Memorising patterns is the easy part. Making money with them needs three rules.
Rule 1: Location
Patterns matter at levels: support, resistance, trendlines, Fibonacci zones, moving averages. A hammer in the middle of nowhere is just a candle.
Rule 2: Confirmation
Wait for the candle to close, and ideally for the next candle to move in your direction.
Rule 3: Clear invalidation
Put the stop beyond the pattern's extreme: above a shooting star's wick, below a hammer's tail. If it gets hit, the story was wrong.
Wick says
Candles are words. Levels are sentences. You need both to read the book.
Pro tip
Our pattern library shows every candlestick and chart pattern in one place. Bookmark it.
Key takeaways
- Pattern + level + confirmation = a trade idea.
- Stops go beyond the pattern's extreme.
- Higher timeframes give more reliable patterns.