Complete Candlestick Patterns Trading Guide with FBS India

Understanding Candlestick Patterns in Indian Markets

Candlestick patterns visually represent price changes on charts, crucial for analyzing forex and CFD markets in India. Our company, FBS, offers advanced charting tools integrated into MT4 and MT5 platforms. These platforms include over 30 technical indicators tailored to detect and highlight patterns relevant to Indian traders.

Each candlestick displays open, high, low, and close prices within a selected timeframe. Indian users can view these patterns on intervals ranging from 1 minute to monthly charts. Alerts and notifications on our platform automatically flag significant formations for user convenience.

The candlestick body reflects the difference between opening and closing values, with green or white bodies indicating bullish trends, and red or black bodies showing bearish pressure. Shadows extending above and below bodies reveal the highest and lowest prices during the period.

Recognizing these patterns helps time market entries and exits during volatile sessions. Our systems process tick data rapidly, with execution speeds around 0.1 seconds, enabling real-time pattern scanning on major currency pairs like USD/INR, EUR/USD, and GBP/USD.

Essential Reversal Candlestick Patterns

Hammer and Hanging Man Formations

The hammer pattern signals bullish reversals at downtrend lows and is identified by a small body, a long lower shadow twice the body’s size, and minimal upper shadow. FBS’s platform automatically detects these using algorithmic criteria to assist Indian traders. Hanging man patterns occur at trend peaks and suggest bearish reversals, requiring volume confirmation from our MT5 indicators.

Doji Star Patterns

Doji candles have nearly equal open and close prices forming cross-like shapes. Our system recognizes four doji types: standard, long-legged, dragonfly, and gravestone. Each offers unique market sentiment clues for Indian forex pairs. Alerts can be customized for doji appearances near support or resistance levels, with statistical significance calculated automatically.

• Hammer: Bullish reversal at downtrend bottom
• Hanging Man: Bearish reversal at trend top
• Doji Variants: Indecision signals with different implications

Using these patterns with volume and support/resistance levels improves trade timing accuracy. Our platform’s alerts allow users to react swiftly to reversal signals in INR-based and global pairs.

Continuation Pattern Analysis

Continuation patterns indicate trend persistence after brief pauses. Our platform identifies patterns like spinning tops, marubozu, and three-methods automatically across forex and CFDs. Indian traders benefit from recognition across 100+ instruments including major forex and commodity CFDs.

Spinning tops have small bodies with long shadows, signaling temporary balance between buyers and sellers. These patterns typically suggest trend pauses, not reversals. Our custom indicators calculate probabilities of trend continuation following these formations.

Marubozu candles show strong momentum with no shadows—white for buying pressure, black for selling. Our system highlights these with color-coded alerts. Three white soldiers and three black crows patterns represent powerful trend continuation signals, tracked automatically by our pattern scanner.

Multi-Candle Pattern Formations

Engulfing Patterns

Bullish engulfing patterns appear when a large green candle fully covers the previous red candle’s body. Our platform calculates engulfing ratios to assess pattern strength, useful for INR pairs during economic announcements. Bearish engulfing patterns are the opposite, with a large red candle engulfing a green one. Combining these with momentum indicators (RSI, MACD) improves reliability.

Harami Patterns

Harami patterns involve a small candle inside the prior candle’s body, signaling trend shifts. Our system detects both bullish and bearish haramis and alerts traders accordingly. The pattern often precedes breakouts; our platform allows setting alerts for price movements beyond harami ranges.

• Engulfing patterns: Confirm with momentum indicators
• Harami patterns: Monitor for breakout triggers
• Use multi-timeframe analysis for confirmation

Stop-loss levels are recommended near pattern highs or lows. FBS India supports automatic stop-loss placement based on these points to minimize risk.

Advanced Pattern Recognition Tools

Our proprietary scanner detects over 50 candlestick formations instantly across markets relevant to Indian traders. Patterns are ranked by historical success specific to Indian market conditions. Notifications alert users immediately when high-probability setups appear on watchlists.

The pattern strength indicator assesses volume, trend context, proximity to support/resistance, and statistical validity. Scores range from 1 to 10, with scores above 7 indicating strong setups. Alerts can be customized by instrument, timeframe, and pattern type.

Push notifications via mobile apps ensure traders stay informed on pattern formations even when offline from desktops. Machine learning algorithms refine pattern detection monthly, adapting to evolving Indian market dynamics.

Practical Pattern Trading Strategies

Entry and Exit Timing

To execute pattern-based trades, wait for the candle following the pattern to close, confirming the signal. Our platform enables one-click trading with predefined risk parameters for swift entries. Stop-loss orders should be placed beyond pattern extremes to limit losses.

Risk Management Applications

We recommend risking no more than 2% of the account per trade. Our position size calculators determine optimal lot sizes based on stop-loss distance and risk tolerance. Pattern confluence, where multiple signals align, increases trade reliability and is easily identified with multi-timeframe analysis tools.

• Confirm entry signals with candle closure
• Use guaranteed stop-loss to protect positions
• Adjust position size to risk limits

Combining these tactics enhances risk-adjusted returns for Indian traders using our FBS platforms.

Platform-Specific Pattern Features

FBS India’s MT4 platform integrates Expert Advisors (EAs) for automated pattern trading. Traders can customize EA settings including pattern types, confirmations, and money management. The MT5 platform expands capabilities with additional timeframes and chart types such as tick, range bars, and Renko charts.

Advanced order types like OCO (One-Cancels-Other) support complex strategies triggered by pattern signals. WebTrader offers browser-based access with full pattern scanning and alert functionality, requiring no software installation.

Mobile apps provide comprehensive pattern tools including drawing, trend lines, and push notifications for pattern alerts. Backtesting features allow traders to analyze historical performance data, including win rates, average returns, and drawdowns.

Market-Specific Pattern Applications

Indian forex markets demonstrate unique patterns influenced by local trading hours (9:15 AM to 3:30 PM IST). Our data shows higher pattern reliability during Mumbai trading sessions due to increased liquidity. Traders can filter patterns by formation time using our platform.

INR currency pairs display distinct pattern behavior around Reserve Bank of India announcements. Our platform integrates an economic calendar highlighting these events, enabling traders to anticipate pattern shifts. Commodity CFDs like gold and crude oil show robust pattern activity during Asian sessions, favored by Indian traders.

• Focus on patterns forming during peak liquidity
• Incorporate economic event timing
• Analyze multi-timeframe signals for confirmation
• Monitor correlation between INR pairs and global markets
• Adjust trading strategies based on volatility

We encourage new users to start with demo accounts to practice pattern recognition without financial exposure. Our educational materials are tailored to Indian market conditions for effective skill development.