Candlestick patterns are important, they depict potential turning points by identifying a change in market sentiment, but only in certain instances. The give defined entry points as well as easily identifiable stop loss areas, candlestick patterns are rule based and therefore are simple to identify. They define emotion in the market, when combined with some easy to follow rules.The bullish Hammer and bearish shooting star, are important single candle patterns when they are observed in well defined areas.The bullish morning star and bearish evening star are important 3 candle patterns that give strong warnings of a potential change in sentiment.
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Candlestick Patterns. As indicated, each candle provides information on the open, close, high and low of an assets price. Each reflects the time period you have selected for your chart. For example, if a 5 minute chart was used each candle shows the open, close, high and low price information for a 5 minute period. Candlestick Trading Patterns play a key role in quantitative trading strategies owing to the various notable features of the candlesticks and the variety of Candlestick Patterns present today. This article will help you gain an understanding of Candlesticks and how to use them, to read candlesticks charts, and to interpret candlestick patterns.