Candlestick charts explained
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In short: it depends. There are a few factors that highly influence this. These are: The instrument The timeframe The size of the candle pattern The chart pattern The instrument Different instruments behave in different ways. The most important thing about an instrument is it’s liquidity, i.e. the traded volume.…
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Are there specific candlestick patterns for stocks? Well, there are certain candles that work less well for stocks, especially for those stocks that gap a lot. The reliability of a chart pattern depends a lot on how big the volume is. In case there is not a lot of volume…
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Are there any candlestick patterns that work specifically in forex? Well, the instrument is one of the factors that determine how reliable a candle pattern is. Usually forex pairs trade with huge volumes. This means that most common candle patterns present a reliable signal. Depending on the timeframe as well…
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Engulfing means if a candle’s body is larger than the neighbouring candle’s, thus it “engulfs” the other candle. The classical examples are the bearish engulfing and the bullish engulfing candles. These occur when the current candle engulfs the previous one. It is ideal if the current candle’s body is bigger…