It’s a common fact when you start to learn Forex that candlestick is a well-known as one of the hardest concepts to master. The truth is, although it is possible to trade and succeed in the Forex market with no understanding of candlestick, you should still learn candlestick. This is because candlestick chart analysis can enhance your trading skills. 

Everything You Want to Know about Candlestick Patterns 

It’s no secret that learning and adding an analysis of candlestick chart to your trading strategy is able to improve and vary your trading skill as well as trading knowledge. Just imagine when you have an extra confirmation or another confluence when determining your trades. You will have more confidence to put a position in the market. 

What Is Candlestick Pattern in the First Place?

Before learning more about the type of candlestick patterns available in the forex trading chart, you should first know what this pattern is all about actually. Candlestick patterns are an important part of technical analysis which presents a movement in prices on a candlestick chart. These patterns are believed to display a particular prediction of the market movement.

The 5 Most Profitable Candlestick Patterns

As you watch the market movement in a candlestick chart, there can be a pattern which is shown by the price movement in the chart. Different patterns are considered presenting different market conditions and they can be used for your benefits. Here are a few patterns in a candlestick chart which is considered to be the most profitable.

#1 Bullish Engulfing Pattern

This pattern is considered as the most powerful signal for the end of a downtrend in the candlestick chart. It signals the beginning of a potential rally which can be used for your advantage. More interestingly, it’s an easy pattern to be identified. It is shown as a trend reversal after a constant bearish downtrend. 

#2 Piercing Pattern

This is another powerful pattern after the end of a downtrend. The occurrence of this pattern is quite rare in a candlestick chart. Even though it doesn’t happen frequently, but it is one of the most powerful signals to begin a potential rally. Different to Bullish Engulfing Pattern, this pattern is a bit tricky to identify.

#3 Dark Cloud Cover Pattern

This pattern is also a rare candlestick pattern. However, it is one of the most powerful signals that you can find in the candlestick chart. Similar to piercing pattern, it requires a mathematical approach to settle on its validity. The application of this pattern is surely similar to piercing patter as well, but it is in an opposite trend. 

#4 Dragon Fly Doji

Even though this pattern is not as strong as the patterns mentioned above, it is a great pattern to search for when you are watching a candlestick pattern. This fairly powerful bullish reversal signal can be seen at the support level band’s bottom. To identity this pattern, you could search for a long shadow with a thin body.

#5 Gravestone Doji

This is another pattern that you should take into account in a candlestick chart. This rare pattern is a fairly powerful signal that is seen over a resistance band. Similar to Dragon Fly Doji, the visual of this pattern is like a long shadow which has a thin body. This pattern can be a strong sign for weekly time frame.

Those are the top five strongest patterns in a candlestick chart. Actually, there are some other patterns which are quite profitable such as Shooting Star Pattern, the Hammer Candlestick Pattern, the Morning Star Candlestick Pattern, and Evening Star Candlestick Pattern. When you learn Forex, consider taking your time to learn all of these patterns too.