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Gap fill idea + Covid recovery Summer playSteady move brewing @ $EEX over 5.65 could see a push towards a breakout at 6.50 looking to fill the gap at 10+ High institutional ownership at 97% but very poor revenue last quarter 12.2M actual vs 85M expected however this company is no stranger to 100+ million quarterly revenue From their last earnings call: "To start, our first quarter results continued to be impacted by the COVID-19 pandemic, as we cancelled or postponed all our live events except for Surf Expo in Orlando in January." "We expect a full resumption of our events calendar beginning this summer. We're planning for the busiest second half in Emerald’s history in terms of the number of events we're producing given the short postponements that have occurred. While the outlook for attendance at our shows remains uncertain, and could well be challenged in the near term, even for events we do stage with the lingering impacts of COVID we’re encouraged with the early success that we're seeing from other operators in Asia, where recovery seems further along, and we've seen several recent events, which have matched or exceeded pre-COVID levels."
NYSE:EEXLong
by thugoat
Two Line Patterns, Part 6 GuideGuide Candles Patterns Candlestick patterns are usually quite good when trying to finish an analysis as it can help you confirm a trend. Basic Candles - Two Line Patterns 1- Bearish Doji Star Description: The first Bearish Doji Star line has to be a white candle that appears as a long line (White Candle, Long White Candle, White Marubozu, White Marubozu Opening or White Closed Marubozu). The next candle is any doji candle except the four price Doji. The body of the doji is above the body of the previous candle. The length of the doji shadows does not matter. Bearish star Doji appears in an uptrend and belongs to the group of bearish reversal patterns. Its appearance must be confirmed in the following candles. This pattern is distinguished by a space between the high of the first candle and the low of the next candle or between the bodies of these two candles. The first confirmation is when the gap in the candlestick pattern is covered. It can be a black candle whose body is completely below the body of the doji. Another stronger type of confirmation is when an uptrend line or support zone is broken. Building: First candle • Or a candle in an uptrend • Or white body Second candle • Or a doji candle • Or one body above the body of the first candle Example: BAC,24 Jun, 2002. Chart 1d. 2- Bullish Separating Lines Description: The bullish parting lines are a two-line bullish continuation pattern. Her two candles appear as a long row. The first line is a black candle while the second is white. The name of the pattern comes from the fact that the opening price of the first candle is equal to the opening price of the second line, that is, the candles spread in opposite directions. Building: First candle •Or an uptrend candle •Or black body •Or appears as a long line Second candle •Or white body •Or the opening price is equal to the previous opening price Example: TRV,04 May, 2007. Chart 1d. 3- Matching High Description: Matching High is built with two marubozu sails that have white bodies. In other words, it can be a white Marubozu or a close-up white Marubozu. The first line of the pattern appears as a long line, while the second can be long or short. Both lines of candles should close at the same level. Also, the open of the second candle must be higher than the open of the previous candle. The Matching High belongs to the group of bullish reversal patterns. Its appearance on the chart must be confirmed in the following candles, that is, breaking the closest support zone, which can be formed by the first line of a Matching High pattern. The best confirmation is in the form of a black candle that the closing price is below the opening price of the line of the first pattern. Building: First candle • Or a candle in an uptrend • Or white body • Or without upper shadow • Or appears as a long line Second candle • Or white body • Or the opening price is higher than the previous opening price • Or the closing price is at the level of the previous closing price • Or without upper shadow Example: PG,04 Nov, 2010. Chart 1d. 4- Bearish Engulfing Description: The Japanese name for the bearish enveloping pattern is tsutsumi, which means the Japanese art of packaging and is derived from the verb whose meaning is to wrap (a present). In English, we use the word wrap because the second line wraps (overlaps) the first line of the pattern. Bearish Engulfing is a two-line pattern in which the body of the white candle in the first line is engulfed by the body of the black candle in the second line. The first line can be any basic white candle, appearing as a long or short line. It can even be a doji candle, except for the four price Doji. The second line is any black candle that appears as a long line: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. Shadows don't matter what is explained in the following article: Two-line patterns. The pattern appears in an uptrend and predicts its reversal. If the volume of operations grows in the second line, the reliability of the pattern is higher. Bearish engulfing pattern needs confirmation on subsequent candles. Morris created the Three Outside Down pattern as confirmation of the bearish engulfing. In general, it is recommended to confirm all patterns. Confirmation can be in the form of breaking out of the nearest support zone or a trend line. It is crucial where on the chart a bearish envelope appears. Depending on the market context, the candlestick pattern may just be a short break before the market rallies. Especially if below a bearish engulfing there is a strong support area. If a bearish engulfing pattern is confirmed, its second line may form a resistance zone. Building: First candle • Or a candle in an uptrend • Or white body Second candle • O black body • Or the body of the candle wraps around the body of the previous candle (white) Example: MCD ,20 Dec, 2012. Chart 1d. 5- Bullish Tasuki Line Description: The Tasuki bullish line belongs to the group of tasuki patterns and predicts a reversal of the downtrend. Both candles appear as a long row. The first line has a black body, while the second line has a white body. The length of the shadows doesn't matter; however, the volume (if available in the given market) of the second line is significant. The relation of the bodies is insignificant. The pattern requires confirmation, that is, to break out of the nearest resistance zone or trend line. It happens that a bullish Tasuki line appears as a second and third line of a falling Tasuki gap or three methods of falling gap. Building: First candle • Or a candle in a downtrend • O black body • Or the high price above the previous low price • Or appears as a long line Second candle • Or white body • Or the opening price greater than or equal to the previous closing price • Or the closing price above the previous opening price • Or appears as a long line Example: DIS,16 Apr, 2012. Chart 1d. 6- Matching Low Description: The Matching Low belongs to the patterns that occur less frequently in the charts. Having two candles with no lower shadows in a row (i.e. closing Black Marubozu or Black Marubozu), closing at the same price, is an unusually rare situation. The first line of the pattern appears as a long line in a downtrend. The second line opens below the line of the previous candle. As already mentioned, both candles close at the same level. The pattern is bullish reversal and appears in a downtrend. It must be confirmed in the following candles. Your front line acts as a resistance zone. The classic interpretation of the Matching Low pattern is composed of two candles with no lower shadows (the upper shadow is allowed). Bulkowski, however, relaxed this requirement, resulting in significantly more recognized patterns. Building: First candle • Or a candle in a downtrend • O black body • Or no lower shadow • Or appears as a long line Second candle • O black body • Or the opening price is below the previous opening price • Or the closing price is at the level of the previous closing price • Or no lower shadow Example: NDAQ,21 Nov, 2003. Chart 1d. 7- Bearish Harami Description: Bearish Harami is a two-line pattern in which the body of the white candle in the first line wraps around the body of the black candle in the second line. The first line can be any basic candle with a white body, appearing as a long line, i.e .: White Candle, Long White Candle, White Marubozu, Opening White Marubozu, Closing White Marubozu. Candles that are spinning tops, even with white bodies, cannot appear on the first line. The second line can be any basic black candle, appearing as a long or short line. It can even be a doji candle, except for the four price Doji. Shadows don't matter what is explained in the following article: Two-line patterns. The pattern appears in an uptrend and predicts its reversal. The Bearish Harami pattern needs confirmation on subsequent candles. Morris created the Three Inside Down pattern as confirmation of the Bearish Harami. The pattern can be confirmed by breaking the nearest support zone or a trend line. If a candle that follows the appearance pattern closes above the opening price of the second line (i.e. black candle), the uptrend is likely to continue. On the contrary, when a candle that follows the pattern closes below its second line, there is a possibility that the uptrend will stop. One should be careful when the front line of a bearish Harami has a long white body, as it can form a strong support zone. The market context in which a bearish Harami is developing is more important than the bodies of the candles or the length of the shadows. Building: First candle • Or a candle in an uptrend • Or white body Second candle • O black body • Or the body of the candle wrapped by the body of the previous candle (white) 8- Dark Cloud Cover Description: Dark cloud cover is among the most popular candle patterns. Your first candle must be a white candle that appears as a long line (White Candle, Long White Candle, White Marubozu, White Marubozu Opening, or White Closed Marubozu). The second candle is a black candle that appears as a long line (Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, or Closing Black Marubozu). The opening price of the second candle should be above the high of the previous candle. However, it is acceptable that these two prices are the same. The close of the second candle should be below the midpoint of the first candle, but not below its open. Dark cloud cover is a classic bearish reversal pattern, appearing at the end of an uptrend. After definite rallies, the second candle in the pattern opens creating a price gap, however, it closes below the midpoint of the previous candle, demonstrating the weakness of the market. The reliability of the pattern is higher if the trading volume increases on the second line. Like any other pattern, it must be confirmed by the following candles. Confirmation can be, for example, in the form of breaking a support level or a trend line. If the pattern managed to reverse an uptrend, its second candle creates a strong resistance zone. Building: First candle • Or a candle in an uptrend • Or white body Second candle • O black body • Or the opening greater than or equal to the previous maximum • Or the close below the midpoint of the previous candle • Or the close above the previous open Example: JPM , 20 Sep, 10, 1d Chart. 9- On Neck Description: The On Neck is a two-line bearish continuation pattern. The first line is a candle that has a black body, which appears as a long line. The second line is a candle with a white body, but the length of the upper and lower shadows cannot exceed more than twice the length of the body. The closing price of the second candle is at the level of the low price of the first candle. The pattern appears in a downtrend and predicts its continuation. It should be confirmed in the following candles with a candle that closes below the opening price of the second line. Building: First candle • Or a candle in a downtrend • O black body • Or appears as a long line Second candle • Or white body • Or the opening price below the previous closing price • Or the closing price is equal to the previous low price Example: NEM , 07 Oct, 2002, 1d Chart. 10- Bearish Harami Cross Description: The bearish Harami Cross is a bearish two-line reversal pattern. The first candle envelops the second, being a doji candle, including the shadows. The first line of the pattern can be any white candle that appears as a long line, that is: White candle, Long white candle, White Marubozu, White Marubozu that opens, White Marubozu that closes. Tops with white bodies are not accepted. The second line is a doji candle that has two shadows that form a cross. The Bearish Harami Cross appears in an uptrend and predicts its reversal. The patterns should be confirmed on the next closest candles. A doji candle appearing as the second line indicates market indecision. Interestingly, to recognize the pattern as valid, your first line must be a long white candle, which can become an important support zone. For this reason, care must be taken when such a pattern forms on the chart. Building: First candle • Or a candle in an uptrend • Or white body • Or appears as a long line Second candle • Or a doji candle with two shadows • Or the candle (including the shadows) is enveloped by the body of the previous candle Example: MRK, 06 Feb, 2009, 1d Chart. 11- Descending Hawk Description: The Descending Falcon is a bearish two-line reversal pattern that belongs to the harami family of patterns. The body of the candle in the first line wraps around the body of the second line. The shadows do not matter with respect to both candles. The first line of the pattern can be any candle with a white body, which appears as a long line. The following candles are allowed: White Candle, Long White Candle, White Marubozu, Opening White Marubozu, Closing White Marubozu. Candles classified as doji or spinning top are not allowed. The Descending Falcon's second candle can be any white candle, appearing as a long or short line, i.e., Short White Candle, White Candle, Long White Candle, White Marubozu, White Marubozu Opening, White Marubozu Closed. Candles classified as doji or spinning top are not allowed. Controversies about how to consider bodies and shadows are described in this article: Two-line patterns. The Descending Falcon appears in an uptrend predicting its reversal. It has to be confirmed in the following candles in the form of a breakout of the support area or a trend line and closing significantly below. Care must be taken in the first line that forms a support zone. Building: First candle • Or a candle in an uptrend • Or white body • Or appears as a long line Second candle • Or white body • Or the body of the candle wrapped by the body of the previous candle • Either appears as a long or short line Example: KO , 08 Mar 9:00, 2011, 12h Chart. 12-Piercing Description: The Piercing is a bullish equivalent pattern of the bearish Dark Cloud Cover. The first day of the pattern is a black candle that appears as a long line in a downtrend, except for the tops and doji candles. In other words, the first line can be one of the following basic candles: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. The candle in the second line is exactly opposite to the first line, that is, it can be one of the following basic candles: White candle, Long white candle, White Marubozu, Opening white Marubozu, Closing white Marubozu. The candle in the second line should appear as a long line. Its opening must be less than the low of the previous candle. However, it is acceptable that both prices are the same. The closing price of the second candle should be between the midpoint and the open of the previous candle. The Piercing pattern can look like a classic reverse pattern due to its appearance. Price opens lower after the first black candle, however the market shows its strength and closes above the midpoint of the first line. In the stock market, the reliability of the pattern is higher when an increase in trading volume can be observed on the second line. Like any other pattern, the Piercing pattern must be confirmed by the following candles. Confirmation can be, for example, in the form of a breakout of a support zone or a trend line. If a perforation pattern is confirmed, its second line acts as a support area. Building: First candle • Or a candle in a downtrend • O black body Second candle • Or white body • Or the opening below or equal to the previous low • Or the close above the midpoint of the previous candle's body • Or the close below the previous opening Example: PFE, 06 Feb, 2012, 1d Chart. 13-Falling Window Description: The descending window is classified as a bearish continuation pattern. The lines of both patterns can be basic candles, appearing as a long or a short line. The only exception is the Four Price Doji, which cannot appear as part of the pattern. The pattern is characterized by a price gap that appears between the low of the first candle and the high of the second candle. Windows are known in Western technical analysis and are often referred to as gaps. The Japanese are very particular about windows and claim that the trend will continue until the gap is closed. Shimizu mentions that in Japan they also call holes hollows. Morris doesn't think of windows as patterns that look strange. That is, he is not doing the same with patterns like kick up / kick down, two candlestick shooting star / inverted hammer or others, where a price gap is also required. Nison and Bulkowski also find windows as patterns, but note that Bulkowski's interpretation is somewhat different than ours (see Ascending Window for more details). Nison mentions that windows are among the most important candle patterns. In our interpretation, for the descending window, it is sufficient that the closing price of the first candle is below the trend line, while the opening price can be located above. The assumption that the descending window pattern requires a few candles in a downtrend, before it occurs, can lead to missing very significant signals. Particular attention should be paid to the second candle of the pattern, which may be part of another conflicting pattern, that is, a bullish pattern. In such unclear situations, the focus should be on the general market context and the resistance / support lines. Building: First candle • Or any candle except the four price Doji • Either a candle in a downtrend or closing below the trend line Second candle • Or any candle except the four price Doji • Or the candle is high below the low of the previous candle Example: INTC ,21 Sep, 2012, 1d Chart. 14-Rising Window Description: The ascending window is classified as a bullish continuation pattern. The lines of both patterns can be basic candles, appearing as a long or a short line. The only exception is the Four Price Doji, which cannot appear as part of the pattern. The pattern is characterized by a price gap that appears between the high of the first candle and the low of the second candle. Nison and Bulkowski in their books provide examples with a visible uptrend prior to the occurrence of a pattern that can be confusing. In our interpretation, for the ascending window, it is sufficient that the closing price of the first candle is above the trend line, while the opening price can be below. The assumption that the ascending window pattern requires a few candles in an uptrend, before it occurs, can lead to missing very significant signals. Windows are known in Western technical analysis and are often referred to as gaps. The classical interpretation says that after three occurrences of the ascending window, the trend can be reversed. Most often, the Popup Window acts as a support. Nison claims that when a rising window is preceded by a bullish reversal pattern, its reliability is higher. Our research also says that if the second candle of a rising window forms at high volume, its reliability is better. Special attention should be paid to the second candle in the pattern. A black candle or a doji candle can weaken the signal. The second line may be part of another conflicting pattern. Sometimes the Ascending Window can be recognized at the same time also as the Bearing Doji Star or the Two-Candle Shooting Star. In such unclear situations, the focus should be on the general market context and the resistance / support lines. A warning is needed for traders who take a position on the second line of the pattern. That is, when the price opens higher, the candle can still close lower producing a black body. So instead of having a rising window, we can have a bearish reversal pattern, for example dark cloud cover or bearish engulfing. Either way, the most important thing is to be consistent. Therefore, when presenting any statistics from the ascending window, it is important to remember which interpretation is used to compare apples to apples. Building: First candle • Or any candle except the four price Doji • Or a candle in an uptrend or closing above the trend line Second candle • Or any candle except the four price Doji • Or the candle is low above the previous high candle Example: PFE, 06 Feb, 2012, 1d Chart. You should have mastered the theory by now. So now it will only be the examples. Time to put it into practice. 15- Bearish Separating Lines Description: Bearish parting lines are classified as a bearish continuation pattern. The first line is a white candle that appears as a long line in a downtrend. The second line is a black body candle that appears as a long line. Both candles open at the same price level and then the prices separate. The pattern appears very rarely on candlestick charts. Building: First candle • Or a candle in a downtrend • Or white body • Or appears as a long line Second candle • O black body • Or the opening price is equal to the previous opening price Example: PFE, 17 Jan, 2003, 1d Chart. 16- Homing Pigeon Description: The Homing Pigeon is a two-line bullish counterpart of the Descending Hawk. It is also closely related to the Bullish Harami pattern. All of these patterns belong to the harami family of patterns. The first line, being a black candle, wraps around the second line, being also a black candle. The length of the candle shadows does not matter. The first candle in the pattern can be any black candle that appears as a long line, i.e .: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. The second candle can be any black candle that appears as a short or long line, that is, Short Black Candle, Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. As a bullish reversal pattern, the carrier pigeon must form in a downtrend because it predicts its reversal. The pattern should be confirmed on subsequent candles. It can be, for example, a bullish breakout of a resistance zone or a trend line and a close above the pattern. Otherwise, the appearance of the pattern should be seen as a temporary pause from a price decline. One must be careful because the first line of the Homing Pigeon pattern forms an area of ​​resistance. Building: First candle • Or a candle in a downtrend • O black body Second candle • O black body • Or the body of the candle wrapped by the body of the previous candle Example: JNJ , 15 Mar, 2011, 1d Chart. 17- Thrusting Description: Thrusting is a two-line bearish continuation pattern. It is very similar to the perforation pattern. The first candle is a black candle that appears in a downtrend as a long line. It can be one of the following basic candles: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. The second candle also appears as a long line but has a white body and opens below the previous low. The second line closes between the midpoint of the previous candle and its closing price. It can be one of the following basic candles: White Candle, Long White Candle, White Marubozu, White Marubozu Opening, White Marubozu Closing. Spinning tops and doji candles cannot appear as part of the pattern. The Thrusting pattern appears in a downtrend that predicts its continuation. The forecast should be confirmed in the form of a black candle following the pattern. That candle should close below the opening price of the second line. If a volume data is relevant to a certain market (for example, stock market), it should increase for the candles that form the pattern. If a white candle follows the pattern, a trend reversal can be expected. In that case, the white candle that follows the pattern should close above the opening price of the first line. Alternatively, the candle can break a trend line or the nearest resistance zone. It is good if a higher trading volume (if available for a given market) accompanies that candle. Building: First candle • Or a candle in a downtrend • O black body • Or appears as a long line Second candle • Or white body • Or the opening below the previous low • Or the close above the close of the previous candle • Or the close below the midpoint of the previous candle's body • Or appears as a long line Example: XOM, 06 Sep, 2006, 1d Chart. 18- Bearish Tasuki Line Description: The Bearish Tasuki line is a bearish two-line reversal pattern, which belongs to the family of tasuki patterns. The first line of the pattern is a white candle that appears as a long line. The second line also appears as a long line, but the candle is black. The length of the shadows doesn't matter; however, the volume (if available in the given market) of the second line is significant. The relationship of the bodies is not important. The pattern requires confirmation, that is, to break out of the nearest resistance zone or trend line. The bearish Tasuki line can appear as a second and third candlestick from patterns such as Upside Tasuki Gap or Upside Gap Three Methods. Since these patterns are bullish, we deal with so-called conflicting lines, that is, opposite patterns that occur at the same time. Building: First candle • Or a candle in an uptrend • Or white body • Or the low price below the previous high price • Or appears as a long line Second candle • O black body • Or the opening price below or equal to the previous closing price • Or the closing price below the previous opening price • Or appears as a long line Example: HD , 26 Jan, 2011, 1d Chart. 19- In Neck Description: The In Neck pattern is a two-line bearish continuation pattern, which implies that the pattern appears in a downtrend. The first line is a black candle that appears in a downtrend. The second line is a white candle, and the length of the upper and lower shadow cannot exceed more than twice the length of the body. Also, the closing price of the second candle should be slightly above the previous closing price (up to 15% of the body of the first line). The pattern should be confirmed by a subsequent candle that closes below the closing price of the second line. The In Neck pattern rarely occurs on candlestick charts. Building: First candle • A candle in a downtrend • Black body • Appears as a long line Second candle • White body • The opening price below the previous closing price • The closing price is slightly above the previous closing price (up to 15% of the body of the first line) Example: INTC, 19 Sep, 2012, 1d Chart. 20- Turn Down Description: The Turn Down pattern is a bearish reversal pattern. Whenever we write about pattern confirmation, we mention that it can be, for example, in the form of a trend line breakout. The Turn Down pattern, and its bullish counterpart, the Turn Up pattern, works exactly like this. The first candle in the pattern can be any basic candle except the four price Doji. It can appear as a long or short line. Your entire body should be above the trend line, although your lower shadow can reach below it. The second line of the pattern has to be a black candle, which appears as either a long or a short line, except for the four price Doji. The body of the candle should be completely below the trend line. The volume of the second candle must be above the average of the last candles. The size of the bodies does not matter. However, as usual, the market context in which the pattern appeared is critical. The Turn Down pattern requires a confirmation on the following candles, in the form of breaking the closest support level. It happens that a price gap is formed between the first and second lines of the pattern. In such cases, the reliability of the pattern is higher, assuming it does not appear within a strong support zone. The reliability of the pattern decreases when the market retreats above the trend line. Building: First candle • Or any uptrend candle except the four price Doji • Or a candle with a body above the trend line Second candle • O black body • Or a candle with a body below the trend line Example: PFE, 22 Oct, 2012, 1d Chart. 21- Bullish Doji Star Description: The first line of the bullish Doji Star is a black candle that appears as a long line (Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu). The next candle is any doji candle, except the four price Doji. The body of the doji is below the body of the previous candle. The length of the doji shadows does not matter. The Bullish Doji star appears in a downtrend and belongs to the group of bullish reversal patterns. Its appearance must be confirmed in the following candles. This pattern is characterized by a space between the low of the first candle and the high of the next candle or between the bodies of these two candles. The first confirmation is when the gap in the candlestick pattern is covered. It can be a white candle whose body is completely above the body of the doji. Another stronger type of confirmation is when a downtrend line or resistance zone breaks. Morris and Bulkowski point out that doji shadows shouldn't be too long. It may indicate that only the doji candle that appears as a short line should be considered valid. However, our tests show that the introduction of this additional condition does not have a significant impact on the number of patterns found. Building: First candle • Or a candle in a downtrend • O black body Second candle • Or a doji candle • Or a body under the body of the first candle Example: MSFT, 30 Dec, 2005, 1d Chart. 22- Inverted Hammer Description: The inverted hammer pattern is made up of two candles. The first candle appears as a long line and has a black body. That means it can be one of the following candles: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. Candles that are spinning tops, even with black bodies, cannot appear on the first line. The second candle can be a white or black spinning top, appearing as a long or short line. It can be one of the following candles: white top, black top, high wave. The lower shadow does not exist or is shorter than the body. The upper shadow must be at least 2.5 times longer than the body. The pattern appears in a downtrend, predicting its reversal. It should be confirmed in the form of a breakout of a closer resistance zone or a trend line. As always, the pattern requires confirmation on subsequent candles, which means that the nearest resistance zone or trend line should be suppressed. The market context in which the pattern appears is critical. The pattern can occur within the Morning Star three-line pattern, being its confirmation. Morris states that the upper shadow cannot be longer than the body of the candle. This is most likely a typo because the examples in the book feature candles with significantly longer shadows than the bodies. Presumably Bulkowski has noticed this error because, although not directly, he mentions that there are different definitions of the upper shadow. Building: First candle • Or a candle in a downtrend • O black body Second candle • Or a white or black small-bodied candle • Either there is no lower shadow or the shadow cannot be longer than the body • Or upper shadow at least 2.5 times longer than the body • Or the opening below or at the level of the close of the previous candle Example: MRKSY , 08 Apr, 2015, 1d Chart. 23- Turn Up Description: The Turn Up pattern is a bullish reversal pattern. Whenever we write about pattern confirmation, we mention that it can be, for example, in the form of a trend line breakout. The Turn Up pattern, and its counterpart, the Turn Down pattern, works exactly like this. The first candle in the pattern can be any basic candle except the four price Doji. It can appear as a long or short line. Your entire body should be below a trend line, although your upper shadow may reach above it. The second line of the pattern has to be a white candle, which appears as a long or short line, except for the four price Doji. The body of the candle should be completely above the trend line. The volume of the second candle must be above the average of the last candles. The size of the bodies does not matter. However, as usual, the market context in which the pattern appeared is critical. The Turn Up pattern requires a confirmation on the following candles, in the form of breaking the closest resistance level. It happens that a price gap is formed between the first and second lines of the pattern. In such cases, the reliability of the pattern is higher, assuming that it does not appear within a zone of strong resistance. The reliability of the pattern decreases when the market retreats below the trend line. Building: First candle • Or any uptrend candle except the four price Doji • Or a candle with a body below the trend line Second candle • Or white body • Or a candle with a body above the trend line Example: JNJ , 05 Sep, 2012, 1d Chart. 24-Bullish Engulfing Description: The bullish engulfing is a two-line pattern, in which the body of the black candle on the first line is engulfed by the body of the white candle on the second line. The first line can be any basic black candle, appearing as a long or short line. It can even be a doji candle, except for the four price Doji. The second line is any white candle that appears as a long line: White Candle, Long White Candle, White Marubozu, Opening White Marubozu, or Closing White Marubozu. Spinning tops and doji candles are not acceptable. The length of the shadow does not matter, neither in the first nor in the second line. The pattern appears in a downtrend and predicts its reversal. If trading volume data is available for a given market and grows on the second line, the reliability of the pattern is higher. The bullish engulfing pattern needs confirmation on subsequent candles. Morris created the Three Outside Up pattern as confirmation of the Bullish Engulfing. In general, it is recommended to confirm all patterns. Confirmation can be in the form of breaking out of the nearest resistance zone or a trend line. It is crucial where, on the chart, a bullish envelope appears. Depending on the market context, the candlestick pattern may just be a short break before the market declines. Especially if, above a bullish envelope, there is an area of ​​strong resistance. If a bullish engulfing pattern is confirmed, its second line may form a support zone. Building: First candle • Or a candle in a downtrend • O black body Second candle • Or white body • Or the body of the candle wraps around the body of the previous candle (black) It is the opposite of Bearish Engulfing. 25- Kicking Down/Bearish Kicking Description: The Kicking Down pattern (also called Bearish Kicking) is made up of two marubozu candles that appear as long lines. The first candle in the pattern is a white Marubozu; the second line is a BlackMarubozu. The opening of the second line is lower than the previous opening, which forms a price gap. Depending on the trend in which the pattern appears, you can predict its continuation or reversal (see The Kicking Up article). The next candle determines the direction of the price. The pattern is extremely rare, especially in liquid markets. Building: First candle • Or a white Marubozu • Or appears as a long line Second candle • Or a black Marubozu • Or downward price gaps • Or appears as a long line Example: BLK , 21 Apr, 2010, 1d Chart. 26- Tweezers Bottom Description: The bottom of the calipers is classified as a two-line pattern, although it can be made up of more than two candles. The first line can be any candle of any color except the four price Doji. The following candles can be of any color and type, except for the four price Doji. Also, all low prices must be the same. The bottom of the calipers can be part of other patterns in a downtrend. It must be confirmed in the following candles. The pattern occurs rarely. Building: First candle • Or a candle in a downtrend • Or any color • Or any candle except the four price Doji Second candle • Or any candle except the four price Doji • Or any color • Or the low price equal to the previous low price All the following days • Or any candle except the four price Doji • Or any color • Or the low price equal to the previous low price Example: PG , 23 Nov, 2011, 1d Chart. 27- Tweezers Bottom Description: The bottom of the calipers is classified as a two-line pattern, although it can be made up of more than two candles. The first line can be any candle of any color except the four price Doji. The following candles can be of any color and type, except for the four price Doji. Also, all low prices must be the same. The bottom of the calipers can be part of other patterns in a downtrend. It must be confirmed in the following candles. The pattern occurs rarely. Building: First candle • Or a candle in a downtrend • Or any color • Or any candle except the four price Doji Second candle • Or any candle except the four price Doji • Or any color • Or the low price equal to the previous low price All the following days • Or any candle except the four price Doji • Or any color • Or the low price equal to the previous low price Example: PG , 23 Nov, 2011, 1d Chart. 28- Bullish Harami Description: The Bullish Harami is a two-line pattern in which the body of the black candle in the first line wraps around the body of the white candle in the second line. The first line can be any basic candle with a black body, appearing as a long line, that is: Black candle, Long black candle, Black Marubozu, Black opening Marubozu, Black closing Marubozu. Candles that are spinning tops, even with black bodies, cannot appear on the first line. The second line can be any basic white candle, appearing as a long or short line. It can even be a doji candle, except for the four price Doji. Shadows don't matter what is explained in the following article: Two-line patterns. The pattern appears in a downtrend and predicts its reversal. The Bullish Harami pattern needs confirmation on subsequent candles. Morris created the Three Inside Up pattern as confirmation of the Bullish Harami. The pattern can be confirmed by breaking the nearest resistance zone or a trend line. If a candle that follows the appearance pattern closes below the opening price of the second line (i.e. white candle), the downtrend is likely to continue. On the contrary, when a candle that follows the pattern closes above its second line, there is a possibility that the downtrend will stop. Care should be taken when the first line of a bullish Harami has a long black body, as it can form a strong resistance zone. The market context in which a bullish Harami is developing is more important than the bodies of the candles or the length of the shadows. Building: First candle • Or a candle in a downtrend • O black body Second candle • Or white body • Or the body of the candle wrapped by the body of the previous candle (black) Example: BAC , 14 Nov, 2012, 1d Chart. 29- Tweezers Top Description: Description: The upper part of the calipers is classified as a two-line pattern, although it can be made up of more than two candles. It acts as a bearish reversal. The first line can be any uptrend candle of any color except the four price Doji. The following candles can be of any color and type except the Four Price Doji, but all high prices must be the same. The tops of the calipers can be part of other patterns in an uptrend. It must be confirmed in the following candles. Building: First candle • Or a candle in an uptrend • Or any color • Or any candle except the four price Doji Second candle • Or any candle except the four price Doji • Or any color • Or the high price is equal to the previous high price All the following days • Or any candle except the four price Doji • Or any color • Or the high price is equal to the previous high price I did not find an example for this Pattern .. Sorry. 30- Kicking Up/Bullish Kicking Description: The Kicking Up pattern (also called the Bullish Kicking) is made up of two marubozu candles that appear as long lines. The first candle in the pattern is a black Marubozu; the second line is a white Marubozu. The opening of the second line is higher than the previous opening, which forms a price gap. We assume that the pattern can be reversible and continuous. Therefore, the trend prior to the occurrence of the pattern is not important: whenever we are faced with a Kicking Up pattern, the white candle signifies buying demand, predicting the price increase. As Shimizu writes, the bullish line pattern can continue an uptrend or reverse a downtrend. Because the bullish parting lines are quite similar to momentum, we made the same assumption. The pattern is extremely rare, especially in liquid markets. It can be seen as more of an exoticism rather than a seriously negotiated pattern. Building: First candle • Or a black Marubozu • Or appears as a long line Second candle • Or a white Marubozu • Or upward price differences • Or appears as a long line I did not find an example for this Pattern .. Sorry. 31- Bullish Harami Cross Description: The Bullish Harami Cross is a bullish two-line reversal pattern. The first candle envelops the second, being a doji candle, including the shadows. The first line of the pattern can be any black candle that appears as a long line, i.e .: Black Candle, Long Black Candle, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. Tops with black bodies are not accepted. The second line is a doji candle that has two shadows that form a cross. The Bullish Harami Cross appears in a downtrend and predicts its reversal. The pattern should be confirmed on the next closest candles. A doji candle appearing as the second line indicates market indecision. Interestingly, to recognize the pattern as valid, your first line must be a long black candle, which can become a major resistance zone. For this reason, care must be taken when such a pattern forms on the chart. Building: First candle • Or a candle in a downtrend • O black body • Or appears as a long line Second candle • Or a doji candle with two shadows • Or the candle (including the shadows) is enveloped by the body of the previous candle Example: 32- Last Engulfing Bottom Description: The definition of the latest engulfing bottom is exactly the same as the bearish engulfing pattern, except for the trend requirement. The bearish engulfing bottom appears within an uptrend, while the last engulfing bottom occurs within a bearish trend. One wonders why such a pattern can reverse a downtrend. That is, there is a downtrend, but the bearish momentum slows down a bit because a small white candle appears. However, the next candle has a long black body, which confirms the strength of the bear. In general, most of us would intuitively say that we are facing a bearish continuation pattern. The Last Engulfing Bottom is a good example to explain that the occurrence of a pattern is not equivalent to the price prediction. In the case of the Last Engulfing Bottom pattern, its name gives us a clue that illustrates how it can work. The pattern must be preceded by a bearish engulfing pattern. So we can expect the downtrend to reverse if a price is confirmed on the next candles. If a last engulfing bottom appears alone, that is, it is not preceded by a bearish engulfing pattern, a downtrend is likely to continue. It can be especially true if the next candle closes below the occurrence of the pattern. Prediction of the reversal of the trend requires confirmation, that is, the next candle will close above the pattern. If the volume data is relevant to the analyzed market, it should be taken into account. If it raises for candles with white bodies, the probability of reversing a downtrend increases. Building: First candle • Or a candle in a downtrend • Or white body Second candle • O black body • Or the body of the candle wraps around the body of the previous candle Example: BAC, 25 Apr, 2011. Chart 1d. 33- Bullish Meeting Lines Description: The bullish meeting lines are a two-line bullish reversal pattern. The first line is a black candle that appears as a long line. The second candle also appears as a long line, but the body of the candle is white. Both candles close at the same level. Although the shape of the pattern is simple, it appears very rarely in charts. The pattern should be confirmed on subsequent candles. Visually, the pattern of bullish meeting lines is similar to that of the neck, being a bearish continuation pattern. However, the main difference is in the length of the body of the second line. In the case of the In Neck pattern, the body of the second candle is shorter. Building: First candle • Or a candle in a downtrend • O black body • Or appears as a long line Second candle • Or white body • Or the closing price is equal to the previous closing price Example: T , 28 Jul, 2011. Chart 1d. 34- Last Engulfing Top Description: The description of the latest engulfing top is precisely the same as the bullish engulfing pattern except for the trend requirement. The Bullish Engulfing appears within a downtrend, while the Last Engulfing Top occurs within an uptrend. You may wonder why this pattern can reverse an uptrend. After all, it is not difficult to find short black candles that appear within an uptrend. It is not an unusual situation because, during an uptrend, the price often stops before going higher. However, when the latest engulfing top appears, it should not be ignored, especially when preceded by a bullish engulfing pattern. The ideal setting is where we deal with both patterns on the chart; first having a bullish envelope (the price rises), and after a while a last engulfing ceiling. As the name implies, the last engulfing top symbolizes the end of an uptrend. When such a pattern emerges, one should wait for what happens on the next candles. If a black candle appears and closes significantly lower, then we can expect the reversal of the trend. However, if we are faced with a candle that closes much higher, the uptrend is likely to continue. Building: First candle • Or a candle in an uptrend • O black body Second candle • Or white body • Or the body of the candle wraps around the body of the previous candle Example: MSFT , 20 Sep, 2012. Chart 1d. 35- Two Black Gapping Candles Description: The Two Black Gapping Candles is a bearish continuation pattern. The first and second lines of the pattern can be any candle with a black body, except doji candles. In other words, the following candles can appear within the pattern: Short Black Candle, Black Candle, Long Black Candle, Black Top, Black Marubozu, Opening Black Marubozu, Closing Black Marubozu. If a Black Spinning Top candle appears within the pattern, none of its shadow lengths can exceed more than twice the length of the body (for that reason, the High Have candle cannot appear within the pattern). Doji candles cannot appear within the pattern. The opening price of the candle of the first pattern should be a gap lower than the previous candle. The Two Black Gapping Candles pattern appears in a downtrend and predicts its continuation. As with any other pattern, this one should also be confirmed on the following candles. Your second line can become the first line of some bullish reversal pattern, for example a bullish Harami or a Carrier Pigeon. For that reason, to consider the pattern as confirmed, the next candle must be black with the closing price below the close of the previous candle. In markets where volume data is relevant, trading volume should increase on the candle following the pattern. Building: First candle • Or a candle in a downtrend • O black body • Or opening price gaps lower than the previous candle Second candle • O black body • Or the open below the open of the previous candle but higher than its low • Or the close below the close of the previous candle Example: WMT , 01 Apr, 2002. Chart 1d. 36-Two-Candle Shooting Star Description: The first line of the pattern is a candle with a white body that appears as a long line. It can be one of the following candles: White Candle, Long White Candle, White Marubozu, Opening White Marubozu, Closing White Marubozu. Candles that are spinning tops, even with white bodies, cannot appear on the first line. The second candle can be a white or black top that appears as a long or short line. It can be one of the following candles: white top, black top, high wave. The lower shadow does not exist or is shorter than the body. The upper shadow must be at least 2.5 times longer than the body. The pattern appears in an uptrend, predicting its reversal. It should be confirmed in the form of a breakout of a closer support zone or a trend line. The two-candle shooting star can be part of the evening star, being a three-line pattern. In such a case, reinforce the two-candle shooting star forecast. First candle • Or a candle in an uptrend • Or white body Second candle • Or a white or black small-bodied candle • Either there is no lower shadow or the shadow cannot be longer than the body • Or upper shadow at least 2.5 times longer than the body • Either the opening above or at the level of the close of the previous candle I did not find an example for this Pattern .. Sorry. Remember that it is not necessary to learn all patterns by heart. Just master the theory of hollow candles and you can use these patterns only when necessary. Thank you very much for the support.
Editors' picks
COINBASE:BTCUSDEducation
by UnknownUnicorn18500526
57
NIO: This is the key point for it!Hello traders and investors! Let’s see how NIO is doing today! First, NIO defeated the purple trendline , breaking the bear trend seen in the 1h chart. But there is no bull trend yet , as we have no higher highs/lows. But we have a pivot point at $ 34.15, and if defeated, this will be the beginning of a new bull trend in the 1h chart, which could spread to the daily chart as well. Speaking of daily chart: Yep, NIO quickly retested the $ 32 area, and it went to the $ 30.71, but it was a false breakout from our green line. Friday, it did a Harami above a support level. Usually, Haramis have random chances of working as reversal patterns, but the odds increase when we are near important support levels. NIO must not lose this green line again, otherwise, it’ll seek lower levels, like the $ 25. If it triggers the pivot mentioned in the 1h chart, it can easily seek the $ 43 again. Let’s see how NIO will play next. If you liked this analysis, remember to follow me to keep in touch with our studies, and support this idea if it helped you! Thank you very much, have a good week!
NYSE:NIO
by Nathan_The_Finance_Hydra
8
NZDJPY - Failure Shark PatternThis looks like a regular shark pattern and it is a valid bearish shark pattern, but I'm seeing this harmonic patterns has a 90% chance of failure, meaning to say it is most likely to have a bull run than a bear run. I've been trading harmonic patterns for 10years and on my personal observation when certain setup matches others, it will give a sign of the pattern succeed or fail. While lots of traders love to show what happen when they hit profit, I love to share my thought process before the trade happen.
Short
by RaynLim
4
Bi-Monthly chart on BTC looks awful.There are a lot of people that have been looking at our price action on the weekly and suggesting we are in a mere consolidation pattern. Or they look at the monthly chart and again state we are in a consolidation pattern. To split the difference I am looking at the 15 day chart to fairly split the difference between the two as it is the closed to both doubling a 7 day week and halfing a 30.5 day month. The candle closes in about 7 hours and I don't think there are many that think that this will materially improve. Analysis Using the bollinger band on something like BTCUSD, which has a habit of going parabolic will stop you from getting a lot of gains if you expect it to just tap out at resistance. We do also see that it is a bit more helpful as support and there are some great entries when the price action weeks out the bollinger band. The candle patterns boxed out are what we would expect to see from a trend reversal. The bulls have been hoping to see a blow off top and the irrational exuberance but that has not happened, in part because the bulls have entered their position hoping dumb money will take them higher. Then the bulls were going to dump on the fools. But it does appear that smart money has been distribution on the bulls rather than fools taking price to 100k. And how to confirm these wild and baseless allegations? Confirmation in the price action and momentum indicators. The main chart has spelled that out well enough and when the candle closes we can expect to see even more bearishness. Closing thoughts We can clearly expect a 80% or more pull back from here and if you look at the red retrace we could even see price action below our previous ATH of $20k. If the purple retrace is similar to the red retrace we could expect a target of $10-13k-ish and then a very long absorption period. Another thing to consider is that after both the red and blue retraces price action came out of the 15 day bollinger band twice before pumping to all time high. If you want to minimize your downside risk and time under trade you take that second drop out of the bollinger band. I expect to see this drop to be faster but still roughly symmetrical compared to the run up due to the overall negativity in the markets with stagflation and all that Fed Created mess. I am going to assume that every formation, be it a symmetrical triangle or wedge will break bearishly'
BITSTAMP:BTCUSDShort
by This_Guhy
7
Patterns Candlestick, Guide Part 4.Guide Candles Patterns Candlestick patterns are usually quite good when trying to finish an analysis as it can help you confirm a trend. Basic Candles 11- Long White Candle Description: When analyzing the situation on the chart, it is always more important to observe what is happening at that moment. Therefore, in order to determine whether the candle appeared as a long or a short line, the last appointments are crucial. If market volatility is low for a long time, even a small breakout may be enough to form a long white candle. However, in the same chart below, when market volatility is much higher, a candle has to be appropriately larger to recognize it as a valid long white candle. Many analysts make a mistake when determining whether the candle is a long or a short line, position on historical charts. They forget that by the time a candle is forming, it is not clear what the market will look like in the future. In other words, if we have a candle on the chart today that meets the requirement of a valid long line, it does not mean that the same requirement will be met in the future. What appears to be extremely long today may not be at a later time, when market volatility will grow rapidly. Some authors (eg Bulkowski) classify Long White Candle as a continuation (bullish) pattern. Let us think for a moment whether this should be regarded as a correct interpretation. First, the candle should appear only in an uptrend; otherwise, we could not call this pattern a bullish continuation. But this is not true, as we can find this candle in an uptrend or a downtrend. Second, Long White Candle is not a pattern in itself, it is a basic candle and can be part of both bullish and bearish patterns. Some people choose to think of this candle as bullish, but in fact it may appear as part of, for example, bearish engulfing patterns or dark clouds. Third, if this candle is formed with a low trading volume, it is recommended to be very suspicious as far as its bullish meaning is respected. According to Nison, the appearance of a long white candle body (that is, no shadows) after a series of dips, may indicate a change in the current trend. Especially if the closing price is higher than the close of several previous candles. Nison also adds that when the long white candle appears during an uptrend and breaks some major recent resistance level, there is a good indication of the continuation of the trend. The higher the volume when the Long White Candle is forming, the louder the signal will be. Long white candles, accompanied by a large volume of trades, should also be considered as a support zone. The support level appears within the average and low price of that candle. Others are treating the entire Long White Candle as a support zone. Building: • White paste • Upper and lower shade required • None of the shadows can be bigger than the body • The body of the candle is three times higher than the average body of the last 5 or 10 candles. • Appears as a long row Example: NASDAQ,05 Mar, 2021. Long White Candle. Chart 1d. 12- White Marubozu Description: Marubozu in Japanese means "bald head" or "shaved head". This is because said candle does not have at least one shadow, which implies that the opening or closing price will be equal to one of the maximum prices of the candle. A Marubozu, which does not have both shadows, indicates that the market opened and closed at the extreme levels of that candle. The white Marubozu that appears as a long line, like the Long White Candle, has substantial meaning. It indicates the strength of the market, especially if it is forming with high trading volumes. Depending on how it appears on the chart, it can be thought of as a continuation or reversal candle. White Marubozu that appears in an uptrend may suggest its continuation, especially if it appears after a price gap (Shimizu). As with many other basic candles, White Marubozu can appear within patterns, both bullish and bearish. In a downtrend, White Marubozu can be part of a bullish reversal pattern, for example in Bullish Engulfing. While occurring during an uptrend, it can form a bearish reversal pattern, for example, the Bearish Tasuki Line. Building: • White body • Lack of shadows • Appears as a short or long line Example: ALCOA INC,31 Jan, 2011. White Marubozu. Chart 1d. 13- Closing White Marubozu Description: Closing White Marubozu is a candle belonging to the marubozu group. Depending on its appearance on the chart and how the lower shadow looks, you can predict the continuation of a trend or indicate its reversal. The sail is notable for the absence of the upper shadow, but it must have a body that covers at least 51 percent of the overall height of the sail. If a closing white Marubozu candle appears in an uptrend, it is a much stronger trend continuation signal than the opening white Marubozu candle. This is because the high price and the closing price are the same (no upper shadow), which means that the market has remained strong until the end of the session (if we consider the daily charts). Building: • White paste • No upper shadow • Lower shadow smaller than the body • Appears as a short or long line Example: ALCOA INC,15 Jan, 2012. Closing White Marubozu. Chart 1d. 15- Long-Legged Doji Description: The literature contains many descriptions of doji candles that provide examples of schematic thinking. It is widely accepted that doji candles are neutral. However, it is an extremely important type of candle that must be interpreted differently for different types of situations. An example is a basic long-legged Doji candle. The appearance of this type of doji on a chart can be a sign of a reversal, especially if it occurs after a long white candle. Seiki Shimizu writes that traders often take positions in the direction designated by the candle opening after the long-legged Doji (i.e. if the open is lower, take a short position and vice versa). This is very aggressive behavior; It is important to recognize that when the market returns to trend after the doji, it is seen as a sign of defeating momentary weakness. It is worth remembering how the creation of this candle arises. The opening and closing prices are the same, but during the day (if we use daily candles) we are dealing with extremely rapid growth and decline. Such situations indicate considerable concern among traders. In many cases, these rapid movements take place in a few minutes. It can represent a momentary euphoria causing sharp rises and then a sudden market leak or vice versa. Therefore, the next candle is of great importance for the interpretation of subsequent events. Building: • A doji candle • The opening and closing prices are the same or similar • The upper and lower shadows are very long • The body is located in the middle of the candle or almost in the middle range • Appears as a long line Example: Intel INC,18 April, 2002. Long-Legged Doji. Chart 1d. 15- White Spinning Top Description: The tops are candles with very small bodies. They are different in nature compared to long candles, which show the strength of the trend. In this case we are facing indecision. The importance of a spinning top depends largely on the current situation on the chart. If one or more spinning tops occur in a stable market, it doesn't mean anything in terms of predicting how prices will evolve. However, when the market is growing rapidly and there is this type of candle - long shadow (s) and a small body - this means that, despite the large fluctuations during the session, the market does not have the strength to continue the current trend. Confirmation of this weakness can be the appearance of black candles after the top. When the top appears following a clear trend (downtrend or uptrend) its importance is greater, if at the same time we notice a rapid increase in volume - this situation should be considered as a potential sign of the trend change. In the case of a spinning top, the color of the body, in principle, does not matter, so the interpretation of Black Spinning Top and White Spinning Top is identical. Building: • White paste • At least one shade is required • At least one shadow must be longer than the body • Appears as a long and a short line • If it appears as a long line, none of the shadows can exceed three times the body (otherwise we would have the basic High Wave candle) Example: PFE INC,06 April, 2010. White Spinning Top. Chart 1d. 16- Dragonfly Doji Description: Dragonfly Doji is a basic candle shaped like a Hanging Man pattern (in an uptrend) or Takuri Line (in a downtrend). Due to the identical opening and closing prices, it is classified as a doji candle. The Japanese name means not only "dragonfly" but also bamboo helicopter or bamboo dragonfly (jap. Taketombo), which is a toy helicopter rotor that flies upward when its shaft rotates rapidly. Shimizu points out that the market after the appearance of the Dragonfly Doji can behave as unpredictably as the toy: both go up and down. Morris, on the other hand, draws attention to the fact that such a candle can announce a reversal after a long downtrend, especially when the lower shadow is very long, then we have the pattern called the Takuri Line. A little difference between opening and closing is accepted. Building: • The opening, closing and maximum prices are the same or very similar • Long lower shadow • Appears as a long line Or Example: Intel,14 Sep, 2006. Dragonfly Doji. Chart 1d. 17- Opening Black Marubozu Description: The Opening Black Marubozu candle has no upper shadow and its high price is equal to the opening price. According to Shimizu, Opening Black Marubozu is a bearish candle, either reversal or continuation. In a clear downtrend, the appearance of such a candle preceded by a price gap can predict the acceleration of declines. Another important factor is the length of the lower shadow (note that the shadow cannot be longer than the body of the candle). The shorter the shadow, the more negative the candle's meaning. The Black Marubozu opening can also occur within bullish patterns, both continuation and reversal. This candle is very similar to the Bearish Belt Hold pattern, but at the Black Marubozu open the lower shadow can be longer. Building: • Black body • No upper shadow • Lower shadow smaller than the body • Appears as a long or short line Example: Intel,07 Aug, 2007. Opening Black Marubozu. Chart 1d. 18- Doji Description: This candle doesn't really have any trend meaning for the most part. It is usually only a continuation of the current one. Building: • A doji candle • Appears as a long or short line Example: Intel,18 Aug, 2006. Doji. Chart 1d. 19- Four-Price Doji Description: The Four Price Doji is a basic candle that has all four of the same prices (i.e. Open, Close, Low and High). Usually this means that we are dealing with a very small number of transactions, and in many cases a single transaction. Therefore, its importance is very limited. Note that we can assume, as for all other types of doji candles, that a very small body is acceptable. In the case of the four price Doji, this means that the open, close, high and low prices are not necessarily all the same, but are very similar. The Four Price Doji often appears in pre-market and after-hours trading. Also, when the candles are low frequency (for example 1 minute candles), the chances of such candles being seen are higher. When such candles occur on a daily chart, it means that the trading volume is likely to be extremely low. Building: • A doji candle • All prices are the same • Lack of shadows • Appears as a short line Example: NRG Energy INC,31 Mar, 2009. Four Doji. Chart 1d. 20- Opening White Marubozu Description: Opening white Marubozu is similar to a long white candle and should be treated similarly, that is, depending on the context, as a reversal or continuation candle. Distinguished by the absence of the lower shadow, the body must be at least 51 percent of the overall height of the sail. The length of the upper shadow and the context in which the candle is forming on the chart (see the bullish belt hold pattern) may be relevant to your interpretation. The appearance of this basic candle in an uptrend can suggest a continuation of the uptrend, but it can also be part of the bearish reversal pattern (for example, Dark Cloud Cover). In the downtrend, the opening white Marubozu may be part of the bullish reversal pattern. The White Marubozu basic opening candle is considered a bullish belt hold pattern, but then a downtrend is required before it occurs, and the upper shadow should not be too long. Building: • White body • No lower shadow • Upper shadow smaller than the body • Appears as a long or short line Example: NRG Energy INC,30 Jul, 2009. Opening White Marubozu. Chart 1d. Just relax. If you do not master everything it is normal, to be realistic I have not learned all this in its entirety, but with a script and simply knowing how to interpret them you can use them whenever you want. You don't need to know them by heart. With this we finish the Basic Candles. We will continue with One Line Patterns tomorrow.
COINBASE:BTCUSDEducation
by UnknownUnicorn18500526
6
Candle Patterns. Graphic Guide Part 3Guide Candles Patterns Candlestick patterns are usually quite good when trying to finish an analysis as it can help you confirm a trend. Basic Candles 1- Black Candle Description: The black candle often appears on the candlestick charts. In a downtrend, it should be primarily treated as a signal of the strength of a trend that we can expect to continue. Such a candle can also be part of a bullish reversal pattern (for example, Latest Engulfing Bottom, Piercing, Bullish Harami). The Black Candle can also appear during an uptrend and then it is important to analyze the broader context of the market. First of all, as with White Candles, attention must be paid to the liquidity of the market. With low liquidity, the series of black candles in an uptrend can indicate that market participants use the last phase of the trading session to consistently sell assets, which in turn can cause a major collapse. This, however, is an extreme situation in markets with low liquidity. More often, the Black Candle in an uptrend can be part of a bearish reversal pattern. Building: • Black body • Upper and lower shadows are required • None of the shadows can be longer than the body • Appears as a long line Example: LTC,21 Dec, 2020. Black Candle. Chart 1d. 2- Gravestone Doji Description: The basic Gravestone Doji candle is similar to that of a tombstone. Its appearance in a downtrend may suggest its continuation or a move towards a sideways trend. All the main authors emphasize the importance of the candle after the uptrend. Tohbo (or tohba) is a wooden symbol of a Buddhist stupa placed behind a tombstone. It also includes the tombstones of those brave men who fought in the war. According to Shimizu, the appearance of a Doji tombstone at the top indicates the announcement of the end of the uptrend. In some cases, the basic Gravestone Doji candle may resemble the One-Candle Shooting Star pattern when a small doji body is allowed (for example, 1-3% of the candle). Building: • The opening, closing and minimum prices are the same or very similar • Long top shadow • Appears as a long line • Maximum 3% of the body of the candle. Example: Nasdaq,27 Feb, 2019. Gravestone Doji. Chart 1d. 3- Long White Candle Description: When analyzing the situation on the chart, it is always more important to observe what is happening at that moment. Therefore, in order to determine whether the candle appeared as a long or a short line, the last appointments are crucial. If market volatility is low for a long time, even a small breakout may be enough to form a long white candle. However, in the same chart below, when market volatility is much higher, a candle has to be appropriately larger to recognize it as a valid long white candle Many analysts make a mistake when determining whether the candle is a long or a short line, position on historical charts. They forget that by the time a candle is forming, it is not clear what the market will look like in the future. In other words, if we have a candle on the chart today that meets the requirement of a valid long line, it does not mean that the same requirement will be met in the future. What appears to be extremely long today may not be at a later time, when market volatility will grow rapidly. Some authors (eg Bulkowski) classify Long White Candle as a continuation (bullish) pattern. Let us think for a moment whether this should be regarded as a correct interpretation. First, the candle should appear only in an uptrend; otherwise, we could not call this pattern a bullish continuation. But this is not true, as we can find this candle in an uptrend or a downtrend. Second, Long White Candle is not a pattern in itself, it is a basic candle and can be part of both bullish and bearish patterns. Some people choose to think of this candle as bullish, but in fact it may appear as part of, for example, bearish engulfing patterns or dark clouds. Third, if this candle is formed with a low trading volume, it is recommended to be very suspicious as far as its bullish meaning is respected. According to Nison, the appearance of a long white candle body (that is, no shadows) after a series of dips, may indicate a change in the current trend. Especially if the closing price is higher than the close of several previous candles. Nison also adds that when the long white candle appears during an uptrend and breaks some major recent resistance level, there is a good indication of the continuation of the trend. The higher the volume when the Long White Candle is forming, the louder the signal will be. Long white candles, accompanied by a large volume of trades, should also be considered as a support zone. The support level appears within the average and low price of that candle. Others are treating the entire Long White Candle as a support zone. Building: • White paste • Upper and lower shade required • None of the shadows can be bigger than the body • The body of the candle is three times higher than the average body of the last 5 or 10 candles. • Appears as a long row Example: Nasdaq,26 Mar, 2021. Long White Candle. Chart 1d. 4- Short Black Candle Description: The short black candle, as it is a basic candle, can be part of bullish and bearish patterns, both reversal and continuation. As highlighted in other articles, it is important to consider the market context in which the Short Black Candle appears. Building: • Black body • Requires upper and lower shadow • None of the shadows can be bigger than the body • Appears as a short line Example: Nasdaq,17 Jul, 2019. Short Black Candle. Chart 1d. 5- High Wave Description: The High Wave is a special type of basic spinning top candle with one or two very long shadows. The opening and closing price are not the same, but slightly different from each other. In this case, the body color does not matter. The high wave is similar to the long-legged Doji. Like many other candles with very long shadows, High Wave indicates that market fluctuations are very fast, which can pose a threat to the current trend. The importance of the candle, as in so many cases, depends a lot on the market context. Nison in the first edition of his book writes that high waves are sails whose two shadows, lower and upper, are long. However, in the next edition, he considers that it is enough that only one of the shadows is very long. As in the case of the spinning top, the importance of a high wave depends on what is happening on the chart. Morris notes that it may indicate a change in trend. Its importance will be stronger when it occurs after an explicit trend (downtrend or uptrend) and will be accompanied by higher volume. Several consecutive high wave candles are known as a high wave pattern. It seems that any accumulation of candles indicating significant market volatility (i.e. very long shadows) after a strong trend (especially an uptrend) will indicate the possibility of a reversal. Building: • A white or black body • Very small body • At least one shade is required • Appears as a long line • The length of at least one shadow is at least 3 times greater than the body Example: Nasdaq,16 Dec, 2013. High Wave. Chart 1d. 6- Short White Candle Description: The Short White Candle belongs to the group of basic candles. Very often it can be seen on the charts, although not as often as a normal White Candle. As highlighted in other articles, during the analysis it is very important to consider the market context. Short candles that occur after a strong trend made up of long candles can indicate only a temporary correction, especially if there are some of them in series (alternating black and white). The short white candle can also be part of the candlestick patterns, indicating a change in trend (e.g. latest engulfing bottom, morning star, descending hawk). Its appearance in an uptrend can suggest a continuation of the trend, but it can also be part of a pattern that heralds its reversal. When this type of candle occurs in a downtrend, it can be part of the bullish reversal pattern. Building: • White body • Requires upper and lower shadow • None of the shadows can be bigger than the body • looks like a short line Example: Nasdaq,20 Dec, 2013. Short White Candle. Chart 1d. 7- Black Spinning Top Description: The interpretation of this candle is the same as that of the White Spinning Top Building: • Black body • At least one shade is required • The body cannot be bigger than any of the shadows • Appears as a short line • If none of the shadows exceed three times the body, it is allowed to appear as a long line Example: Nasdaq,10 Jan, 2014. Black Spinning Top. Chart 1d. 8- Long Black Candle Description: A long black candle is often thought of as a continuation pattern. However, its correct valuation should depend on the particular market situation. When a long black candle occurs in a downtrend, it hints at a continuation of the trend, but it can also be part of a reversal pattern. Its occurrence in an uptrend can be a precursor to the trend reversal, especially if its close is lower than the closing prices of previous candles. Aside from a single occurrence after the price rises, the long black candle can also be part of other reversal patterns (i.e. all patterns that contain the white candle). As with the long white candle, this candle can form a significant resistance area (especially when trading volume is also increasing on that candle). The resistance level appears within the medium and high price of that candle. Others treat it as a hardiness zone for the entire Long Black Candle. When a long black candle breaks some previous support region, it should be considered as a significant fact indicating the strength of the downtrend and its continuation. Building: • Black body • Upper and lower shade required • None of the shadows can be bigger than the body • The body of the candle three times higher than the average body of the last 5 or 10 candles • Appears as a long line Example: Nasdaq,2 Jan, 2014. Long Black Candle. Chart 1d. 9- White Candle Description: White Candle is very important when it comes to showing the direction of the trend and its strength. Many white candles, one after another in an uptrend, confirm the importance of this trend and represent its continuation. White Candle can also be part of another pattern, including bearish reversal patterns (eg Bearish Harami, Bearish Harami Cross, Dark Cloud Cover). A single appearance of the White Candle in a downtrend indicates its weakness and heralds a possible problem with its continuation. It can also be part of bullish reversal patterns (eg Bullish Engulfing, Piercing, Morning Doji Star). Building: • White body • Upper and lower shadows are required • None of the shadows can be longer than the body • Appears as a long line Example: Nasdaq,04 Dec, 2013. White Candle. Chart 1d. 10- White Candle Description: Close Black Marubozu is a candle where the closing price and the low price are at the same level (there is no lower shadow). She must have a body that covers at least 51 percent of the overall height of the sail. According to Morris, Closing Black Marubozu and Closing White Marubozu are more powerful than Opening Black Marubozu and Opening White Marubozu. Close Black Marubozu indicates the strength of the bears because the closing price and the low price are at the same level. Depending on the position in which such a candle is formed, it can be a reversal or continuation candle. When the Black Marubozu close occurs in a downtrend, along with other black candles, that candle confirms the power of the trend. The appearance of the Black Marubozu close in an uptrend can be a sign of a trend reversal. Building: • Black body • No upper shadow • Upper shadow smaller than the body • Appears as a short or long line Example: Nasdaq,06 May, 2014. Closing Black Marubozu. Chart 1d. 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