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What is Candlestick Pattern? Which are the 5 most powerful Candlestick Patterns?

In online trading, many traders rely on technical indicators to understand a stock's performance. These indicators are heuristic or pattern-based signals produced by the volume, price, etc., of a stock or security. They are quite effective when conducting a technical analysis of stocks. With analyzing the historical data, technical analysts use indicators to predict the price movements of a stock.

Candlestick chart patterns are technical tools that trading account holders use to analyze the market's price movement. They resemble the bar chart but are different from the traditional open-high and low-close bars. They are compact and combine multiple data from different time periods in a single candlestick bar.

Some of the features of the candlestick pattern include:

- They are effective trading tools that have been used for many years by traders who wanted to predict the price movement.
- Traders these days rely on different candlestick patterns to understand the market movement.
- Some patterns like Doji indicate both trend change and market indecision, and therefore, a trader must confirm the change before basing their trading strategy.

Candlestick chart patterns differ from the general day trading charts. They are preferred because they offer a valuable visual perception of the price movement. They are quite important for understanding the critical components of a candle to interpret trading signals. These charts include individual candles. With its help, traders estimate where the price opened or closed for a period, and along with it, the lowest and highest price points of the day. To understand these patterns, you must know about the different candle components.

The top 5 powerful candlestick patterns include:

1. Last Engulfing pattern
2. Spinning top
3. Record Session count
4. Engulfing pattern
5. Hammer

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