Basics

Candlestick Patterns You Should Know


The most popular visualization of asset prices is the candlestick chart 📊. Its popularity is due in part because it is easily interpreted and can show patterns to support decision-making in forex trading. Let’s learn the candlestick patterns you should know to improve your performance in forex trading.

What you can learn ahead 🎓

  • Understanding the concept of candles in trading
  • What are the most popular candlestick patterns
  • How to improve your performance without watching candlesticks charts
  • How to trade forex with automated AI trading.

Would you like to learn more about charts in forex trading? We also suggest this article: Candle vs Bar vs Line. What’s the Best Chart?

🎯 Our mission is to help you invest efficiently in forex and improve your results. Get extra valuable forex trading ideas from leading finance experts on the trading Academy and on our free forex Telegram channel.

💹 When investing in forex, we suggest you consider long term results.

Let’s dive into the candlestick trading world🕯

Unlike traditional bar charts used for stock market analysis, the candlestick chart gets its name because each bar resembles a candlestick with a potential wick on the top or bottom.

Each candlestick bar conveys four points of information, in addition to representing a particular time period of analysis. Examples of candlestick time-frame include the following, where each bar represents a specific amount of time:

forex the best timeframe

In most broker trading-tools such as charting platforms, the candlestick time-frames range from one-second up to one-month per candlestick.

It is also important to know the color scheme used to easily read candlestick charts. We normally use green and sometimes blue on a candle to show upward movements of price and red to depict the downward movements.

💡 Would you like to learn more about candlesticks in the forex? Click here to read the article Candle vs Bar vs Line. What’s the Best Chart?

As mentioned earlier, there are four points of data that each candle conveys, known as Open High Low Close (OHLC), but are only completed once the candlestick bar time-frame has passed.

technical analysis trading

The market open price and close price of the session will be the top or bottom of the candle, while the high and low prices reached during the candle time-frame will be potentially shown as candlewick lines unless the high is equal to the open or close, or the low is equal to the open or close. In other words, some candles don’t have any wick because the low or high was the same price as the open or close.

The larger area of the candle or the body is formed after the price opening in that period and is completed at the price of closing. This means that If the closing price is higher than the opening price, the candle will be green, otherwise, it will be red if the closing price is lower than the open.

Analyzing candlestick charts 🔬

The thinner line, known as the candle wick, which is above or below the candle body shows the maximum and minimum price reached during that candlestick period. And while you may see lots of information in one image, it makes it easier to understand how the prices behaved during that time by reading the candlestick charts.

Here we can see a typical broker screenshot of FXCM.com for the EUR/USD forex pair.

foreign exchange

When analyzing candlestick charts, the graph shows price history available across various time-periods where the trader can start to look for patterns. There are various charts and candlestick patterns, known as technical analysis, which can help identify and signal the right moment to trade.

In addition to finding trends, there are also indicators of counter-trends, and various candlestick patterns such as the Hammer, Pin, and Doji, to name a few. Overall, there are hundreds of classical indicators available to analyze the price direction for forex pairs.

technical analysis charts for trading forex

One helpful exercise for beginners is picking a forex pair and trying to find as much of a pattern as you can. Try to see how many times it really came just before a change in price behavior.

If you investigate on the internet and into the literature, you will find thousands of patterns applicable to charting and candlestick charts.

Despite a large number of indicators, it can be confusing for traders to analyze charts. This is why Artificial Intelligence (AI) is becoming more popular for its use in financial markets by trading professionals. Unlike humans, AI-powered applications can quickly analyze very large data sets and compare countless candles to precisely infer where a pattern occurred or not.

Wiseinvest finely crafted an AI forex trading agent which supplies information about when and in which forex pair one of those patterns occurs. Then it emits a signal to the user in real-time so they can act on the opportunity.

WiseInvest was created out of the belief that we can help people save time by using AI to do the work for them in identifying trading opportunities.

By using Wiseinvest automated AI trading and AI forex signals, you don’t need to spend hours analyzing candlestick charts when trading forex. We send all information to you to set the order, including the exit target prices. We aim to help you save time while increasing your trading success.

The best way to trade forex

There are two ways to invest with our AI in forex without concern about watching candlesticks.

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

automated trading with ai bot

By trading forex automated with AI, you will save time and improve your performance without monitoring the market and managing trading platforms.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account every time that our AI system identifies a new worthy trading opportunity. You can monitor the AI trading performance in real-time directly on our dashboard.

Automated AI trading benefits ✅

  • Setup in 3 minutes.
  • Totally hands-off, from anywhere.
  • Invest from just $1.
  • APY of 40% over the past 13 years*.
  • Lightning-fast execution & no slippage.
  • No commissions, no management fees.
  • Portfolio with 40 different automatic strategies.
  • No MT4/MT5 or other platforms required.
  • Test with a risk-free practice account.
  • Trading results directly on our dashboard.

Would you like to open a forex broker account? Our AI is integrated to trade automated with the brokers Oanda and FXCM. Click here to open an account with FXCM or here to open with Oanda. Those are some of the best forex brokers in the world.

2. Manually with AI forex signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5, and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, to match the performance of the signal as close as possible.

Each AI forex signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

Check out how to trade with our AI forex signals.

  1. Subscribe to a Wise-Plan.
  2. Open a Brokerage account. Check this article about the best forex Brokers.
  3. Set an amount and a position size on our Wiseinvest dashboard.
  4. Our AI will send you real-time trading alerts by email and Telegram.
  5. Copy the signals and paste into your Brokerage account.

All forex signals are sent every time that our AI trading system identifies a new trading opportunity. Our trading strategies are developed on a variety of time frames such as 4 and 8 hours.

Wiseinvest AI forex signals are Market Orders and you do not need the entry price. You can copy each signal while it is available on our dashboard. We do this way to assure that traders will just place signals while they are good to be traded.

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate pips and change the leverage in your forex broker account. Learn more about leverage in forex trading by clicking here.

What is the AI performance in forex trading?

The Win Rate of our AI moves as shown by the period and can reach up to 95%. The introduction relies upon the capable wild estimation metric, which infers that our model is valuable at whatever point the Win Rate is more noticeable than 60%. All methods of our AI trading system search for stable returns and sufficient results to achieve an ordinary return of 40% consistently (APY), without the usage of high impacts.

We appreciate that what is significant in forex trading is the definitive result. Thusly, the money related master needs to consider that Win Rate isn’t commonly the best estimation to measure execution in forex, as other signal providers uncover. For instance, out of 100 trades, solitary 1 trade may be an adequate disaster to make the 99 trades not gainful. For this circumstance, the Win Rate would be 99%, yet the convincing result would be unfeasible (negative).

We revolve around the appearance of 40% of APY and not just on Win Rate.

It is essential to see that forex brokers may charge spreads, commissions, and overnight costs in your trading account, and these components can impact the AI execution. You can check our forex trading history to see more about AI trading execution by clicking here.

How much do I need to trade forex with AI?

You can start in forex trading with a free AI forex signals or AI trading record and make a store from just $1 in the broker. It is moreover possible to test using a danger-free practice account with our AI trading structure. Regardless, to do a capable peril, the board in authentic records, we suggest you start from at least $100. Notice that some forex traders require assorted beginning stores to trade forex.

What is the trading strategy of our AI?

Our AI methodology is the blend of different AI trading structures, with more than 100 features, that portray 40 particular procedures which simultaneously consider: Quotes of the 28 forex pairs, Supports, and Resistances in different timeframes, Trends and Counter-designs, Cross-markers, Index of each pair, Economic Calendar, Investors Sentiment.

Our AI looks at those fundamental, technical, and sentiment factors that impact forex trading, and all models are surveyed constantly using different burdens. In the wake of completing the examination, the choice of the signal transmission procedure is made considering the improved likelihood of flashing advantage and the total open for theory.

Using technical analysis, our count considers not simply the instances of various examples, including sponsorship and deterrent levels and cross-pointers, yet our AI is moreover prepared to make its own progressing record for each cash pair, that is used to recognize what is the best course and target.

Practically identical to fundamental analysis in forex, the AI makes an association inside the budgetary calendar to find news data that can impact express money sets.

Takeaways

  • Candlestick charts are one of the most popular graphical representations of forex prices and are easy to interpret.
  • Technical Analysis can be complex using candlesticks with hundreds of indicators and patterns available.
  • Changes in chart patterns can reveal an upcoming change in the trend. Be careful because it can sometimes jump over your stop-price order, such as during a sudden market gap after specific chart patterns.

No one can follow all forex pairs at the same time, only with a good AI-powered trading tool you can avoid missing good opportunities.

Candlestick Patterns You Should Know: Did you learn from our post? Learn more about our Academy trading.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. FXCM warns that 74.74% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.