Candlestick pattern works in trading? #candlestickpatterns #stockmarket

追加: 2026-05-21

[00:00:00]Candlestick patterns don't work in trading. Let me explain the reasons.

[00:00:04]First point is there are thousands of candlestick patterns and traders struggle a lot to identify them or shortlist them for trading. To explain my point, let's take an example of a one single powerful candlestick pattern. So, bullish engulfing is a powerful candlestick pattern to identify the price reversal from a downtrend to uptrend. So, basically it looks like this. The first candle is a small red candle. The second candle is a big green candle that completely covers the first red candle. This shows buyers have become stronger than sellers. So, traders spot the bullish engulfing pattern, take the long trade, but it hits their stop loss many times and then they complain that these candlestick patterns don't work in trading. Friends, rule number one. All bullish engulfing patterns are not the same. I'll repeat, all bullish engulfing patterns are not the same. For example, see this chart.

[00:00:56]This chart has two bullish engulfing patterns. Do you think both are the same?

[00:01:02]Nah. Bullish engulfing pattern should be a little bigger in size compared to the average size of the candles. Especially the bullish candle should be bigger in size to indicate the reversal. In this case, bullish engulfing pattern is not powerful as the bodies are small, right?

[00:01:19]But in this case, bullish engulfing pattern is powerful as the bodies are big.

[00:01:24]Now, the rule number two.

[00:01:26]Where the bullish engulfing pattern occurs matters a lot. A bullish engulfing at the middle of the price range doesn't have much significance compared to the same bullish engulfing pattern that occurs at the support level. See this chart, there is a bullish engulfing pattern that occurred in between the price range, right?

[00:01:44]Nothing much happened. But in the same chart, there is a bullish engulfing pattern that came at the support level and the price reversed from that level.

[00:01:52]So, you need to spot bullish candlestick patterns at the support levels and bearish candlestick patterns at the resistance level. So, my final conclusion is this. Yes, these candlestick patterns don't work if you don't know how to use them. So, I'm planning to conduct a next trading workshop very soon. We'll share a few things that genuinely changed my understanding of the market. Link is in my Check if you're really interested.