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You need to master a few profitable candlestick patterns that can reveal a lot about trend reversals. In recent years, candlestick charting has become highly popular among traders. Othese candlestick charts you can spot a nmber of candlestick patterns that can reveal a lot about the market sentiment and can be highly profitable if interpreted correctly. A Candlestick is formed of a body and two wicks one above and the other below the body. The Candlestick Body is made by the Opening and the closing price. The wicks are formed with the high and low price in the session.

Now, there are many trend reversal candlestick patterns. The most popular is the Hammer. Yes, it looks like a Hammer that’s why it is called a Hammer. A Hammer usually appears at the end of the downtrend. When it does appear, it should not be taken lightly. It’s appearance is a signal that the trend is about to reverse itself. Hammers have extremely small bodies and long wicks or what you call shadows.

The other candlestick pattern as important as the hammer is the Hanging Man. Hammer is formed in the downtrend and the hanging man is formed in an uptrend. You will find the hanging man at the very top of the price action. This means that the uptrend is about to end and an downtrend is underway. Traders should take action accordingly.

Bullish and Bearish Engulfing Patterns are another candlestick trend reversal patterns. A Bullish Engulfing Pattern is formed when a candlestick bar opens lower than the previous candlestick’s close and closes higher than the previous candlestick’s open.

Now, the Bullish and Bearish Candlestick Patterns are two stick patterns. What this means is that these patterns need two days to form. The first candlestick is formed on the setup day with a small body. The second candlestick is formed on the signal day with the open higher than the previous day and the close lower than the last day candle in case of a bullish pattern. As the second candle engulfs the first pattern, this pattern is known as the Engulfing Pattern.

Candlestick charting is something you must master. These trend reversal candlestick patterns can be highly profitable. Many traders are now using candlestick patterns in their daily trading. There are many candlestick patterns. You must download the FREE 82 page Candlestick Guide after reading this article. This Candlestick Guide is a gift from Options University and comes with full strategy flash cards.

Combining technical indicators with these candlestick patterns can be very powerful.

Mr. Ahmad Hassam has done Masters from Harvard University. Master these highly profitable Candlestick Patterns with this FREE 82 Page PDF Candlestick Guide. Get this highly profitable Magic Breakout Forex Strategy by Tim Trush and Julie Lavrine FREE.

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