlestick must be smaller or shorter
In fact

But in reality the Harami pattern does not always indicate a trend reversal.
In the picture below, the appearance of the Bullish Harami pattern indicates a trend reversal (accurate).
But the emergence of the Bearish Harami pattern continues the direction of the rising trend so that the bearish pattern of Harami may be failed

2. Hammer

Hammer is a reversal pattern / reversal consisting of only one candlestick. It's easy to recognize a hammer candlestick.
Candlestick hammer has a tail/ long shadows and relatively short bodies.
For colors (bullish and bearish) it does not matter. Some experts believe that when a hammer candlestick appears there is a trend reversal.
For example the uptrend movement will be a downward trend when the hammer candlestick emerges, and vice versa.
Indeed, this has a point, but sometimes the appearance of a hammer candlestick does not always indicate a trend reversal.
Here's a reason enough not to trust Hammer's candlestick:
Retracement, during a strong trend movement, price action will occasionally show a backward movement, which is opposite to the general trend direction but only for a short time.
Such movements can bring up a hammer candlestick on the chart. So it's not an effective way of relying on a Hammer to predict a trend reversal.

3.Three White Soldiers

The emergence of this pattern is believed to be a reversal of the downward trend to an upward trend. And it can be used to enter the market by taking an open Buy position
Therefore it is advisable to avoid using the pattern above as a benchmark in making trading decisions. Hopefully this article can be useful for you and profit.Many traders believe that studying candlestick patterns is important. This is because candlestick patterns can indicate a reversal and indicate opportunities for profitable trading.

Harami is a pattern formed from 2 candlestick combinations, where the candlestick that appears is always smaller than the previous candlestick.

This pattern consists of three consecutive candlesticks, each candlestick opens and closes higher than before.
Keep in mind that not all candlestick patterns are as good, there are some that have a high chance of giving false signals.

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