[MrPaul]

Thanks for the input guys

I will typically only take a reversal trade on a confirmed long wicked hammer,shooting star, or engulfment at a cluster of S/R, pivot levels, or range fade.

I have a good example from Friday. Range bound day with premarket news. Market forms a high wave and then shooting star candle (blue arrow) indicating lacking demand for higher prices, I wait until a lower close confirms the star (red arrow) and go short.

Price trades down until long wicked hammer forms showing demand accelerating and supply drying up near that area, price trades up until a bearish engulfing (blue arrow) takes over indicating that supply is greater than demand and short sellers have stepped in. I will typically trade the close of an engulfing candle but in a low volume environment it is often best to get extra confirmation of momentum through a closing candle (red arrow).

Once again price trades down unto an area of known temp support and a hammer forms(blue arrow) confirmation is made a couple candles after that (red arrow) and short sellers get squeezed into the close.

Hope that helps the people who are still getting an idea of how to use candles intra day. The important thing Walter and Trader273 mentioned was that price is not reacting to the candles and you always must consider the overall sentiment and trend of the market.

Price does not reverse because of a hammer, thats just the imprint price leaves behind when an overwhelming number of buyers enter the market and the sidelined players then join in to fuel the momentum upward.

The secret to candlestick trading is not just being able to identify a hammer vs a flying zebra (haha), it is knowing when to use them as a tool in an overall scheme.