Knowing the types of candlesticks is imperative to trading. Charts are made up of candlesticks which show the fight between buyers and sellers. Patterns such as flags, pennants, triangles, wedges and reversals are all important to learn. These patterns become the guide to getting in and out of trades. Knowing how to read charts, candlesticks and patterns will make you a successful trader.
What Are the Different Types of Candlesticks Patterns?
- Here are some of the different types of candlesticks patterns:
- Well over 50 different patterns.
- Common major patterns are cup and handles, head and shoulders, and triangles.
- Common middle patterns are flags and pennants.
- Popular reversal patterns: doji’s, stars, hammers, spinning tops>
Basic Types of Candlesticks
You may be asking the question why is knowing the types of candlesticks important? Candlesticks are the name of the game. Not only do they form key support and resistance levels but also tell a story themselves.
In fact, there are many different types of candlesticks. Each one by itself tells a story. When you group them together they form patterns. Patterns break down all the time.Hence the importance of knowing candlesticks.
The candlesticks forming the patterns can be giving you warnings to the impending breakdown of a pattern. For example, everyone knows what bullish candlesticks and bearish candlesticks look like and mean; but do you know doji candlesticks?
The doji candlestick family is made up of different types of dojis such as dragonfly doji candlesticks and gravestone doji candlesticks to name some. Study these candlesticks to learn what they look like and their meaning.
Where Do I Start?
The sheer amount of types of candlesticks and patterns can seem overwhelming. How am I going to learn this and remember it all? Luckily here at the Bullish Bears, we’ve got you covered.
We spent thousands of hours pouring over charts, looking for candlesticks and patterns. We implemented it into a candlesticks patterns course that you can take as well as an advanced candlesticks reversals course for stock market training.
You have to put in the time and effort to study the types of candlesticks. You can’t skip a step. If you do, you’re only hurting yourself. Traders trade emotions; greed and fear.
This materializes in candlesticks and patterns. When you’ve put in the effort to study and learn, you’ll see the warnings candlesticks give as well as the patterns. Then you’ll begin to make smart trades. You won’t enter a trade on a doji candlestick or pattern you don’t like.
Each individual candle groups together to form stock patterns. The are large patterns like triangles. Every stock as well as the market trades in a triangle be it symmetrical, ascending or descending.
Inside those triangles are other patterns like head and shoulders or pennants. Then you zoom in to the candlesticks themselves and you see two and three candlestick patterns.
The small patterns inform you of reversals or continuations. Day traders and swing traders need to know these patterns. Being able to spot shooting star patterns or three white soldiers patterns will determine whether you go long or short.
If you don’t know patterns and you’re trading, your luck will run out. Next thing you know, your brokerage account will be empty.
What Do Different Candlesticks Mean?
- There are several different types of candlesticks, which are formed between the bulls and the bears. What does this mean? Every time buying and selling occurs, it leaves a trail, which turns into major candlestick patterns.
Study the Different Types of Candlesticks
Studying is important in trading. Everyone must study not matter what job they do. Whether you’re a mechanic or a doctor, you have to study your craft and the tools to help you.
Trading is no different. We’re equipped with the tools needed to be successful at it but it’s up to us to hone our craft. We wouldn’t want to see a doctor that didn’t know how to practice medicine. So why should trading be any different?
We’re in charge of our money and whether or not we grow it or lose it. Trading isn’t a get rich quick scheme. Anyone who says they can make thousands without much work is lying.
In fact, you’re going to spend hours studying the types of candlesticks and what they mean. You’ll learn how they form patterns and how to spot them. When you put it together, you’ll see how your trading changes.
Practice Trading the Different Types of Candlesticks
Now that you’ve studied the different types of candlesticks, practice trading them. Open a paper trading account with TD Ameritrade. Look at charts.
So many new traders want to jump into trading right away. That’s how you blow up your brokerage accounts. Trading is emotional. You need to learn to control your emotions.
Just because you know candlesticks and patterns doesn’t mean you’ll be a crack trader right away. You need to spend the time practicing trading them. See how well you know the types of candlesticks as well as the patterns they form.
Can you read the patterns and make the right trade? When you can then go to real money. Start off with small positions before jumping into the deep end.
Bottom Line on Types of Candlesticks
The types of candlesticks you learn go along way to help you become a successful trader. Candlesticks and patterns aren’t a fool proof trading plan. Even the best traders have losing trades 30-40% of the time.
It’s all about how you react to those loses that make you successful.