Why waiting candle to close is important?

[GreatArkansas]

I am sharing a short 1 reason why we waiting for a candle to close is really important when you are entering the trade.

This may different approach for the different approaches to the way we trade or enter a trade.

This example using a support/resistance method to enter a trade.

An example chart is NEO/USDT pair.


If you are using a breakout on resistance method on trading, and if you can see the blue arrow, it's clearly a resistance and about to breakout.

The next candle on that blue arrow, after the candle closed on that blue arrow, you can clearly see in the yellow arrow that, the resistance already broken in the daily time frame.

The problem here is not yet closed, so you may enter on $42, which is already broken the previous days closing price. But at the end of the day, on closing price, it is below the resistance you are looking for. So the result, is kinda reversal, following candles become bearish and lead you to dump.

What're your thoughts? You have any reason why waiting for a candle to close is important? Feel free to share!

[carlfebz2]

When it comes to candle reversals then i do follow several patterns of candles.

-Doji
-Engulfing patterns
-Hammer
-Hanging man

These might be new to other people ears but these are common or traditional
candlestick patterns for reversals.

[Oilacris]

When it comes to candle reversals then i do follow several patterns of candles.

-Doji
-Engulfing patterns
-Hammer
-Hanging man

These might be new to other people ears but these are common or traditional
candlestick patterns for reversals.

For people who do have knowledge about technical indicators then these are pretty common.The question is how they would able to recognize it? Where and when it should be done?

Identifying the common supports and resistances will be the key just like on what had been plotted above  where price had rejected in 44 and bounce back and close up and formed a doji
as one of your examples.

One of the hardest thing is to identify common S&R but there are always some instance that breakout can happen, so you do need still to watch out.

[KnightElite]

There is a popular quote saying that "opening hours are for amateurs while closing hours are for professionals". There are many fake movement in the opening candle and it is the reason why some suggest to have positions in the closing candles. But it is not always like that because there are times that a successful momentum or a breakout that happening in the intraday, the only thing that we should do I think is we should manage our risk very well in order to avoid fake breakout by a certain cryptocurrency. Understanding the price action, candle and validating the trend is really important to have good trading strategy.

[FanEagle]

Obviously studying these indicators and patterns are the hard part, you are not going to be able to understand what is what that easily, you are not going to just be able to read some books and see some charts and suddenly become someone who is a master at this, you are going to take a long time to even be decent at what you are doing for few years before you could actually feel comfortable with reading the charts.

However when you reach that level it becomes easier to make a profit, even the master traders who keep profiting over course of years do have some bad days and lose money, not every trade will be great even after you become an expert, but when you are a veteran that can see stuff without too much work, you will end up with more profits than losses, so overall will be a profit.

[samcrypto]

A single candle means everything, it can be the start of a new up trend or the down trend and usually the real battle in trading happens on the closing hour of the market, well this is the normal scenario on stock market.

I’m not a professional trader, but if you’re an inspiring trader you must understand at least the basic meaning of the candle sticks, and since you are talking about day trading then I think you must wait for the candle to close to confirm the trend, this can save you a lot.

[Mpamaegbu]

When it comes to candle reversals then i do follow several patterns of candles.

-Doji
-Engulfing patterns
-Hammer
-Hanging man

I don't joke with those candle patterns (excluding the Engulfing Patterns) on a higher timeframe like the 4hrs and Daily. Those patterns can easily change the direction of a trend. It's good to wait it out to the last second before triggering off a trade. On a lower timeframe like 30mins to 1hr, not much harm can be done. But whatever a trader does, they should avoid the error of impulse trading. I have been a victim of this in the time past and in most cases it cost me my peace of mind, and sometimes it led to accounts getting burnt. It's a symptom of itching fingers and that isn't a good thing in trading; it messes up one's emotions.

[GreatArkansas]

When it comes to candle reversals then i do follow several patterns of candles.
(....)

I don't joke with those candle patterns (excluding the Engulfing Patterns) on a higher timeframe like the 4hrs and Daily. Those patterns can easily change the direction of a trend.
(....)

These candle patterns are helpful, I also admit that. But we should also think that the higher timeframe we are using, the more accurate we can get, especially if you also based on the candle pattern because there are some cases, for example, you find a bullish pattern in 1-hour time frame, but if you check the higher time frame, it is bearish.

here is a popular quote saying that "opening hours are for amateurs while closing hours are for professionals". There are many fake movement in the opening candle and it is the reason why some suggest to have positions in the closing candles.
(.....)

Exactly, some fake movements e.g. fake breakouts can be one of the best examples here, just like shown in the first post chart. You thought it's already broke the previous resistance which called a breakout, but after the daily candle closing price, bam, it's rejected. So I admit it is a fake price breakout.

[Gozie51]

This is a good thread to show traders what to do in trade. The entering price is important so that you can make better profit with starting of very good level. With entering at the right timing, it will save the trader delay trading which is dangerous.

[Mpamaegbu]

These candle patterns are helpful, I also admit that. But we should also think that the higher timeframe we are using, the more accurate we can get, especially if you also based on the candle pattern because there are some cases, for example, you find a bullish pattern in 1-hour time frame, but if you check the higher time frame, it is bearish.

I don't consider 1hr TF as higher timeframe. The few times I did use it, it messed my trades up. I look at 4hr upwards and then trigger a trade from the 1hr or lesser timeframes. If a pair I intend to trade is bearish on the high timeframe, it means I should be looking out for a bearish entry from the lower timeframe. I like swinging my trades. I don't like watching paint dry. This is a convenient way of trading for me. It eases stress and gives the deserved rest and better ROI which hourly traders don't have the luxury of. A few days ago, I was hasty buying DIA from the 1hr TF because I would be offline line that day and didn't want to miss the train but there was still a pull on the 4hr TF. I took that risk and it cost me 3 days for price to revert to my entry price. Sometimes, such hastiness can cost one even a month.

[lixer]

Closing price is always important due to psychological reasons.

Moreover in technical analysis, we are having very limited number of parameters to be considering to analyse market directions and in this way open-price, close-price along with high and low price levels are vital parameters to predict the upcoming market directions.

Psychologically if you are following a chart and in a given (or any) timeframe, if market closes just above the high price level of previous timeframe then you can assume market is in on a rising mood then you can go for buying and if it closes below the low price level of previous timeframe, then you should go for shorting.

[exstasie]

A single candle means everything, it can be the start of a new up trend or the down trend and usually the real battle in trading happens on the closing hour of the market, well this is the normal scenario on stock market.

With candlestick analysis, I actually prefer multi-candle formations. More reliable.

Consider the difference between the following two patterns. The first is a "Bullish Three Outside Up" pattern, also known as a "confirmed" bullish engulfing. The second is a regular bullish engulfing.





While this second candle confirmation still isn't a 100% guarantee that a downtrend has reversed, it's a pretty strong indication.

[palle11]

There is a popular quote saying that "opening hours are for amateurs while closing hours are for professionals".

You are correct on this saying. As a newbie, I never knew or understand the importance of closing candle and the need to wait for it but now, it is making more sense and helping in understanding direction of trade movement. To wait for the close of a candle is really important to be successful in the business of trade. Closing of any candle whether a minute, an hour or monthly is important for a day trader or swing, whatever your strategy.