The Top 10 Candlestick Patterns to trade the markets” is a guide that I have created for trading the markets. This is a free guide that I have put together in hopes of helping investors make better trading decisions. This is not a get rich quick scheme. It is simply a list of technical indicators and trading tools that I use on a daily basis to increase my profit margin. If you truly want to become a successful stock trader, you must be willing to put in the work to learn the market.
The first pattern we will look at is the Engulfing Pattern. This is a bullish pattern that can be used to create a stock or market bubble. In order to do this, you must be able to spot an inexpensive low probability high return stock while it is still priced at a reasonable price point. This is a high risk strategy and should only be attempted by those with experience. However, this is a wonderful place to pick up an inexpensive stock at a cheap price.
Next on the list are the Engulfing Candlestick Patterns. Again, this is a bullish pattern that can be used to create an explosive jump in price for the stocks or in the market as a whole. Once again, this is a high risk strategy but can pay off huge if you can find an inexpensive low probability high return stock while it is still priced at a reasonable price point. The problem is spotting these inexpensive stocks while they are still priced at a reasonable price point. The candlestick patterns that I like to use for this method are the Bearish Engulfing, the Engulfing Bearish and the Engulfing Bull.
Finally, we come to our second pattern which is called the bullish Revolving Candlestick Pattern. This is the exact opposite of the Engulfing Pattern discussed earlier. Here, the bullish Revolving Candlestick Pattern re-confirms that the stock has overbought at a reasonable price point and has dropped down in price after the pattern completes. This is not the recommended style to trade stock that is in the process of rising. If you are going to trade these type of stocks you must wait until they have fallen to the lowest prices first, then you can begin to trade aggressively with a longer term strategy. Always know that you will need to enter the market and exit before the trend reaches the peak or the reversal point.
As with the previous bullish candlestick pattern we will look at the Engulfing pattern. The pattern is formed when you take out a long position on one stock that is quickly reversed. It’s best to sell short the stock that is in this pattern before the reversal occurs. The reversal could come at any time, with the stock just needing a small price gain to break out of the pattern.
Last but not least we will look at the Ascending Candlestick Pattern which is formed when a stock is quickly reversed into a long position. This is the exact opposite of the previous bull market chart pattern. The stock will be falling for a short period before reversing itself to a long position. This is the stock that you want to invest in during the bull market.
So what do you think about the top 10 best candlestick patterns? Are there certain rules that apply to them? I would say that there isn’t a single pattern that is right for every stock. In fact, there are probably more than one that applies to you personally.
In order to find the top stock pick for you it is important to understand the psychology behind candlesticks. How a stock has been behaving over a given period of time is just as important as the pick of stock. For instance, if the stock is behaving very poorly and you invested in it you may get burned. There are certain psychological factors that can cause a stock to behave in a way that is unfavorable to you. Knowing these factors and understanding them can help you make more money with your trading.