Candle Pattern Indicator for MT4 (Basic Candlestick System)

Candle patterns and indicator are important tools for traders in the financial market.

They provide valuable insights into market trends and help check potential entry and exit points for trades. the basics of candle patterns and indicators, their significance, and how they can be used in your trading strategy.

What are Candle Patterns?

Candlestick charts were first developed by Japanese rice merchants in the 18th century to track price movements of rice contracts.

Candle Pattern Indicator

These charts consist of a series of individual candle Pattern Indicator that represent a specific time period, such as 5 minutes, 15 minutes or an hour. Each candle has four key components open, high, low, and close prices.

which depict the price action during that time frame. The body of the candle is colored differently depending on whether the closing price was higher or lower than the opening price.

Candle Pattern Recognication Indicator

Candle patterns offer valuable insights into market sentiment as they reflect the actions of actual traders in real-time.

They provide visual cues about the balance between bulls (buyers) Technical Analysis and bears (sellers) in the market at any given point. Traders often use candle patterns to confirm existing trends or anticipate trend reversals before they occur.

This information can be crucial when making trading decisions as it helps traders enter trades at favorable levels based on their risk-reward preferences.

The Top 5 Candle Pattern Indicators for MT4

Candlestick patterns are a popular tool used by traders to analyze market trends and make more informed trading decisions. These patterns can provide valuable insights into the behavior of price movements and help check potential entry and exit points in the market.

If you are an MT4 user, you have access to a wide range of candle pattern indicators that can enhance your trading experience.

1. Japanese Candlestick Patterns

This is one of the most commonly used candle pattern indicators on MT4, developed by MetaQuotes the creators of the platform itself. It displays all major Japanese candlestick patterns such as doji, hammer, shooting star, and many more on your chart.

This indicator not only highlights these patterns but also provides information about their reliability and directionality.

Candle Pattern Recognication Indicator

2. Pattern Recognition Master

Pattern Recognition Master is a powerful indicator that identifies all classic chart patterns including flags, pennants, head and shoulders, double tops/bottoms, etc. It automatically marks these patterns on your chart with different colors for easy recognition.

Moreover, it also comes equipped with customizable alerts Shooting Star Candlestick which can be set up to notify you when specific patterns appear on your chart.

3. Candle Pattern Scanner

Candle Pattern Scanner is another great tool for check candlestick formations such as engulfing patterns, harami candles, morning/evening stars, etc. What sets this indicator apart from others is its ability to scan multiple currency pairs simultaneously in real-time.

This means that you don’t have to switch between charts or timeframes to look for trading opportunities. It also provides detailed statistics on the performance of various candlestick patterns, helping traders make more informed decisions.

Examples of candle patterns shown by the indicator

Candlestick patterns are one of the most popular tools How the Candlestick Pattern Indicator Functions used by traders to analyze and predict market trends. These patterns, when combined with technical indicators, can provide valuable insights into potential price movements.

1. Hammer and Hanging Man:

The hammer and hanging man patterns are characterized by a small body with a long lower wick and little or no upper wick.

Pattern Recognition Master

These patterns are formed when the opening price Action is significantly higher Read Candlestick Chart than the closing price (hammer) or vice versa (hanging man). When these patterns appear at the end of a downtrend, they signal a potential trend reversal to the upside.

2. Shooting Star and Inverted Hammer:

The shooting star and inverted hammer patterns have similar characteristics to the hammer and hanging man, but they appear at the end of an uptrend instead.

The long upper wick in these patterns suggests that buyers were initially in control but lost momentum towards the end of the session, signaling a potential trend reversal to the downside.

3. Doji:

A doji pattern is formed when the opening and closing prices are equal or very close to each other, resulting in a small body with almost no wicks. This pattern indicates indecision in the market as both buyers and sellers were unable to establish dominance Candlestick Pattern Marubozu during that particular session.

A doji appearing after an extended uptrend or downtrend could signal a potential trend reversal.

4. Engulfing Patterns:

Engulfing patterns occur when one candle fully engulfs (or “engulfs”) another candle’s body, including its shadows/wicks.

There are two types of engulfing patterns – bullish engulfing (where an upward candle follows a downward candle) and Long Legged Doji bearish engulfing (where a downward candle follows an upward candle). These patterns suggest strong buying or selling pressure from market participants.

Candlestick patterns PDF

5. Dark Cloud Cover/Piercing Line:

The dark cloud cover and piercing line patterns are similar to the bearish and bullish engulfing patterns, respectively. However, in these patterns, the second candle does not fully engulf the first one but instead opens above/below its body.

These patterns indicate a potential shift in market sentiment. Candle pattern indicator can be valuable tools for traders when used alongside technical analysis. By understanding and recognizing these common candlestick patterns, traders can make more informed trading decisions and potentially improve their overall profitability.