The Only Candlestick Pattern pdf that will make you profitable

Here we will guide you, the most profit making chart patterns and this the Only Candlestick Pattern pdf that will make you profitable. Let’s get straight to it.

One of the favorite and most used candlestick patterns profitable traders like to trade with is the Engulfing candle. It is such a strong candlestick because it can give you the exact point of when a reversal is about to happen.

What is an engulfing candlestick?

Well, its basically explains itself in the name it’s a candlestick in the opposite color of the previous candle and it simply engulfs it a bullish engulfing candle opens at or is lower than the previous candles close and closes above the previous candles open so basically being bigger than the previous candle on both sides making it look as if it’s engulfing it.

Let me show you an example so here we found a pretty strong support where price bounced off it multiple times telling us it really respects it. We see the price comes back down to the support we can expect it to bounce back up but before entering we need a little more confirmation rather than just assuming the support will hold. That’s when we see a bullish engulfing candle it completely engulfs the previous red candle and is exactly at the support this is an extremely bullish sign and we can be pretty confident the price will go up from here.

So we enter the trade and look what happens now it’s also important to note that just because there is a bullish or bearish engulfing candle doesn’t mean the price is going to reverse in that direction every time. You shouldn’t be just trading purely off candlestick patterns you should be using them as almost if they were hints on which way the market is about to go. Pure decision makers you should be using other tools with candlestick patterns like support and resistances indicators different strategies etc.

Let see a bearish example so here we have the same type of setup a strong resistance where the price respected it multiple times before and we see the price comes back up and starts to slow down giving us a bearish engulfing candle completely engulfing the previous green candle we see that it got rejected at the resistance and there was a bearish engulfing candle indicating this is a good sign to go short. Here you look what happens price goes down.

Next we have the momentum candle the momentum candle is a lot easier to spot than the engulfing candle purely. Because of its size a momentum candle is simply a candle that is two to three times bigger than the previous candles. Before it this candle can be insanely powerful because most of the time after it happens the price will continue to go in that direction making this point a great time to enter.

More detail about the Only Candlestick Pattern pdf that will make you profitable

The most efficient and effective way to use this candlestick pattern is in choppy markets where the price is moving sideways.  If you ever see a sideways market then a huge momentum candlestick appears being two to three times bigger than the previous candles. You can be pretty certain that the price will continue in that direction.

Why is that?

Well think of it like this whenever there is a sideways market there are a lot of Sellers stuck in their trades they don’t want to exit their trade yet because the price is moving sideways and it can honestly still move in either direction they draw their support and resistance and set their stop losses right above the support. So that means they’re going to be tons of traders setting stop losses all over this area meaning if there’s a sudden price movement and price hits this liquidation zone all these stop losses will be hit just adding fuel to the fire for this price to keep moving up.

When trading in a choppy, sideways market, one useful strategy involves looking for a huge red candle that is two to three times larger than the preceding candles. This large red candle is a strong indicator to enter a short position because it suggests the price will continue to move downward.

Next is Multiple candlestick pattern

Next, we have the multiple candlestick pattern, which is a favorite of mine due to its reliability on charts and simplicity. This pattern occurs when you see three or more candles with wicks pointing in the same direction. The more candles with such wicks, the better. I prefer to pair this pattern with support and resistance levels.

For instance, consider a chart where there’s a key support level that the price bounces off multiple times. You may see multiple candles with downward wicks at this support. These wicks indicate that sellers are trying to break the support, but buyers consistently strongly matches them, confirming a strong support level with a good chance of the price bouncing upwards. The more candles, the higher the probability that the price will respect this pattern.

Here are some Tricks to Choose bullish stocks 

Let’s go over an example of a short position. If the price moves up to a resistance level and multiple candles have upward wicks, it signifies that the price doesn’t want to move higher. This gives us a good short entry point, expecting the price to reverse. As expected, the price often does reverse.

Next, let’s talk about the Doji candle.

A doji candle has a very thin body with wicks on each side. This candle is significant because it indicates that the market is uncertain about its direction and is experiencing resistance. When there is market uncertainty or resistance, the price often reverses in the opposite direction.

For example, if the price is moving down and a green doji candle appears, it suggests that sellers are losing confidence and buyers are entering the market. This makes it a great potential entry point. Typically, I wait for two more candles of the same color after seeing a doji to confirm the price reversal. For instance, if I see a green doji followed by two more green candles, I can confidently enter a trade, expecting the price to continue upward.

There are several variations of the doji candle, including the regular doji, the long-legged doji (with longer wicks), the dragonfly doji (with a small body and a big bottom wick), and the gravestone doji (with a small body and a big upper wick). All these variations indicate a potential price reversal.

Next very important is Hammer Candlestick pattern

Another important candlestick pattern is the hammer. The hammer has a decent-sized body and a long wick. It indicates that sellers pushed the price down, but buyers absorbed the selling pressure and raised the price back up. This is a bullish sign, suggesting that the market will continue upward. The shooting star is similar to the hammer but has a small wick on the opposite side. You should treat it like the hammer, expecting a price reversal when you see it.

The tweezer pattern consists of a red candlestick followed by a green candlestick, both with similar wicks on the bottom. This pattern indicates that the price respects a support level and is likely to move upwards. For example, if you see a red candle with a bottom wick at support followed by a green candle with a bottom wick, it suggests the price will gain upward momentum. Conversely, for a bearish signal, look for a green candlestick followed by a red one, both with wicks at the top.

The final candlestick pattern A Marubozu

The final candlestick pattern I want to discuss is the marubozu. A bullish marubozu is a big green candle with no wicks, essentially a big green rectangle. This pattern is a strong indicator that the price will continue in the same direction. You usually see this candle in the middle of a trend, confirming that the trend will keep moving upwards.

For example, after a price reversal, if the price starts moving upward and you see a bullish marubozu, it means buyers have complete control, and you can almost certainly predict that the price will continue to rise. Similarly, a bearish marubozu is a red candle with no wicks, indicating that sellers have control and the price will likely keep moving downward.

Here’s a bonus tip: It can be hard to remember all these patterns or spot them on charts. Luckily, there’s an easy way to have your chart tell you where a certain candlestick pattern occurs. On TradingView, click the indicators tab and type in the name of the candlestick pattern you want to find, such as bullish engulfing. TradingView will then notify you on the chart when that pattern appears, making it much easier to spot.

Conclusion

I hope you found this helpful and learned something new! If you did, I’d really appreciate it if you could like this explanation. The only problem with trading using candlestick patterns is false breakouts, where the price does the opposite of what the pattern predicts. To learn how to avoid false breakouts, check out my secret strategy in the next part of this guide.