Trading 104: Refining Entries with Confirmations on MT5 / Recognizing Candlestick Confirmation Signals

Step 1: Recognizing Candlestick Confirmation Signals

Candlestick patterns are like the market’s way of whispering its intentions. By learning to read these signals, you can better predict price movements and enter trades with higher conviction. Below are three powerful candlestick-based confirmation techniques to master.

1. Rejection Wicks (Pin Bars)

A long wick (shadow) shows price attempted to break a level but failed.

• A long wick on top near resistance → Sell Signal
• A long wick on bottom near support → Buy Signal

🔹 How to Use on MT5:

• Switch to M15 or M5 timeframe.
• Look for a candle with a long wick rejecting a key level.

📌 Example: If price reaches 1.1000 (support) and forms a long wick on the bottom, it means buyers are defending the level → Consider buying.

2. Engulfing Candles

An engulfing candle completely covers the previous candle’s body, showing strong buying or selling pressure.

• Bullish Engulfing (Big green candle after a red candle) → Buy Signal
• Bearish Engulfing (Big red candle after a green candle) → Sell Signal

🔹 How to Use on MT5:

• Look for engulfing candles near support/resistance levels before entering.

📌 Example: If EUR/USD is at 1.1050 resistance and a bearish engulfing forms, it signals a reversal → Sell trade confirmed.

3. Break & Retest Pattern

Sometimes, price breaks through a key level, but instead of continuing, it comes back to retest before moving in the expected direction.

• Bullish Break & Retest → Price breaks above resistance, retests it as support, then continues up.
• Bearish Break & Retest → Price breaks below support, retests it as resistance, then moves down.

🔹 How to Use on MT5:

• Wait for price to break a level.
• If price returns to the level and rejects it, enter in the direction of the breakout.

📌 Example: If EUR/USD breaks above 1.1050, wait for it to retest 1.1050 as support, then look for a bullish confirmation candle to enter.

Step 2: Applying Confirmation Entries in Live Trading

Now, instead of entering blindly at a key level, use this checklist before entering a trade:

✅ Is the price near a strong key level?
✅ Is there a candlestick pattern confirming entry?
✅ Is there momentum in my trade direction?

If all three conditions are met → Enter the trade.
If not → Wait for better confirmation.

Step 3: Journaling Your Confirmed Trades

Add a “Confirmation” column to your journal to track your new entry methods:

📌 End-of-Session Review:

• Did you wait for confirmation before entering?
• Did confirmation improve your accuracy?
• Were there times when you entered too early?

Final Thoughts

Refining your entries with candlestick confirmations isn’t just about avoiding losses—it’s about building a methodical approach that gives you an edge in the chaotic world of trading. By combining key levels with these patterns, you’re no longer guessing; you’re making informed decisions backed by price action. Practice these techniques in a demo account on MT5 first, tweaking your timeframe and setups until they feel natural. The goal? To turn confirmation into second nature, so you can trade with precision and confidence every time.