Today we will cover a bit on candlestick patterns

Candlesticks are the price behavior for the time allotted. If you select a 4-minute time frame, each candle will carry a time value of 4mts.

If the candle closes above the previous close, then it is a green candle. If it closes lower, it will be a red candle. Each candle shows the psychology of the market participants, which is why chartists and technical analysts look at candlesticks and then guess the psychology of the traders.

There are 2 to 3 types of candle stick trading ideas.

1. single candle stick pattern

2. multiple candle stick pattern or combination pattern

This is an example of multiple candlesticks, the encircled region shows an M-like pattern. It is called a double top and is usually a bearish sign.

Similarly W pattern — or double bottom — is a bullish pattern. If you ask me whether it works or not in real life, I could say there is a high probability that it works in our favor.

See the full chart, both the bullish pattern (W pattern) and the bearish pattern (M pattern) are shown. This gives us a higher level of confidence to punch directional orders. We can also set a realistic stop loss too.