Candlestick patterns

Hi guys I'm new to BO trading but have been lurking on the BO.net site/forums for a while! Well, I've not traded any real money as such - merely learning the concepts of BO. I've downloaded MT4 through Oanda and set up a demo account on Marketsworld so far.

So far I have watched BryanMac's beginner videos on YouTube and got my MT4 set up in a way that makes sense (to me).

The trouble is, I'm finding it a little hard to interpret candlestick patterns. I want to use them and a combination of technical analysis indicators in MT4 to interpret when to trade.

Does anyone have a candlestick patterns for dummies kinda guide I can check out? The page on Wikipedia of all sites seemed the most helpful to me but it's not really descriptive on some pattern formations.

Thanks.

Comments

  • lotzofbotzlotzofbotz Posts: 1,552 ✭✭✭✭
    edited June 2016
    candlestick patterns alone are indicative of price action at best. I would say you need far more tools in your box to trade then just that. Because if you are looking to use them to make money in binary options alone that would be problematic..
  • RM1RM1 Posts: 9
    Yeah I'm not using just the candlestick patterns alone. I'm also working with some technical indicators in MT4 so I can better predict what might happen next.

    I just need some information on the different candlestick patterns and what they mean.
  • ehenderichsehenderichs Posts: 22
    Well there actually is a Candlestick Charting for Dummies book from Wiley
  • The_Geek_MHThe_Geek_MH Posts: 643 mod
    Candlesticks are a tough nut to crack, at first. The number one thing to remember is to view the candlesticks relative to the rest of the candlesticks on the chart.. if they are unusually large they are a real signal versus a possible signal that occurs when they are only normal size. The number two thing to remember is where they appear relative to the chart... if the signal in question forms in the middle of nowhere, ie far from support or resistance or trend line or moving average, they aren't so strong, if the signal forms at/near/on a support/resistance/trend line etc they are much stronger. Also, using a tool like MACD or stochastic to get additional confirmation is good too.. a candle signal with no confirmation is not strong, one that occurs while stochastic is firing a strong signal is a good signal.

    here are some links to articles on the BONET website that should help....

    http://www.binaryoptions.net/blog/candle-charts-getting-the-big-picture/

    http://www.binaryoptions.net/blog/candlesticks-the-basics/


    http://www.binaryoptions.net/blog/introduction-to-japanese-candlestick-charts/

    http://www.binaryoptions.net/blog/trading-doji-signals-with-binary-options/
  • RM1RM1 Posts: 9
    Thanks for that, very useful links!
  • OkaneOkane Posts: 1,279 admin
    I would spend more time learning how to draw S/R lines based on candlestick history.
    However, something you must understand about candlesticks is opening and closing price, candlestick volume and
    candlestick shadow/wick. If you understand why a candlestick gets candlewicks it will help you understand price action and what the candles are trying to say.
    You don't have to learn 100's of Japanese Candlestick names and formations... The ones you will notice most often are pin bars and dojis and you don't even have to know these names to understand what they mean if you understand candlestick wicks, as I mentioned above.
    Anyway, never ever trade just based on candlestick formations. See the bigger picture! Trends, support resistance areas, asset patterns,
    timing and of course, you need experience!
  • RM1RM1 Posts: 9
    Thanks. Yeah I understand about opening and closing prices etc. I just wanted to learn more about patterns. Like what do two or three particular formations mean, and how I can use that information to take a calculated risk for my next stake.
  • The_Geek_MHThe_Geek_MH Posts: 643 mod
    Unfortunately, learning 2 or 3 patterns isn't enough... there is no guarantee those patterns will appear in a timely fashion for trading, you need to know candles in general, and how to apply what you see to other forms of analysis, and then make an educated decision about price direction.
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