99% of retail investors do not understand candlestick patterns

Mastering candlestick patterns means mastering the pulse of market funds. However, most investors feel confused when faced with complex candlestick charts, while top traders can make precise trading decisions based on simple patterns. Below are three commonly used candlestick patterns by top traders and their application methods,

1. Engulfing pattern: A warning signal for trend reversal

• Characteristics: A larger candlestick body completely covers the previous smaller body, divided into bullish and bearish types.

1. Bullish engulfing: Appears in a downtrend, indicating a potential reversal, suitable for buying on dips. 2. Bearish engulfing: Appears in an uptrend, suggesting a possible top, suitable for taking profits or reducing positions. • Case analysis: A certain stock rebounded 15% from its low after the bullish engulfing pattern appeared; timely identification of this pattern is key to buying low. 2. Doji: An opportunity when the market hesitates

• Characteristics: The candlestick body is very small, with long upper and lower shadows, showing a temporary balance of bullish and bearish forces. • Operation strategy: 1. In a downtrend, it may be a precursor to a rebound. 2. In an uptrend, be wary of potential pullbacks. • Precautions: Must be combined with trading volume and subsequent candlestick patterns to judge the trend, not advisable to rely on alone. 3. Three consecutive bullish candles: A symbol of strong upward signals

• Characteristics: Three consecutive bullish candles, with each day’s closing price higher than the previous day. • Operation strategy: 1. Short-term trading: Can chase the price up, but must be cautious of pullback risks. 2. Trend trading: Combine with trading volume to confirm the trend's sustainability, operate steadily. • Operation skills: Combine with the MACD indicator to determine if a golden cross is formed, to enhance the reliability of the signal. How to quickly learn these patterns? 1. Daily review: Study typical candlestick cases and gain insights into market sentiment changes. 2. Tool assistance: Use technical analysis tools, such as moving averages, MACD, etc., to assist in judgment. 3. Simulated practice: Improve the accuracy of pattern recognition through simulated trading exercises. Understanding candlestick patterns is not difficult; the key lies in combining market conditions and trading volume to flexibly adjust trading strategies. The difference between top traders and ordinary investors is that they not only understand these patterns but can also apply them flexibly. Quickly bookmark this article, open your trading software, and see if these patterns have appeared in your trading targets.