Some of these candlestick patterns can help you to determine the market movement of asset prices in forex trading. Curious to see until the end.
Candlestick Patterns for Open Buy Positions – In forex trading there are certainly many things that must be observed, one of which is technical markers that can indeed ensure your next action in carrying out trading.
But even though you have used these various indicators you still feel confused about the method of reading them.
Therefore you may be required to understand with various candlestick patterns to ensure open long positions in forex this time.
Candlestick pattern is one of the things that can share you data that can directly ensure open long or short positions with the encouragement of this candlestick chart.
Why candlesticks can ensure open buy / sell positions on forex, because this chart proves price movements and trading volume in the market directly.
To that end, this review will review candlestick patterns to open long positions in forex, especially for newcomers who will be presented in the post below.
Let’s follow it completely!
Definition of Candlestick on Forex
Candlestick is one type of price chart not only in stocks, but also in forex trading. Where this chart is used in technical analysis that displays the highest, lowest, opening, and closing prices of a stock in a certain period of time.
The candlestick chart itself has 2 main components that you should know, including the following:
- Body: This part is the part that can prove the opening price and closing price in a period, which is directed in the form of a square that has a variety of colors, such as red and green or white and dark.
- Shadow/Wick (Candle Tail): On the contrary, the tail of the candle is the part that proves the highest and lowest price of a period, which is directed in the form of a straight line that stretches at the top or base of the candlestick body that has the same color like paraffin.
Notes: Not only that, there are some colors used in candlesticks, namely red which means bearish( price depreciation) and green which means bullish( price increase).
Methods of Using Candlesticks to Open Buy Positions in Forex
There are some methods for using candlestick patterns to open long positions in forex trading, some of these methods are:
- Open buy when the pattern has not been created completely. To open buy using the candlestick pattern at the beginning can arguably have a big effect, because you do not recognize whether the pattern has really been created entirely or can just share a false signal.
- Open buy when there is a breakout at the closing price of the last candle. Compared to the initial method, this second method certainly has a lower effect, because with this method you have recognized the candlestick pattern about to be established.
- Open buy when the price on the last candle breaks the highest level. The last pattern has a very low effect when compared to the previous method, because with this method you want to open a long position when a true breakout is established, where a formal pattern has been created and you can estimate price movements quite accurately and efficiently.
Types of Candlestick Patterns to Open Buy Positions on Forex
Now that you have recognized what candlesticks are and methods of using candlestick patterns to open long positions in forex, it is time to review some types of candlestick patterns to open long positions in forex, especially for newcomers. Among others as follows:
1. Bullish Pin Bar
The initial candlestick pattern is a bullish pin bar. This pattern has a shape similar to the shape of a hammer, where the candlestick body is at the bottom or at the top with a fairly long tail.
This bullish pin bar pattern is one of the candlestick patterns that indicate a reversal pattern is about to occur.
This chart can ensure you to open long positions in forex, if when coupled with some markers such as body dimensions not greater than 50% of the entire candle, the tail dimension above the candle is small or even absent and continues to be small body dimensions, so that it will continue to be an accurate signal given.
2. Bullish Piercing
The bullish piercing pattern is not only found in the forex market, but in the stock market there is also a designation for the bullish piercing pattern. However, this pattern often occurs in the stock market than in the forex market, because the forex market tends to be more liquid when compared to the stock market.
3. Bullish Engulfing
Bullish engulfing is a candlestick pattern consisting of 2 candles where the second candle has a larger form than the initial candle. Therefore, this pattern is pronounced bullish engulfing which means that the pattern seems to swallow the initial candle.
Usually this pattern has a greater degree of accuracy when compared to the candlestick patterns that have been described earlier, but it must also be confirmed using other technical markers.
4. Morning Star
You may have heard of the evening star pattern, now the next pattern is a pattern of the evening star pattern reversal called the morning star pattern.
This pattern consists of 3 candles A, B and C where the color of candle A is bearish which is indicated by red or dark color, B is doji and vice versa C is bullish which has white or green color.
5. Three White Soldiers
Three white soldiers is the opposite of the three black crows pattern, where these two candlestick patterns illustrate a strong reversal signal, consisting of 3 white candles that appear in a row.
Closing
Like that was a complete description of overwriting candlestick patterns to open long positions in forex complete along with the types and tricks. Hopefully, this data is useful for you in expanding your knowledge in the world of forex trading to get optimal profits and become a professional and professional trader.