Confirmation candles are a key tool for traders to validate their buy or sell decisions. The concept is simple: wait for the market to confirm a move before entering a trade. As shown in the image, confirmation candles can either validate bullish (buy) or bearish (sell) trends, ensuring better trade accuracy.
How It Works:
1. Buy Signal: A bullish confirmation candle closes above the previous candlestick’s high. This signals that buyers are in control, and it’s a good time to enter a long position.
2. Sell Signal: A bearish confirmation candle closes below the previous candlestick’s low. This shows sellers dominating, indicating a shorting opportunity.
Why Use Confirmation Candles?
They help filter out false signals, reduce emotional decisions, and increase confidence in your trades. Instead of guessing, you’re reacting to solid evidence of market direction.
By incorporating confirmation candles into your strategy, you can trade smarter and minimize risk.
