A Deep Dive Into Candlestick Patterns with TradingView Charts

As anyone familiar with the arcane art of trading knows well, candlestick patterns are a powerful tool in a trader’s arsenal and can provide valuable information about market sentiment and price movements. If we use them wisely, these patterns can help us know where are the key entry and exit points and are, therefore, one of the most important parts of the technical analysis. On TradingView charts, you can use our simple tools to find and analyze candlestick patterns in order to make more informed trading decisions.

The price action shown in candlesticks over a specific time period is represented. When market sentiment begins to shift, the shape and color of candlesticks provide valuable clues. For example, a bullish candlestick is represented as a green or white candle as the price closed above the opening on the same day. On the flip side, a bearish candlestick is most commonly black or red, meaning that the price closed lower than it had opened. By observing the length of the candle body and the size of the wick (shadow), traders can determine if there is strong momentum or if a new reversal is forming.

The doji is one of the most well known candlestick patterns. This pattern forms with an open and close price that is almost the same giving a small body with long upper and lower wicks. A doji indicates that the market is deciding which way to go; neither buyers nor sellers have prevailed yet. A doji following a strong trend can be a harbinger of a reversal. It’s easy to spot a doji and may give you a heads up that the current trend is fizzling out on TradingView Charts.

Another strong pattern to watch for is the engulfing pattern. When a small bearish candle is accompanied with a large one that completely covers previous bearish one, it is called a bullish engulfing pattern. This indicates very strong buying and often indicates that the price will keep going upward. This pattern on TradingView Charts is also very easy to spot, and when paired with other indicators like moving averages or RSI it can give you a stronger signal.

As with all candlestick patterns, you should also keep a watch on the hammer and hanging man. Both have small bodies and long lower shadows but the meaning is up to the prevailing trend. A downtrend pattern indicates a hammer, which is an indicator of a reversal to the upside. A reversal to the downside may result from the hanging man which is formed within an uptrend. On TradingView Charts you can view these patterns and get a clue of when market may turn, so you’re more prepared when you plan your trades.

By using TradingView Charts in your trading strategy to incorporate candlestick patterns, you get to make more quicker and accurate decisions. Recognizing these patterns will allow you to foresee possible price movements, and get into a better position. Combining candlestick analysis with other technical indicators such as support and resistance levels, trendlines or breakouts, with which the candlesticks can line up, eliminates potential false signals and may increase your chances of success.

TradingView Charts make it easy to spot candlestick patterns in real time, making them an essential part of any trader’s toolkit. However, understanding what these formations mean helps you learn to pinpoint the formations, and improve your market timing thereby improving your chances of success in the market. If you are willing to put in the hard work and pay attention to detail, then you have the opportunity to gain a huge advantage from candlestick patterns in how you trade.