The Japanese candlestick pattern is an effective support tool for traders when they need to analyze price movements. Professional investors just need to look at the change in the candlestick pattern to predict how the market will move. From there, they’ll plan an appropriate investment strategy according to the trend. To know how beneficial it is, please read my series of making profits in week 2 on the Olymp Trade platform.
Analyze market movements from January 10 to January 14
First, we need to analyze the progress of the week from January 10 to January 14 to get a general view.
Last week, the news of Nonfarm came out in favor of the USD but the price did not react strongly. Maybe, in this week prices will start to digest the news, causing the USD to start rising. So I will have a trading plan with the 3 currency pairs EUR/USD, GBP/USD, AUD/USD as follows.
Short-term: I still wait for bullish retracements to open UP orders with Fixed Time Trade during the day. If the main trend is still down, consider opening a Forex order to maximize profits.
Mid-term: watch for nice entry points to open more Forex orders DOWN with Gold this week.
Review of trading orders in week 2 at Olymp Trade with candlestick pattern
Trading currency pairs: EUR/USD, GBP/USD.
Order 1: Opened an UP order when the Morning Star candlestick pattern appeared at the end of the downtrend.
Order 2: The downtrend started showing signs of slowing down when many bearish candles with small bodies were formed. Opened an UP order when the Outside candle was confirmed, signaling that the trend was about to reverse from bearish to bullish.
Order 3: The price broke the support level to create a new downtrend. But the sellers could not push the price lower so I opened an UP when I saw the Morning Star candlestick pattern appeared right there.
Winning 3 orders in a row made me feel extremely excited. That could cause me to make incorrect decisions on subsequent orders. So I shut down my laptop. Stopping trading was the best option for me at that time.
How to use candlestick pattern to make money like a professional trader
In financial markets, the trend reflects the sentiment of the crowd at that time. Do you know about DOW theory? No market goes up or down forever. There will come a time when prices convert from bullish to bearish and vice versa. We often call it the trend reversal of the market.
That process is taking place slowly with many different forms. This is considered the key to entering orders with the highest accuracy. You can also use candlestick patterns to find those good entry points. You must use the right candlestick pattern and the right market conditions to achieve the highest accuracy in Forex or Fixed Time Trade orders in Olymp Trade.
Note when using reversal candlestick patterns
- For the pattern to be effective, you should combine it with other indicators such as trendlines, resistance and support levels or MA…
- There are two types of reversal candlestick patterns including bullish reversal and bearish reversal. You should understand the position of candlestick patterns as well as identify the trend before using the pattern.
- Patiently wait for the candle to close to confirm the correct reversal candlestick pattern.
- In addition to 3 types of reversal patterns including single reversal pattern, double reversal pattern (2 candles), and 3-candle reversal pattern, you should grasp some more advanced patterns to spot good opportunities.
Through the above review, have you seen the benefits of candlestick patterns? After mastering them, you will have a better chance of winning.
You can go to the candlestick pattern section to learn a lot of patterns that I share in this Blog. If you have any questions, please leave a comment below.
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