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Forex candlestick patterns

Posted in Blog

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 and considering other signals of course. You have to keep in mind that the shorter the timeframe the less power there is in any type of pattern.

Gaps occur relatively rarely in forex, especially on a daily or higher timeframe. If there is a gap, it usually means something. Therefore these candles also represent strong signals.

A good example of a gapping candlestick pattern is the morning star or the evening star formation. If these appear in forex, that usually means strong price action. They signal a reversal with high probability.

Bullish morning star a reliable forex candlestick pattern

Some gapping candles are very rare in forex, like for example the abandoned baby and the bearish kicking or bullish kicking patterns.

So in summary, there are no typical forex candlestick patterns, as candles work for all instruments under certain conditions. However as forex pairs on the right time frame produce substantial volume, most candles work well. This also means that some patterns appear very rarely.

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