Here we are at the end of the Candlestick Analysis series; hopefully a few of you are still with me. I’m going to show in this article the process I would use to incorporate candle patterns into my trading even though I am no longer a trader; not sure I ever was. Hey, there are enough non-traders out there offering trading advice, I just wanted to be honest about it. There are some things that must be met before I would consider a Japanese candle pattern to have any validity.
Of course, this is the most important component to candle pattern analysis; a pattern must be preceding by an appropriate trend. Reversal patterns are reversing something! They are reversing the trend that was used to help identify them in the first place. See Trend Determination article.