Profitable Candlestick Patterns Hiding In Plain Sight | OVTLYR University Lesson 20
Candlesticks, Psychology, and Finishing as a Professional
This final class focuses on three core ideas:
1. What candlesticks actually represent
2. Why most patterns are not a strategy
3. Why psychology and discipline determine long-term success
Candlesticks are tools. They are not predictions. The real edge comes from execution and mindset.
1. What a Candlestick Actually Shows
Every standard candlestick shows:
● Open
● High
● Low
● Close
That is it.
It is a history book of what happened during that period. It does not predict what will happen next.
A green candle:
● Close is higher than the open
A red candle:
● Close is lower than the open
The wicks show the extremes reached during that session.
2. Hammer and Inverted Hammer Logic
A hammer:
● Long lower wick
● Small body near the top
Interpretation:
● Sellers pushed price down
● Buyers overwhelmed them
● Price closed near the highs
An inverted hammer:
● Long upper wick
● Small body near the bottom
Interpretation:
● Buyers pushed price up
● Sellers pushed it back down
Important point:
These are interpretations of past behavior. They are not guarantees of future movement.
3. Patterns Are Subjective
There are dozens of named patterns:
● Engulfing candles
● Morning stars
● Evening stars
● Three white soldiers
● Doji
● Hanging man
They may work for some traders.
Subjective tools are difficult to systematize.
If you cannot define strict rules around them and backtest them, they become subjective.
But they require interpretation.
4. Heikin Ashi and Alternative Candles
Some chart types smooth price:
● Heikin Ashi
● Renko
● Point and figure
● Hollow candles
● Area charts
These can distort true price movement.
Standard candles show raw open, high, low, close.
They reflect actual market data without smoothing.
If the goal is clarity, use the real price.
5. Trends Define Bias
Bullish bias examples:
● Close higher than open
● Close higher than prior close
● Higher highs and higher lows
Higher highs and higher lows define an uptrend.
Lower highs and lower lows define a downtrend.
This is objective structure, not interpretation.
6. Midday Noise vs End-of-Day Clarity
Inside a candle:
● Price moves up
● Price moves down
● Volatility happens
You cannot see that internal movement from a single daily candle.
Watching intraday movement can:
● Increase anxiety
● Cause plan deviation
● Trigger emotional decisions
End-of-day data reflects where professionals placed money at the close.
7. You Will Not Catch the Exact Top
A recurring psychological struggle:
● Seeing paper gains
● Watching pullbacks
● Feeling like you “lost” money
Paper gains are not realized gains.
The goal is not catching the top.
The goal is capturing the middle of the move.
You make wealth from the core of the trend, not perfection.
8. Let Winners Run
When structure is aligned:
● Market
● Sector
● Stock
Do not cap your upside with arbitrary targets.
Exit when your rules trigger.
Not when emotions trigger.
9. Psychology Requires Practice
Having a plan is not enough.
You must rehearse:
● What you do when price drops
● What you do when profits expand
● What you do when volatility increases
Execution must be practiced.
Knowledge without discipline does not produce results.
10. Trading Is a Profession
Trading cannot be treated like:
● Gambling
● Entertainment
● A hobby
It must be treated like:
● A business
● A structured system
● A professional discipline
Consistency and discipline determine outcomes.
Just like physical training builds physical strength, rule-based execution builds account strength.
Final Takeaway
Candlesticks show history.
Patterns are tools.
Structure defines bias.
Psychology determines results.
You cannot control the market.
You control preparation, discipline, and execution.
That is the foundation you leave with at graduation.
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