The market made a strong rally, declined, and then starts to consolidate.
Notice the range of these candles over here is relatively small…
Then what happened?
The market has declined lower and made a large bearish body…
As you can see, there’s strength behind the move lower because the range of the candles is larger relative to the earlier candle.
Don't worry about how to identify trend reversal, we will cover that in the later part of this training video.
But for now, understand the two questions that I just shared with you.
This is something that most traders who trade candlestick never think about.
They just memorize patterns and think that green means buy and red means sell.
Then they wonder why they are losing consistently in the markets.
At this point in time, you don’t need to memorize candlestick patterns.
Once you understand this, you can read the candlestick patterns with ease.
We have covered candlestick patterns so now we can finally move on to…