8 Candlestick Patterns That Matter

When it comes to trading price actions, finding opportunities in the market by looking for candlestick patterns is one of the best ways to go about it. Candlesticks represent price and they show all data points at one glance. Candlestick trading strategies involve determining the timing of market entry based on high probability patterns and managing the trade according to some predetermined rules that conform to your money management policy. Since Japanese rice traders developed the Candlestick by incorporating open, high, low and closing prices, traders have identified a number of patterns that offer high probability trading opportunities. Candlestick patterns come in different sizes and shapes. There are single period candlestick patterns like the pin bars, but also, you can find patterns that involve more than two bars, like the Three White Soldiers. However, not all patterns offer the best win rate in Forex. We have identified eight major candlestick patterns that actually work in Forex. Let’s take a look at how you can benefit from identifying these patterns and develop trading strategies around them. Pin bars are the most effective ways to trade candlesticks as these formations tend to create high probability price action trading setups. A pin bar forms when the price goes up or down during a single time period, but the closing price remains within the previous bar.