Candlestick patterns are widely used by professional traders. Though there are many ways to trade the live asset the pro traders always use a conservative trading technique to make consistent profit in this market. If you learn the proper use of the Japanese candlestick patterns, you can easily find great trades at any market condition. A candlestick pattern trading strategy is mostly based on the different formations of the Japanese candlestick pattern at the key support and resistance level. You need to rely on long term goals and trade the market with proper logic.
Those who are relatively new to candlestick pattern trading strategy might think learning the different candlestick patterns is impossible. To be honest this statement is only true of rookie traders. But there is nothing to worry about. We will highlight the three most powerful candlestick patterns used by the pro-UK trader. These are:
- The bullish morning star
- The bearish even star
- The pin bar
The bullish morning star
The bullish morning star pattern is based on three different kinds of the candle. The first candle is a part of the previous bearish trend and it usually represents strong selling pressure in the market. The second candle is a Doji or a bullish pin bar which represents indecision between the buyers and the sellers. The third candle is the confirmation candle which represents the bulls have taken control over the market and retail traders can make a decent profit by executing long trades.
The bearish even star
Just like with the bullish morning star pattern, the bearish evening star starts with a strong bullish candle. The second candle is usually a doji or a bearish pin bar. After that, we have our bearish confirmation candlestick pattern which helps us to execute the short order. Things are fairly easy when you understand the key features of the price action confirmation signal. You won’t have to take any huge risks to execute a trade in the Saxo online trading account. You have to rely on a proper risk management policy and trade the market with logic.
The pin bar
The pin bar is a powerful reversal signal in the market. Most of the professional price action traders rely on pin bar trading strategy to trade the market with an extreme level of precision. Being a new trader, you need to understand the fact, trading is all about finding the best trades. Unless you know the proper way to find good trades, you will not be able to make a profit in the long run. Take your time and try to trade the market with proper logic so that you don’t have to lose any real money.
Setting up the stop loss
By now, you know the details of the price action confirmation signal. Though the trading strategy is extremely powerful the pro traders prefer to use a proper stop loss. In fact, you will have to lose trades on a regular basis even after following all the basic guidelines. The only way to protect your trading capital is to use tight stop loss by using the simple candlestick pattern.
Risk reward ratio
Being a new trader you might not consider the risk-reward ratio in each trade. But experienced traders always trade the market with high-risk-reward ratio. It allows them to make a profit at any market condition. As a fulltime trader, you must understand losing is nothing but a part of your trading profession. Unless you train yourself you are most likely to lose money in the long run. Leading your dream life based on currency trading business is really easy. If you follow the proper logic it won’t take much time to develop your trading skills and trade the market like a pro trader. Try to follow in the footsteps of the successful traders and you will be able to make a profit at any market condition.