candles open and close are almost equal. It contains all three formations above and shows you the exact characteristics I look for when developing a trade idea. Last Updated November 11, 2016, there is a special section in every good price action traders toolbox reserved for Forex candlestick patterns, and for good reason. (For related reading, see: Candlestick Charting: What Is It?
Two Black Gapping The bearish two black gapping continuation pattern appears after a notable top in an uptrend, with a gap down that yields two black bars posting lower lows. The confirmation of the Hammer, Inverted Hammer, the Shooting Star and the Hanging Man comes with the candle which closes in the direction opposite to the trend. Good luck in your trading! For it to be profitable, an engulfing pattern must form at a swing high or low. Let me introduce you to these candles now: I have shown the bullish and the bearish version of each candle. The doji can be both a reversal pattern and a continuation pattern.