What are common candlestick patterns?

By that I mean, common found in forex. So far, the only thing I find common are the engulfing patterns. And doji's that doesn't seem to signify a reversal, rather about to enter a sideways channel.

Look a little more closely, mate, and you'll see all sorts of patterns, and I assume you mean reversal patterns?

Some of the more common ones that I've seen are Dark Cloud Cover, Tweezers, Railroad Tracks, Bullish and Bearish Engulfing, Hiramis, Evening and Morning Stars, Kickers.

Just looking for those will give you plenty of opportunities without worrying about any more.

I'm know for certain that there are traders on here that trade by using Candlestick patterns exclusively, so maybe you'll get even more information from them.

Happy Candlesticking!!

What are railroad tracks?

Remember, reversal patterns are not to be used unless you are at an overbought or oversold condition. Nison himself begs people to use this method but many seem to ignore him.

To my knowledge, railroad tracks is not a term associated with candlesticks. I did a search of Japanese Candlestick Charting Techniquies (Nison) and the word never appeared once.

I believe that railroad tracks are just another term for tweezers. As for overbought and oversold, any number of oscillators can take care of that. Although I like price action more. I'm starting to sway away from indicator cluttered interfaces, and relying soley on trend and price action. I figured learning more about candlesticks would help.

So far, i programmed my own indicator showing Engulfing patterns, stars, harami's, tweezers, kickers, dark cloud and piercing line. The indicator floating around seemed horrible to me.

I also inputted the three types of engulfing patterns. Regular, full shadow, and three outside patterns.

The most accurate it seems, at least to me is the full engulf.

Anyway, back to the purpose, I figured others had opinions on which one would be most accurate.

I only pay attention to 4 types of candle stick formations, all of them reversal signals:

- Hammers
- Morning/Evening stars
- Railway tracks
- Tweezer tops/bottoms

And ONLY when they bounce off levels of heavy support/resistance, like for example a confluence of previous swing high/low plus a trendline and a pivot point or something like that. When they occur at those confluences of S/R, they are usually reliable reverse signals and you can safely trade off them.

PS: by the way, down below I attach a picture (fear my crazy photoshop skills!) showing the difference between railway tracks and tweezer tops.

Thanks wtb for the illustrations.

do you have the indicators for candlesticks in MT4???

No offense, but if you need an indicator to find candlestick patterns, you need to sit down, read a book, and learn what they are. I'm being constructive, really.

Seowqj, if that is your real name, I see you might be a little new. What I have learned of late is that there is no way to just get a bunch of plug-ins for Metatrader, let them honk and ring and whistle, and trade based on them in a profitable manner at all. You have to sit down for months and learn the specific market you are trading, fundamentally, technically, and psychologically. You have to trade it exclusively, learn its nuances, and in the meantime learn everything you can about the interaction between the securities markets, the currency markets, and the interest markets, until you are capable of breaking even.

Then lenghten your time frame, hold trades for days instead of minutes, ride the good moves, admit when you're wrong and take the loss, never try to fight the market because it will always win, and be able to accept balance swings as long as the oscillation is in your favor. Once you can do all that, be ready to lose some more money.

Now start applying strict money management techniques to your account that use low percentages of your balance, per trade, to minimize losses and realize that, at 3-5% appreciation per week, it will take several years to get your first million. At that point, you're on the other side of the equity curve, and it will hopefully all be gravy. That's my plan, anyway. I learned it the hard and expensive way. I hope you don't make the same mistake...

Quote:dukeofdents:
"Seowqj... What I have learned of late is that there is no way to just get a bunch of plug-ins for Metatrader, let them honk and ring and whistle, and trade based on them in a profitable manner at all. You have to sit down for months [nea, Years. Would you base your system between the months of November to February?] and learn the specific market you are trading, fundamentally, technically, and psychologically. You have to trade it exclusively, learn its nuances, and in the meantime learn everything you can about the interaction between the securities markets, the currency markets, and the interest markets, until you are capable of breaking even.

Then lenghten your time frame, hold [subsequent Winning] trades for days instead of minutes, ride the good moves, admit when you're wrong and take the loss, never try to fight the market because it will always win, and be able to accept balance swings as long as the oscillation is in your favor. Once you can do all that, be ready to lose some more money.

Now start applying strict money management techniques to your account that use low percentages of your balance, per trade, to minimize losses and realize that, at 3-5% appreciation per week, it will take several years to get your first million. At that point, you're on the other side of the equity curve, and it will hopefully all be gravy. That's my plan, anyway. [and kudos to you! An Excellent Plan.] I learned it the hard and expensive way. I hope you don't make the same mistake..."
End Quote

{saved me having to re-type but I don't think I could have expressed this anymore succinctly.}

Get familiar with this for 1 Major Pair Before you attempt another Major.
First, learn quality, then learn speed. [volume]

Well, IMO, I dont think there's anything wrong with an indicator that points out that "hey, there might be a reversal going on here." As long as you understand what those candlestick patterns mean. And thanks for the clarification of the railroad tracks and tweezers, although I had a different definition of tweezers from a website.

Sorry guys, it is not my intention to barge in on this topic but there is a lot of young FF wisdom here that I would like to endorse.

INDICATOR = PROBABILITY. [ There is a xx% chance this may happen]
Not Fact.
In Fact, Says the Indicator.
'If it doesn't happen this time, I will alter the probability numbers for you!'
Hence... Choose your Ind's carefully.

Indicators [imo] should be included in Trading 101.
Why?
Ask a PURE PA student...
"Does the measure of Price Level This Week compared to last week have any relevence?" {perhaps defined as PA but, I suggest, more commonly referred to as MA}
"What does RSI measure?"
"Is Overbought, Oversold Overrated?"


Sorry main J, having never been a member, I really have no clue as to the extent of your teachings beyond basic, public, PA. I love your ethics but haven't joined because I am too long in the tooth to throw away [put aside] what I already understand and, yes, I probably am too old to be taught anew.


Friday Night Ramble.

sorry for not understanding you. but all my ind does is check for candlestick patterns, you'd have to look at it yourself to confirm if it is such a pattern. It just makes it easier to find patterns.

Tweezers are two or more candle lines with matching highs or lows. They are called tweezer tops and tweezer bottoms because they are compared to the two prongs of a tweezers. In a rising market, a tweezers top is formed when the two or more consecutive highs match. In a falling market, a tweezers bottom is made when two or more successive lows are the same. The tweezers could be composed of real bodies, shadows, and/or doji. Ideally the tweezers should have a long first candle and a small real body as the next session.

That is from Japanese Candlestick Charting Techniquies (Nison...the dude who brought us candlesticks) page 87. Doesn't anyone esle own this book?

Cheese, there is nothing wrong with letting your computer take care of some mundane tasks for you. It is the computer age after all. That is what they are supposed to do!

lol. i've been there. it ownz.

A good book on this is Steve Nison's "Profitable Candlestick Trading". As far as letting your computer do the work for you, a man had better understand what his computer is doing. Who's the master?

If I use an indicator, like CCI or RSI or any kind of other alphabet soup, I damn well better understand what it does mathematically first. If I don't I'm trading blind. I have also found that the most readily accepted indicators are the most fallible, simply because they are the most readily accepted, and that once I got through all the B.S. and quit trying to scalp, my account started to grow. I also quit using conventional indicators, which helped me even more. Candlesticks are great taken in context, but they absolutely must be taken in context, at an oversold or overbought price however you define it. That's just one hillbilly's opinion, I live in Tennessee and have a tooth, so take it for what it's worth. My cousin/wife says it's time to come to bed now, so good tradin' to y'all!

I just had a funny thought, I'm going to start a development team called "Forex Rednecks"!

Anyone who wants to sign on, and I am serious as a heart attack, PM me, I have several systems that all suck and need help...

Anyone with more than 3 teeth and no pickup truck is not allowed...

LOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thats true tho. I've been more successful trading 1H+ timeframes than anything smaller. maybe because my strategy wasn't meant for scalping, but watever.