5 Candlestick Patterns Every Daytrader Must Know
Successfully trading the forex market requires diverse skills and experience. Price action trading is very much profitable since they provide much more accurate and reliable signal to the forex traders.
Professional day traders follow candlestick confirmation pattern in the key support and resistance level to find out high probability trades in the financial market. The five most common reliable candlestick pattern followed by professional day traders are:
- Piercing pattern
- Evening star
- Bullish/Bearish Engulfing
- Dark Cloud
Figure: 5 most common candlestick patterns
Successfully trading the forex market can be intimidating for the new traders since they ignore the power of raw price data. The key advantage of trading the forex market with candlestick pattern lies behind the accurate execution of the trading plan.
Figure: Trading the EURJPY with price action trading strategy
In the above figure, professional day trader entered shortly in the EURJPY pairs with bearish engulfing pattern printed near the trend line resistance. The trader uses tight stop loss while trading with these reliable candlestick patterns. Generally, stop loss is placed just above or below the confirmation candlestick pattern depending on the trade. While trading with price action confirmation traders should choose to trade in the direction of least obstacles to maximize the profit.