CANDLESTICK FORMATIONS
To use the various candlesticks strategies, you must become knowledgeable of the different structures that apply to them. These would give plenty of information about where the asset is moving and thus how the next candle will execute. Formations are normally a set of more than two candles. They are used as well together with other technical signals such as trends, volume, and other trading indicators. They can be seen within an interval from a minute up to a number of days. Binary Options trading with candlesticks, formations are vital to any strategy.
ENGULFING CANDLESTICKS
This formation is when one candle is entirely engulfed or immerged by the previous candlestick. It is usually engulfed by a candle with a different color than the original one.
MORNING AND EVENING STARS
Morning and Evening stars are normally made during market lack of reserves and therefore gapping in the cost. This frequently appears overnight or over the weekend.
HARAMI
Harami looks like the contrary of an engulfing one. By this, we have a huge candle with either color, followed by a much smaller candle that is eclipsed by the initial candle.
THREE METHOD FORMATIONS
A three method formation is composed of 5 candles and can whether be bullish or bearish. It is usually determined by the three smaller candles of a distinct color that are between the ranges of the larger ones.
FALLING AND RISING WINDOWS
Falling and rising windows are similar to the Morning and Evening stars. They arise in times of market shortage of liquidity. This is due to a big gap down or up within the candles. But, the gap is way more noticeable as the candle opens distant from the open or close window of the prior candle.
To know more about candlesticks formations and strategies, do read Candlestick Strategy IQ Option.
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