Candlesticks Basics - 4

In this final part of the introduction, the speaker discusses the stages of a candletstick pattern.  He talks about the three criteria needed before any action is taken.  First, there must be a trend (up or down).  Secondly, there must be a pattern that has developed.  Finally, there must be confirmation in the anticipated direction. 

A professional trader does not look for certainty, rather, they look to put a trade on that has the best odds of suceeding. 

He talks through a few setups:  a bearish reversal pattern, continuation pattern, and sideways trend (should be ignored).  He also mentions that a candlestick setup has the most potential on a short term timeframe only, typically from 1 to 6 bars after the setup has been identified and confirmed.
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Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

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