6.1 – Candlestick patterns
The candlesticks are used to identify trading patterns. Patterns, in turn, help the technical analyst set up a trade. The designs are formed by grouping two or more candles in a specific sequence. However, sometimes powerful trading signals can be identified by just a single candlestick pattern.
Let’s learn more about them in this video.
Let us move on to understand single candlestick patterns in the following video.
We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- History tends to repeat itself – we modified this assumption by adding the factor angle.
- Candlestick patterns can be broken down into single and multiple candlestick patterns.
- There are three critical assumptions specific to candlestick patterns.
- Buy strength and sell weakness.
- Be flexible – quantify and verify.
- Look for a prior trend.