# Three Key Points to Improve Your Win Rate Judgment

Identifying patterns is just the first step. For these signals to truly be effective, you need to pay attention to the following points:

• Position is fundamental: The exact same candlestick pattern can have completely different meanings depending on the trend context in which it appears. For example, a “hammer” with a long lower shadow is only a bottoming signal after a prolonged downtrend. If it appears after a substantial rally, it may actually be a “hanging man,” indicating a potential top. Therefore, determining the current major price trend is a prerequisite for interpreting patterns.

• Volume is an important confirmation tool: Volume is key to verifying the authenticity of reversal signals. When bottom reversal patterns (such as bullish engulfing or inverse head-and-shoulders) form, it’s usually necessary to see a significant increase in volume, indicating a large influx of buyers. For top patterns (such as bearish engulfing or head-and-shoulders top), increased volume also enhances the reliability of the signal, though sometimes the volume during top formation may not be as active as at bottoms.

• Signals require confluence and confirmation: Never make major trading decisions based on a single isolated signal. Technical analysis is the art of probability, and the best way to improve your win rate is to look for “confluence.” For example, when a bullish candlestick pattern (such as a morning star) happens to appear at a key support level (such as a long-term uptrend line), and technical indicators like MACD or RSI also show bullish divergence, the reliability of the reversal increases greatly.

Summary

Mastering these major reversal patterns is equivalent to having the key to understanding shifts in market sentiment. But remember, they offer “possibility,” not “certainty.”

In practice, combining trend context, volume, and other technical indicators for comprehensive judgment is the most effective way to seize market opportunities. I hope this information is helpful for your analysis. If you’d like to learn more about any particular pattern or are interested in continuation patterns, we can continue to discuss further.