Candlestick Patterns Every Forex Trader Should Know

Candlestick patterns are popular charting tools that reflect price data helping to predict future price movements. They are a type of Forex Charts, a visual representation of a currency pairs price over a set period of time. Candlestick patterns are essential in forex technical analysis to anticipate the next price move.

What is Candlestick Chart？

Candlestick chart is the most popular in forex charts. Japanese candlestick charts are easy to use and also very informative when it comes to highs, lows, opening, and closing prices. The vertical lines illustrate the trading periods price ranges, while the body of the candle represents the market changes in a time period.

What are Candlestick Patterns？

Candlestick patterns are price patterns that are formed over time and believed to have a repetitive nature. It means that these patterns are repeated every while and reflect the emotional reaction of the traders to the prices. They are used to recognize a trend continuity or reversal by reflecting the buying and selling forces.

There are numerous candlestick patterns and they are categorized into bullish and bearish. Bullish candlestick patterns indicates that prices are likely to rise. On the other hand, bearish candlestick patterns indicate that prices are likely to fall. The is also the neutral patterns, that reflect the times indecisiveness of the market or neutral price movements.

Read about Candlestick Patterns for popular patterns traders should know and how to use them effectively!!!