Price action trading is by far the most effective method of trading. Those who have learned about the price action trading system, usually do well in their trading business. Being a new trader, you might have zero knowledge about the price action trading system and it’s very normal. It is nothing but studying the different forms of the Japanese candlestick pattern and taking the trades with an extreme level of precision.
In today’s article, we are going to discuss the top 4 candlestick pattern which you must learn as a currency trader. If you follow these tips, you will be able to take the trades with an extreme level of precision.
Pin bar
The pin bar is the easiest pattern to identify in the market. Thousands of traders are using the pin bar pattern to find reliable trade signals in the market. If you intend to make some quick decisions in the market, you must learn about this single candlestick pattern. The pin bar has a small body and its wick is three times bigger than the body. In some cases, the wick length might be 4 times or more. If you spot this pattern at the support level, you can expect a strong bullish rally. On the contrary, when the pin bar pattern is spotted at the major resistance level, you can expect a strong downfall in the falling price.
Engulfing pattern
The engulfing pattern is mostly used by the advanced trader. The first candle is a part of the existing trend and the second candle is going to engulf the first candle. So, if the first candle is bullish the second candle must be bearish. Try to locate the engulfing pattern in the higher time frame so that you don’t have to think about the critical outcome. Higher time frame price action signals tend to generate better results and give the retail traders a perfect opportunity to make a profit. Being a new trader, learn the proper use of the pin bar pattern in the demo trading account to avoid big losing trades. And if you intend to use this pattern, rely on the best trading platform Australia. Never trade with the average trading platform as the price feeds and candlestick formations are not that accurate.
Doji
Doji plays an important role in the life of a trader. Doji suggests something big is going to happen in the market. When the price of a certain asset starts to consolidate, you will notice the doji pattern is slowly forming in the chart. In the doji candlestick, you will hardly find anybody. Before any major breakout takes place, you should notice such doji patterns in the market. Once you have spotted the doji pattern in the market, be cautious and look for the confirmation signal. But do not give any importance to the doji formed in the minute time frame. If you give importance to doji formed in the minute time frame, it will be a tough task to manage your risk profile.
Marubozu candle
The marubozu candle is easy to identify since it is a very long body. If the closing of the candle is below the opening price, we have a bearish marubozu candle. On the contrary, when the closing of the candle is above the opening price, we have a bullish marubozu candle. Such candlesticks are used to get confirmation in the market. After you spot such a pattern in the market, chances are high that the price will go in favor of the marubozu candle.
Conclusion
Try to use the above-mentioned four candlestick patterns in the main chart. If you learn to use this candlestick pattern systematically, you will be able to make a consistent profit without having any trouble. Take your time and look for the quality trade signals so that you don’t have to blow up the trading account within a short time.
