There are many reversal candlestick patterns for forex swing trading but you don’t really need to know all of them unless you really want to confuse yourself then go ahead.
But there are only a few candlestick patterns that are worth knowing. And these reversal candlestick patterns listed here are easy to indentify and they frequently appear.
As a swing trading (or aspiring swing trader), it is in your best interest to know these candlestick patterns that are listed here.
Bullish Reversal Candlestick Patterns
The 5 bullish reversal candlestick patterns are :
- Bullish Engulfing
- Hammer(the colour can be both green or red, it does not really matter)
- Bearish Hammer(some traders call it the pregnant candlestick pattern…it is obvious why )
Bearish Reversal Candlestick Patterns
Now for Bearish candlesticks:
- Bearish Engulfing
- Shooting Star (the exact opposite of Bullish Hammer…as usual, the colour of this candlestick can be alos green)
- Bearish Harami(looks like a pregnant woman…the big green candlestick is the mother candle and the littlr red inside bar(candlestick) is the baby candle)
- Dark Cloud Cover
Why You Need Reversal Candlestick Patterns.
- First, when you use reversal candlestick patterns, you are now using price action to make your trade decisions. Price action is much more better than using a lagging forex indicator to get into a trade.
- Reversal Candlesticks, when they form around areas of support and resistance etc…they give you are good trade entry confirmation.
- You can use this reversal candlestick patterns and apply them in any swing trading strategy in this website where it can be used
as part of its trade entry rules.
- These reversal candlestick patterns when used in larger timeframes like the 1hr and upwards, give much more accurate signals.
Are Reversal Candlesticks Accurate?
No. Like all things in forex trading, nothing is 100% accurate. You see, reversal candlestick, the reason they are useful is that certain behaviour in the forex market price produces certain candlestick patterns. Now, if you go and do a historical analysis of these candlesticks, you tend to see a picture immerging regarding these candlesticks. You tend to see things like: “ok, when this candlestick formed at this level(maybe support or resistance level), price rose dramatically, or price fell”.
So then what happens is that you start to get a picture and feel of what to expect every time you see such a candlestick pattern forming. This is where reversal candleticks or other candlestick patterns become useful to forex swing traders.
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