Here are three more common mistakes that new traders make with Japanese candlesticks.
Japanese candlestick patterns that are supposed to form after three candles based on textbook examples may actually end up forming over five candles.
Just because a three-candlestick pattern takes four candlesticks to form doesn’t invalidate the pattern.
The meaning is still the same. It’s more important to understand the price action behind the candlestick pattern than to simply memorize its standard form.
If you constantly just focus on shorter time frames like 5-minute charts without stepping back and trying to look at the “bigger picture”, your trades will tend to get blindsided.
Try not to make your focus too narrow.
There are some candlestick patterns that are considered “self-confirming”, but many are not.
Make sure to wait until the candlestick closes and is fully formed before acting in a pattern.
Always wait for the right confirmation that the price is moving in the direction you’re expecting.
For example, if you see a Tweezer Bottom, it’s more prudent to wait and make sure that the candlestick after the dual candlestick pattern closes higher before going long.
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