Which candlestick pattern is most reliable?
We look at five such candlestick patterns that are time-tested, easier to spot with a high level of accuracy.
Doji. These are the easiest to identify candlestick pattern as their opening and closing price are very close to each other. ...
Bullish Engulfing Pattern. ...
Bearish Engulfing Pattern. ...
Morning Star. ...
Evening Star.
Bullish patterns indicate that the price is likely to rise, while bearish patterns indicate that the price is likely to fall. No pattern works all the time, as candlestick patterns represent tendencies in price movement, not guarantees.
Do candlestick patterns work?
Studies carried out on the effectiveness of candlestick patterns seem to agree that overall, the patterns are successful 50% of the time. As such, traders need to learn how to determine which patterns are likely to turn profitable and which ones will end up losing money.
