Tips for Trading with Candlesticks

Candlesticks helps tremendously in trading of financial instruments. Their advantages include 1) pictorial representation of market movements without any necessity of serious mathematics, 2) can be used by all kinds of traders trading almost all financial instruments, 3) with their small makeup (real-body and shadows) they can carry serious trading info and 4) they are easy to use with other technical analysis tools. Here are some tips for trading with the candlesticks.

1. Success with candlesticks demands by hearting candlestick patterns. You can start remembering them from frequent formations to less frequent one.
2. Start learning from simple reversal patterns to complex patters.
3. Print 5 or 10 candlestick patterns with their key features and importance on a paper and go through them one or twice a day. You can by heart them within a week. Then next 10.
4. It is also better to hand draw patterns on a paper. This works especially good for complex patterns as our brains retain images more when our hands too involved in a process.
5. When reading charts always looks for doji and start candlesticks, as they are the candlesticks which often form specific patterns. Also look at the top of uptrends and bottom of downtrends, to find some reversal candlestick patterns.
6. Many candlestick patterns, like hammer and morning star, have names which makes them easy to identify and track.
7. Learn the confirmations of different candlestick patterns; it is easy because most bullish patterns have similar confirmations and bearish patterns just reverse.
8. Learn to use other technical analysis tools, like Fibonacci, moving averages and Gann, with candlesticks. This can help you in right market timings, and placing right stop-losses and targets.

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