Technical analysts in the Forex market found that by observing the candlesticks patterns, there are recurring patterns on the candlestick charts. Such patterns are like recurring pictures on the candlestick charts and they tend to occur when a trend is about to end or reverse its direction. The patterns are a very good visual representation of the price movements and it give traders a good view of what is likely to happen next in the market.
Why are candlesticks patterns important? 
The answer for this question is quite simple because candlesticks represent true status of what is going on in the market at the current moment. If a candlestick range is tight, this means that the market range for the trading day was very tight. If these narrow candle range appears after a strong up-trend, it may be a strong indication that themarket there is a bearish power have now entered the market more aggressively, and it's strongly suggesting that the price may fall down.
Finally, candlesticks patterns can be easily used to determine potential reversals of the current trends in the market - most likely when used at the same time with other technical indicators. By constantly observing the candlestick patterns, traders can observe potential reversals of trends and have good opportunities to join the market with strong indication of what will go on next.
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1 comment:
Hello Everybody,
"Which Forex pair and time frame is best to trade" is the frequently asked question and I want do give you the DEFINITE ANSWER in this comment.
Are you expecting that I am going to say something like EUR/CHF on 5-minute time frame or GBP/USD on weekly...? No, it is not so simple, but SIMPLE ENOUGH we can figure it out!
The "DIFFICULTY" is that markets change over time. If EUR/USD was a well trending currency pair a few years ago, today it is another one.
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