Topic: Are candlestick patterns overrated? (Read 490 times)

Sooner or later they would really realize those things on which if they do tend to engage with trading then those patterns would really be helpful specially if you do know on how to understand it.
They arent overrated but rather its mainly needed because you would really be having the idea on what to do if you do know on how to read up candle patterns.You cant just make out outright decision
in related into your trading position if you dont even consider on what it is forming although its not really that a reliable thing most of the time but it is really better compared when you arent
using something and just like on what others been saying above that it is really useful and you would find it for it to be mainly needed.

One thing some traders does not know is that the market can not be easily traded using one pattern which can bring losses. When I started trading I learnt the candle stick pattern but I still get confused of the market when I will want to put my candle stick knowledge in use. Nothing works in isolation so we just need to couple everything about trading in one use.

Candle stick pattern can be combined to indicators to get some good understanding about what could be the possible movement of the market. All these work hand in hand to get the best results from the market since multiple tools is what could give us a better possible direction of the market.

I do believe that it is luck+insider info together. I mean even my friend who is not even rich ended up with some insider info once and turned his 160 dollars into over 2k+ dollars, all thanks to knowing what the project was planning on doing next, and that was super easy. Think about being a literal billionaire and having all the people in the world trying to impress you to make more money, they would end up with telling you all the secrets in order to make some profit.

This is why I believe that we should be considering the current situation as a big deal for us, since we could be involved as much as they can in the crypto world, when we couldn't in the wall street world.

Not only on forex but also in other markets as well which candlestick patterns is really that relevant and the main thing you would able to deal when you do step your foot whatever market you would really be into.
Since technical indicators are your first tools on making use since not all would really be that anytime we do have some news which we would really be able to deal with.
Patterns arent that overrated but rather its mainly needed because you have to deal with technical analysis most of the time which means it would really be that relevant that
you should know on how to read up these candle patterns so that you do have the idea at least when you do make out decisions on your investment.

Personally I used candlestick patterns for forex trading it is the best technical indicator particularly when using higher timeframe where there is less noise with a naked chart at the close of each candlestick it always give a clue for the next line of Price Action, it's either price continuation or reversal with the help of RSI indicator for indentifing overbought and oversold, I also uses trend lines for breakouts after the candlestick had indicate a likely price continuation or reversal, I don't rely on lagging indicators for trading because of their false and inaccurate signals in most cases.

Candlestick patterns are not some subjective study of the ups and downs of the market but rather reflect real numbers and actual market sentiment. So why you or anyone would consider them overrated is a bit of a mystery to me. But that being said, you cannot view candlestick patterns without looking at the bigger picture of whats happening to the volume, the rsi, and of course most importantly the news related to the investment which the candlesticks are reflecting. Looking at candlesticks alone may be not ideal or even a mistake that you could lose all your money on but its definitely a good visual metric on whats currently happening. If I see a hgue dump then I know there will be some bad news behind it.

I do wonder if all those traders who called themself at the professional level hit that level thanks to Technical Analysis aka "candlestick patterns overrated" or just by luck and insider's news/connection. From what I understood, people called candlestick patterns overrated mainly because of the amount of hype for it. Some traders thought being good at Technical Analysis is enough to make 10x of their initial capital, not by the luck of investing early or thanks to the bull market time.

If it took too much time to properly use it and anyone who failed despite full-on Technical Analysis, is considered as 'noob', 'git gud' or 'not the true master of Technical Analysis' then I think I have to disagree. Better spend your time somewhere else. Like understanding the difference from layer 1 to layer 2, many terms in crypto to know which one is better when investing in a new coin. Yes, candlestick patterns are overrated for crypto.

You should stick to what works for you, and if you don't know if it works or not - try it first rather than basing on other people, you don't know their whole story anyway.

This is all I can tell you, dude, you shouldn't believe the influencers on youtube who supposedly teach about how to read a candlestick, because out of 100% maybe only 1% of them are actually telling the truth because almost most of the influencers that this is the only catch is views. So no matter what you look for in the things you want to hear and see in them, you won't really see it.

In short, you are just wasting time, you can only have an idea but what the content creator said, you should not believe 100%, you should analyze it first before you believe it.

If so, it is better to have your own experience so that at least you yourself can say what you should do so that you can understand the meaning of the movement of the candlesticks.

Those youtubers probably do it for sake of views. But believe it that they learn about TA and candlestick patterns in order to analyze every coin they encounter. In both cryptocurrency trading and stock market are really useful to use this, I don't think it's overrated at all.

If those youtubers didn't say anything about that, it doesn't mean it's relevant, still many people uses it and they have really great time with it. People have different thoughts about each strategies and it's up to you to believe which side is the best.

It's merely an opinion. The traders who have been making the profit enough to make them professionals would definitely laugh and disagree with using the word "overrated". It's probably correct to say it's "overrated" for the plebs like us who couldn't use Technical Analysis properly.


I already said that it doesn't word for everyone because, it's a skill that requires thousands of hours of practice, and "the gift". Ask yourself, and be honest, if you have "the gift". If you don't have it, just BUY the DIP and HODL.

For people who understand the importance of candlesticks in their trading, it is not overrated but an important tool for them to earn profits. Because if you don't know how to utilize these candlesticks, you will indeed see it as overrated or not useful. But for most traders, it is their secret tool to understand the market of the specific coin along with their knowledge of what's going on with the project.

Candlesticks are very important, this is our basis for our indicators and with this, you can also know when to buy and sell. This is not overrated and actually the purpose of the candlesticks missed by most of the trader because they are too focus with the other indicators, and they forgot the fundamental of other indicators. Candlesticks works perfectly on it’s purpose, better to focus on this as well.

You would definitely needing it because the main thing that you would really need to look into whenever you do trade is into those candlesticks which we can say that it would really be just in default where you can

see these things and it would really be just relevant if you do really know on how to read up with those indicators on adding it up and since it is provided then you are the ones who should really place up and make

out some analysis through it and make out some immediate actions in correlation to it.I dont know about being overrated yet considering that this is just a typical stuff
that you do need up to read for you to know on what would be your next steps.

IMHO BTC tracks the tech stocks almost verbatim. FAANG Facebook, Apple, Amazon and Google. It really doesn't act on its own. In essence it's a me too tech stock. Analyze those.

I watch Youtube for entertainment of knuckleheads reporting from mom's basement with candlesticks.

Many people use candlestick patterns to analyze a market, but what we must know is that not every signal about the formation of a candlestick will always be correct, so experience is needed to learn its behavior. and the main thing is that we also have to take into account the risk, where not every time we trade will end in profit. therefore this becomes an obstacle for every trader to accept errors in analysis, and of course looking for the next opportunity can be a target

It’s overrated if you don’t fully understand how it really works and you fully rely on it. I get how you come up to this because many influencers is using it as if they are really sure that there prediction is accurate but the reality was TA is just an educated guessing base on previous data and indicators is just a tools that helps TA analyst to save time on math.

Indicators is very helpful if you just know it's limitation. The only thing that makes it overrated is   because of random pro traders wannabe on social media point of view but it's a legit tool for a pro trades.

Got to disagree with that, and overrated is exactly the right word to use here, furthermore technical analysis in my opinion is not just any other skill and won't necessarily make you a better trader or even make you better at using those technical indicators to get better outcome, they're just merely a tool for you to use to get better at predicting probability of what happens next with the chart you're using, and by better I mean maybe 10-20% more than a person without any knowledge about charting and how technical analysis works.

Now if someone really put some real time into some other skill like fixing car engines instead for instance they probably could increase their chance of fixing cars to over 90%, can you get even get close to 90% success rate in trading with TA?

Don't bother with those YouTubers/Influencers that tell you: you can make x amount of money with learning this or that new indicator or learn how to read charts, there's no 100% chance of making money on trading unless it's in bull market and that requires no skill nor TA knowledge, most of them are full of shit and only share their wins and just randomly share some loss here and there to make it look more natural and their source of making money is usually being that Influencer/Youtuber and not being a good trader/chartist/TA guy.

It's not, and I think the word "overrated" is the wrong word to use. Because like ANY skill, to make Technical Analysis very effective for the user, it will take thousands of hours of practice, and "the gift". Simply, there are some people who are going to be more skillful than others in Technical Analysis. The earlier you know if you don't have "the gift", better for you to start using another strategy, BUY the DIP and HODL.

Basically any technical indicator is overrated

Even RSI which is in my opinion one of the more reliable indicators flop at times, and that's even when you go into higher time frames like 1D/Weekly

The only thing these indicators can do whether it's the shape of the candle(Candlestick Pattern), RSI or trend line is that they can give you better entry for your buy or better exit for your sell and that's about it, and expecting them to give you some highly accurate insight would be unreasonable and usually ends up in disappointment and possible loss if you count n these indicators too much.

OP, candle stick patterns, or any "predictive analysis" through drawing lines in a chart, also called "Technical Analysis", are not 100% to give you success in more active forms of trading, like swing trading/day trading. Technical Analysis is not a science, and most of it is merely a subjective analysis depending on the person. You can draw lines in the chart and you could be right, but another person can draw his/her lines too, which could also be right.

Indicators doesnt really have that 100% precision when it comes to price movement prediction but it is really much better on having these kind of tools whenever you do tend to make out some move compared on
having some decisions without having any basis at all.Its not overrated but its totally relevant because this market cant really be having any news or events from time to time which for you to make
use of making some analysis but we know that it cant really be just available most of the time.It is really important to know on reading up candlesticks plus having those indicators which
would potentially able to read up possible trend change or something correlates to that we which we know that it would be that relevant.

No indicator works all the time and candlesticks patterns are not an exception to this, however in my opinion candlesticks are too complex, when it comes to almost any other indicator you can very easily grasp their function and strategies come to your mind about how to use it, however with candlesticks you need to recognize dozens of different patterns, know what they mean and take action based on your knowledge, and that level of execution is simply not realistic for a newbie to achieve.

If you rely only on candlestick pattern ... one day you will feel that you are in a rigged game ... as everything seems against you which it's how you will realize that trading with very limited source as indicator are wrong , despite you might could take a strong pettern as an indicator sometimes ... beware just beware.

I would say it works but not everytime , just study it thoroughly.

Candlesticks are very important even pro trader should not forget to look at the candle because by that alone can tell a possible trend and you can just add an indicator to tell if its correct or not. Yes, candlesticks are a big help to every newbies, that may be a plain chart but still candlesticks can be consider as a signal. This is not overrated, maybe you just need to focus on learning how to trade properly than to think on those negative things, though trading is not just about candlesticks so you should still know how to trade along with the indicators.

Even if you are already that professional or veteran on this market then you would really still need on using up candle stick since there's no other way or thing you would really be going but with reading up charts.

Just as been said that not most of the time we would really be seeing news and fundamentals around which you would be basing up your action with those calls but when market tends to be silent and having

no activity at all then you would really be surely ending up on looking with these candlestick patterns which i would say that it would really be that relevant
in doing so rather than on making pure guess when it comes to your trading position which wont really be that ideal on doing so.

No it's not overrated mate , you can't be a successful trader if you can't read and analysis   those candle stick. Specially when you will go for day trading or mid-term trading then it's very important . Because 100% prediction is never possible in trading, and what is possible is through market analysis. And these analyzes of the market are done by candlesticks. Without the candlesticks, no analysis is possible whether you say long-term or short-term, so in my opinion candlesticks cannot be called overrated , they are very important things for trading.

You shouldn’t be overwhelmed by all those patterns or even indicators. Just use only patterns that is popular to everyone because technical analysis is a self fulfilling prophecy which means analysis will just come true if everyone sees and believes it. So if you are using a pattern or indicator that is hard to understand or see then it will likely not gonna happened because the majority didn’t see it too. Other technical analysts only use old charts to find this pattern just to show that this complex pattern works but remember that this only happening in rare scenario unlike those popular patterns.

I am one of it. I look at the flow of the candle stick to know the next movement of the coin but like you said sometimes it work and sometimes not. We shouldn't forget that there are still other factors which can affect the price of the coins. There is also fundamental analysis other than technical analysis which we can use to improve our predictions.

Maybe the op is watching an actual trade and not a step by step guide about trading because some advanced traders will use other methods which they think more helpful. Don't worry @OP you are not missing anything. Just continue learning and practicing, you will soon get better in trading.

Yes a conjunction of candlesticks with other indicators gives you a very good and confident experience. An experience trader never trade candlesticks alone.


So to add my response to your question. Candlesticks is never overrated. In fact it important like any other indicator you have in your trading techniques and like I said above, a combination of other working indicator is fine but not as much to confuse your trade but no doubt candlesticks are the beauty of trading. It is simple and easy to understand, they are different types of candlesticks, while I was trying to learn I mostly see it called as Japanese candlesticks, perhaps probably it has something with it history with Japan (maybe you can read on the history online). It has different types though, example hammer, inverted 🔨, doji, shooting star, hanging man and many more . If you type types of candlesticks on Google you will find them in abundance and also if you go babypips.com you can learn more of the types, functions, meaning and what market direction comes after you see any of it appearing on your trade

Note my experience so far with candlesticks are

1. You follow it after they have appeared.

2. You have to wait until a candle is formed/completed to understand the meaning or analyse your trade.

3. Every candle is important because it has what it is telling you in the market.

4. Every time frame is important , so you have to wait for the completion depending on if you are a swinger or scalper.

5. The higher the timeframe, the more potent it is

6. It can be used for trend detection, bear or bull, especially for higher time frame.

7. 🔨 or inverted 🔨 can be used to detect new trend, it is very good tool, you see spikes you respect that because it signifies change in trend.

8. This I have noticed that news may not obey the rules of candlesticks. It can change all you know about candlesticks, so is better you stay away from news until a certain time that it has settled. Read more from babypips.

Ok i think many are taking it the wrong way, i didn't say they don't look at candle sticks, of course they look at candles(I think most of them are not blind) like if red candles are going down in a row etc but what I meant is like those patterns like rising soldiers and all that. Very few patterns which they do mention sometimes are doji and engulfing and that too very rare. As far as videos are concerned just find any trading strategy video in YouTube and you will find hardly anyone even mention candlestick patterns.

These basics foundation of trading are the ones I consider important too. And the things that other traders don't care about are the things that are important too for example is the candlesticks.
Using candlesticks and analyzing will help you to analyze the next move of the price or the market structure which you will also use if you are doing other analysis like support and resistance analysis, you will be able to use candlesticks there to help your analysis more precise or good.

Overall it would really give you the idea on whats the market is been doing or the status even lots been saying that it isnt really that precise but at least you do really have the idea on what you are doing.
Unlike when you are just making out trades without any basis or analysis which it would really be turning out to be pure gambling. Make use of these tools rather than on having pure guess or making
orders without doing anything because it would really be that regretful if you do behave on this way.Its not overrated but rather a useful tool which you could really make use at least
and have the chance on giving out those probabilities on making profits.

Looking at the candles are very important, it tells its strength and weaknesses, a possible signal can also be seen but you should not focus on that alone because in trading one indicator is not enough and maybe that is why many traders are not too focused on that candle sticks, because they are using it to complement the other indicators. Candles alone can tell the possible trend if you are a good trading, again trading is too risky and we should not rely in one signal, we need to confirm it always.

Candlesticks are the trader's accumulated buy and sell of the particular time frame and this, it depends on how you look at it, some candles have a good signal that can be used to make you aware that is a good entry to buy or sell. It is good too if you will know different candle sticks pattern became before having an ideal graph or price movement candles already give you a signal.

At least in my opinion candlestick patterns are simply too vague and there are too many different interpretations which can be drawn from them that I do not consider them suitable to create a successful trading strategy, it is better to use other indicators which are way more clear on their meaning and on what to do, so I am not surprised at all that you do not see too many traders using candlestick patterns, there was a time they were widely used but since then many traders have changed their strategies and they have stopped to use them.

They arent overrated but rather they are useful yet there's soo much lots of patterns and signals which you could really get on just reading up a candle stick.It might be very confusing but this one is really just

useful although it might not really be that accurate or precise most of the time but it is really just better on having this rather than on having no analysis at all.You cant really just make out some trading steps

without having any consideration on using these technicals and come to think that not all the time you would really be that seeing sentiments or fundamentals here on the market
which means that you do really need to make use on other ways.

Candle sticks are like primary which can't be avoided in technical analysis so nobody is going to disagree with that but also it's not possible to trade only based on observing the trend movements for a while because trend can change at any time for different reasons so its not overrated its important just to make our own analysis.

The candlestick pattern is commonly used as the basis for trading analysis. It is somewhat telling us what is already happening in the market and that is only its purpose. But if we think that this could help us to predict what will happens next, yes it was, however, this couldn't give assurance that our analysis will be right. We still are aware of the situation that the candlestick represents the changes that happen in the past, not the future.

It's not overrated maybe you are just expecting that you can get 100% result on what you are seeing. Candle stick is just a guide so maybe don't look at it as a money machine for you since even if you can see how the possible movement it will go base on the candle chart you see still there are chance that sudden price reversal will happen so be careful always on your trades and think always taking your profits and find another good position since this cycle is best to do on daily basis.

I still think that it would depend on your approach and your style in trading because that’s how you will know what you would do depending on the current market situation. So I think it’s not overrated or something; it’s just that it is underused in trading.

I know some people who have used Heiken Ashi candles. They are Japanese candles representing the market trend whether up or down trend depending on whether it will change and direction, if I’m not mistaken.

It would depend on how you would use the candle, and as long as it works with the different indicators, you will use it.

If you use indicators with candle sticks, trading would be fun if you also manage your risk and being okay with little profit made. Candle stick is very important for traders.

You sound most like an holder, or a swing trader which is based on weeks or even a month or two. These are the kind of people that can depend on what you are talking about.

Did you mean indicators aren't overrated but they aren't absolute? Because candle sticks are perfect in the information they are revealing, it is not supposed to be completely used for making analyses, it is just the basic step ahead.

That is the reason traders should use low or no leverage, trade with the amount of money they can afford to lose, set stop loss and take profit, or being able to still lose little after unfavorable highly volatile market in a way their trading asset would not be liquidated so easily.

I think the key takeaway here is that relying on candlestick patterns alone isn't helpful in the long run. I mean, it's just part of the formula for you to be able to decide when to short/long or hold.

Or perhaps, even better, you really don't need to memorize thousands of pattern you see on the internet, you just need to understand  the message behind a "wick". Is it a long wick at the bottom of the candle that could represent a reversal or is it just a short wick?

As I was saying, it has to be used in conjunction with other indicators such as the relative strength/weakness of a coin vs BTC, their volume, or maybe moving averages to increase the probability of your directional bias.

I think there's quite a few problems with candlestick patterns that make them harder to trade - one of the main ones being what timeframe should you use? Rising soldiers on a 45m chart might be more likely to become rising soldiers on a 1h chart before the price moves in the other direction.

Most traders with successful strategies will take on information from charts and will rely on a lot of different indicators (and sometimes new ones) and candlesticks might be able to form an extra confirmation on their trade (I don't think candlesticks are profitible to trade alone because they seem to be smaller moves).

No, candlesticks aren't overrated but they aren't absolute. I like to look at candle formation before taking trades. Over time I've come to realize that every minute matters in the life of any candle one is looking at based on its timeframe. Don't rush to trigger trades no matter how bullish or bearish you think an ongoing candle shows its sign. Wait for the close of that candle. Even a minute is enough to cause a change in formation. Perhaps, this is where some traders get it wrong. As for those who don't rely on candles, they of course will have an avalanche of indicators to work with which other traders may not even be using. It's different strokes for different folks.

Don't believe in candlestick patterns or any model because it is a way whales set up traps for the crowd exclusively unprofessional and newbie investors, traders.

If there are things you should pay your attention and time on, it should be on-chain statistics and analytics. Although, it takes more time, months to set up on-chain statistics but it needs more time than candlestick patterns. Therefore you can have a better view based on on-chain stats.

Don't base on anything for your decisions, simply because of only one thing. Let's look at fundamentals and reasons why you invest in Bitcoin, and stay with that. Keep up your belief in Bitcoin and its fundamentals.

Can you let us see the YouTube video that a trader is teaching people about trading and do not mention how candle sticks are so important?

If a trader look at the color of candle sticks, that means it is important, all scalpers and day traders depend on candle sticks, even some holders still depend on candle sticks to determine the price that would be the support and resistance.

Candle stick serves real purpose in trading, without it, many people wouldn't have been a crypto, stock or forex trader. Traders have to check the candle stick to make analyses.

Candles are one of the necessary technical analysis patterns for everyone who wants to trade, especially short and medium-term trading (mainly in day trading,) but predicting the price of Bitcoin in the medium and short term is considered close to impossible, so you find many tend to the averages because they are considered a longer time range.

In general, even in long-term analysis, candles and their patterns are still an important measure, but as I mentioned to you, cryptocurrency trading is considered random compared to Forex (which patterns can be predicted).

I think that everything in TA is taken into account, including the candles. All the trends, bands, wedges and so on are, after all, based on the candles too.
The only thing is that TA itself is (in many/mosts cases) not good to be taken into account alone. There are many "external" factors to be taken into account when predicting what will the price do in the near future.
For example, on Twitter, many tell that the price will go up "any day now", with nice drawings and so on, but they seem to have forgotten we're still in a historic crypto winter, hence also the price going further down is a valid option. Which has actually just happened.

Candle sticks aren't overrated. There are two types of traders based on analysis the fundamental and Technical traders. Although some combine both. But a technical trader can't do an analysis without candle stick, it is so important that it is indispensable. If you claim the YouTube videos you have watched or the other  online articles and videos you have seen on trading hardly talked about candle sticks then what could they be using. Candle sticks is a tool that help interpret past events (price action over time) it makes prediction of future price movement with regards to past events. This candle stick formation tells stories of prices. Just like the three black soldiers, the hanging man and lots of others each gives important signal to traders especially when they form at strategic point in the market

Ok so when i started with trading I try to learn so much about candlestick patterns but when i started looking at other traders on YouTube and even generally online I hardly see anyone even consider them while trading yeah they might look at color of candle but that's all. Specially those advance candlestick patterns like rising soldiers and all that, I don't even remember anyone even mention them once while trading or in any tutorial. So my question is for trading veterans here do they use it or is it really overrated thing which serve no purpose in real time trading?