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Candlestickpattern

Bearish Reversal Candlesticks PatternsHanging man The hanging man is the bearish equivalent of a hammer (bullish pattern). It typically forms at the end of an uptrend with a tiny body and a long lower wick. The lower wick designates that there was a large sell-off, but bulls headed to take back control and drive the price up. Holding that in mind, after a lengthened uptrend, the sell-off may act as a warning that the bulls might soon be losing control of the market. Shooting star The shooting star is a comparable pattern as the inverted hammer (bullish pattern) but is formed at the end of an uptrend. The shooting star is composed of a candlestick with a long upper wick, little or no lower wick, and a small body, ideally near the low. It indicates that the market reached a high, but then sellers took control and drove the price back down. Three black crows The bearish equivalent of three white soldiers (bullish pattern). The three black crows are made of three sequential red candlesticks that open within the previous candle’s body, and close at a level below the previous candle’s low. Ideally, these candlesticks shouldn’t have long higher wicks, betokening continuous selling pressure pushing the price down. The dimension of the candles and the length of the wicks can be used to estimate the chances of continuation. Bearish harami The bearish harami is a long green candle followed by a small red candle with a body that’s completely contained within the body of the previous candle. The bearish harami can unfold over two or more days, marks at the end of a downtrend, and may symbolize that buying pressure is decreasing. Dark cloud cover The dark cloud cover pattern consists of a red candle that opens above the close of the previous green candle but then closes below the midpoint of that candle. It can often be co-occurred by high volume, indicating that momentum might be shifting from the upside to the downside. Traders might wait for a third red candle for confirmation of the pattern. Best regards EXCAVO
Education
by EXCAVO
10
Trend Continuation Candlesticks PatternsTrend Continuation Candlesticks Patterns There are countless candlestick patterns that traders can use to identify areas of interest on a chart. These can be used for day trading, swing trading, and even longer-term position trading. Rising three methods This pattern occurs in an uptrend, where three consecutive red candles with small bodies are attended by the continuation of the uptrend. Ideally, the red candles shouldn’t breach the area of the previous candlestick. The continuation is confirmed with a green candle with a large body, symbolizing that bulls are back in control of the trend’s direction. Falling three methods The inverse of rising three methods, indicating the continuation of a downtrend instead. It’s relevant to note that candlestick patterns aren’t fundamentally a buy or sell signal by themselves. They are rather a way to look at market structure and a potential indication of upcoming opportunities. My dear friends, the sooner this publication gets 300 likes, the earlier I will make the next education post about other candlesticks patterns. Best regards EXCAVO
Education
by EXCAVO
11
Bullish Candlestick's Patterns You Must Know 🗒 Just browsing through my analysis means a lot to me. ➡️ Please follow the analysis very carefully and every detail of the chart means a lot. And always entry depends on many reasons carefully studied Always enter into deals when there are more than 5 reasons combined ------------ Bullish Exhaustion Bar ➕A bullish exhaustion bar ---------- opens with a gap down. Then, it works its way up to close near its top In This case, the gap remains unfilled. In addition, high volume should occur with the exhaustion bar. What does it mean? Its name explains it all. It represents exhaustion and a failed lastditch attempt. After the bears are exhausted, the bulls will takeover and the market will rise. After the bulls are exhausted, the bears will take the market down. How do we trade it? 1. Buy above a bullish exhaustion bar ---------------------- ➕Bullish Pin Bar ----- It looks like the nose of Pinocchio. It has a long and obvious tail. For bullish pin bars, the lower tail take up most of the bar. For bearish pin bars, it is the upper tail that dominates. What does it mean? Paraphrasing Martin Pring, the pin bar lies like Pinocchio. With its long tail, a pin bar breaks a support or resistance momentarily to trick traders into entering the wrong direction. These traders are trapped, and there is always money to be made when you find trapped traders. ------------- ➕Bullish Reversal Bar --------- A bullish reversal bar ------ pattern goes below the low of the previousbar before closing higher. What does it mean? For the bullish pattern, the market found support below the low of the previous bar. Not only that, the support was strong enough topush the bar to close higher than the previous bar. This is the first sign of a possible bullish reversal. How do we trade it? 1. Buy above the bullish reversal bar in a uptrend --------------- ➕ Bullish Two-Bar Reversal ----------- The two-bar reversal pattern ------------- is made up of two strong bars closing in opposite direction. The bullish variant consists of a strong bearish bar followed by a bullish bar. Reverse the order to get its bearish counterpart. ------------- What does it mean? Every reversal pattern works on the same premise. A clear rejection of a down thrust is a bullish reversal, and a clear rejection of an up thrust is a bearish reversal. In this case, the first bar represents the first thrust, and the second bar represents its rejection. How do we trade it? 1. For bullish reversals, buy above the highest point of the twobar pattern -------- ➕ Key Reversal Bar ------- A key reversal bar --------- is a specific instance of a reversal bar that shows clearer signs of a reversal. A bullish key reversal bar opens below the low of the previous bar and closes above its high. By definition, key reversal bars open with a price gap. As price gaps within intraday time-frames are rare, most key reversal bars are found in the daily and above time frames. How do we trade it? ----------- 1. Buy above a bullish key reversal bar (If uncertain, wait for price to close above it before buying.) ----------- ➕Bullish 3 Bar's Reversal ------ In sequence, the three bars of the bullish pattern are: ----------- 1. A bearish bar 2. A bar has a lower high and lower low 3. A bullish bar with a higher low and closes above the high of the second bar What does it mean? -------------- A three-bar reversal pattern shows a turning point. Compared to the other reversal patterns, the three-bar reversal pattern is the most 10 Price Action Bar Patterns You Must Know conservative one as it extends over three bars, using the third bar to confirm that the market has changed its direction. How do we trade it? 1. Buy above the last bar of the bullish pattern
Education
by GentleGoldenEngine
66
📖 Japanese candlestick charts. Part 1We are beginning a new theme “Trading strategy’s most important technical analysis tools”. Today we are going to tell you about the most important things in trading, candlesticks! 📌Japanese candlestick charts were developed in the 17th-18th centuries by the Japanese rice traders. They were introduced to trading by Steve Nison in the 20th century. It's a simple, but very important tool for technical analysis, as these candlesticks contain different information about the market. I guess that everyone in this channel already knows how to read candlesticks, so we are going to talk about their usage. ⚡️First — its form, this shows market participants’ state and mood. It could show their doubts/balance (doji) or trend exhaustion (graph looks like a hammer or a falling star). There are only a few main models, and we are going to talk about them in the future. However, you can start learning about them yourself by saving the screenshot below. ⚡️Candlesticks show reversals and it is what we need in trading. By trading reversals you are catching the trend, it could be short or long. However, you will be able to understand when the trend is exhausting and you will be able to leave trade when there is a reversal. In addition to the presence of the reversal pattern itself, the preceding trend is important, you have to have at least 3 candles. If there isn’t a clear trend, then there is no trade. Additionally, we are looking at the candlesticks’ volumes and how trading continues after the last reversal pattern. We are entering position not on the reversal candlesticks, but on the following ones after the trade (or candlestick above/below fixation, depending on a situation)! Reversal setup is a needed factor, but it's not enough to enter a trade. 📌 And these are not all of the necessary conditions for implementation! You have to understand that you are getting rid of risky positions that not only will give you headache but could also result in losses. You should only trade in situations where you are confident in, the confidence is achieved by fulfilling very certain conditions, of which only few people in the market know about. Continued in part 2.
Education
by I.T.Analytics
24
Colored Directional Movement IndexWhat Is the Colored Directional Movement Index (CDMI)? The Directional Movement Index, or DMI, is an indicator developed by J. Welles Wilder that identifies the direction of the price movements and the trend strength. DMI is a collection of three separate indicators (ADX, +DI, -DI) combined into one ADX's purposes is to define whether or not there is a trend present and the other two indicators ( +DI and -DI ) serve the purpose of determining trend direction. By combining all three, a technical analyst has a way of determining and measuring a trend's strength as well as its direction What to look for : Trend Strength - Analyzing trend strength is the most basic use for the DMI. Crosses : When +DI is above -DI, there is more upward pressure than downward pressure in the price. If -DI is above +DI, then there is more downward pressure in the price DMI can provide quality information and even trading signals, but it is not an easy indicator to master and not easy to read within multiple lines Here comes Colored Directional Movement Index (CDMI) CDMI is still the same indicator but visualized on the top of the price chart with single line of coloured triangles. CDMI requires additional setting to be provided by user which are Strong Trend and Week Trend threshold levels. Wilder believed that a DMI reading above 25 indicated a strong trend, while a reading below 20 indicated a weak or non-existent trend. Hence the default values for strong trend is set to 25 and week trend set to 17 How to read CDMI , it is simply to read colours and shapes of the triangles Tringle Shapes indicates the direction of the move and are calculated by comparing the values of +DI and -DI triangle up shape when +DI is above -DI (+DI > -DI) triangle down shape when +DI is below -DI (+DI < -DI) Triangle Colours, there are four main colours: Strong Bullish : Green is printed when ADX value is bigger than the Strong Trend Threshold +DI is above -DI (ADX > StrongThesh and +DI > -DI) Strong Bearish : Red is printed when ADX value is bigger than the Strong Trend Threshold +DI is below -DI (ADX > StrongThesh and +DI < -DI) Weak Trend : Black is printed when ADX value is lower than the Strong Trend Threshold and bigger than Week Trend Threshold ( ADX > WeekThesh and ADX < StrongThesh) Even Weaker Trend : Yellow is printed when ADX value is lower than the Week Trend Threshold ( ADX < WeekThesh) Additionally, Intensity changes of colours (between light and dark) will allow you to follow how ADX value is changing comparing it to its previous values. If current value of ADX is bigger than the previous value of ADX a dark colour will be printed, otherwise when ADX value decrease a lighter colour will be printed Please check links below for different usages of CDMI Hope you enjoy this post and find it useful
Education
by dgtrd
Bharat Forge - Perfect Example of .618 Bullish Retracement .618 Fibonacci Retracement Most Popular Retracement Important retracement for a stock that is selling off after completing a good Rally. #BharatForge is a perfect example of .618 Bullish Retracement and its amazing to see how prices rallied after hitting .618 retracement Trade Consideration ( Refer Chart ) Point #1 : A good rally Point #2 : A sharp Sell-off Point #3 : Exhaustion Candle with huge volume at .618 Retracement Support ( First Clue from Pure Price Action ) Point #4 : Hammer/Key Reversal Candle with huge volume at .618 Retracement Support ( Second Clue from Pure Price Action ) Point #5 : Huge Volume at two important Reversal Candles ( Exhaustion followed by Reversal ) Assignment for Learners: Identify .618 Retracement on daily chart and post in the comment section If you have Any Questions, please feel free to ask in the comment section below Share for Wider Participation and more much educational posts
NSE:BHARATFORGEducation
by manuagarwal21
3
Forex Price Action AnalysisHere we have Really good Setup and price also holding Very well 1) we have very big Wick (shadow) Candle this is the alert time in any trade. 2) we have doji which is for reversal (not all the time) but Volume is good 3) we made bullish candle and bouncing from Support support is Solid. so when we find the good Support we are ready to buy the retest as always so here we are buying the retest with stop loss below Support so here we got really decent profit with very small stop loss. and good gain
Education
by akashinvestor
Bearish Engulfing Pattern | AUDUSDThe Bearish Engulfing pattern consists of two candles. First one is a small upward candle followed by large bearish candle. The bearish candle must absorbs completely the previous one formed during the uptrend. The bearish candle is not required to cover the shadows of bullish candle. Requirements for validity: 1. Market in uptrend; 2. Small bullish candle; 3. Second one is large and bearish that compleately cover the bullishcandle. Tips: These are standard trading rules. There are many more specifics about order placement that I will reveal in the next posts! 1. Do not trade by candlestick analysis only! 2. Always do combine at least two or more analysis! 3. For example: - trend analysis (always works); - support & resistance analysis; - Fibonacci. 4. Follow us for more tips and analysis! Recommendations: Confirmation in the form of a downward candle with a closing price lower than the previous one or a downward gap is recommended, to be sure that the trend is reversing!
Education
by ForexTrendline
6
INTERESTING BOOKS 2Remember to follow me, I’m a trader who uses the classic technical analysis (barely any indicator, just the candles and the volume). Like this idea if it helped. Thank you very much. * LIKE this idea and FOLLOW me, because: - Here, you will see clean charts; - Trades with clear risk management; - The best of Dow Theory, Price Action and Candlestick psychology; - Chart patterns with statistics. * * My name is Nathan, I'm a trader and portfolio manager and I'm here to LEARN. Leave your COMMENT and FOLLOW me to keep in touch. *
BITSTAMP:BTCUSDEducation
by Nathan_The_Finance_Hydra
7
An introduction to Bar or Candlestick patternsBar patterns consist of one, two or few bars. Their usefulness lies in the fact that they can trigger signals at a relatively early stage in the development of a new trend and usually offer good benchmarks for traders to place low-risk stops. Overall, when considering these patterns, one key factor in determining their significance is the size of the pattern. Note this please because it is very important. Among other characteristics, this helps one to distinguish a high probability from low probability pattern. But size is measured relative to the preceding bars. These patterns are quite impressive to study because although they act short-term in influencing or moving price, they are quite reliable in their ability to signal short-term trend reversals. Even when a trend is long-term, they can develop at the final points in the trend just when it wants to reverse. One fact you should note is that not all of these patterns are created equal. By evaluating the criteria for the validity of these patterns, you should be able to distinguish between high probability signals from low probability ones. Only take high probability valid signals when you see them on a chart. General principles of bar pattern interpretation: Some of the general principles for interpreting these patterns are outlined below: 1. For these formations to be effective there must be something for them to reverse. That means top reversals should be preceded by a meaningful rally, and bottom formations should be preceded by a sharp selloff. As a general rule, the stronger the preceding trend, the more powerful the effect of the bar price pattern. This chart, a EURGBP chart, shows an example. 2. The formations generally reflect an exhaustion point. In the case of an uptrend, such patterns develop when buyers have temporarily pushed prices up too far and need a rest. In the case of a downtrend, there is little if any supply because sellers have liquidated their positions. That is why these patterns are always associated with a reversal in the prevailing trend. In the EURGBP chart above, notice how the momentum of the sell-off has dropped significantly and each bar had low volatility before the pattern appeared. 3. Not all patterns are created equal. The presence of one of these patterns on a chart does not necessarily guarantee a quick, profitable price reversal. Some patterns show some of the characteristics in a very strong way while others in a mild way. Therefore, you need to apply common sense to their interpretation. Take only patterns that show a high probability which some have called 5-star patterns. The USDCHF chart below shows a bullish pin bar that failed because it was trading into a barrier, resistance, when it should be trading away from a barrier. 4. Occasionally, it is possible to observe some form of confirmation closely following or even during the development of these patterns. Some examples could be the pattern being a large pattern, the violation of a trendline, or its formation at a support and resistance zone. These increases the odds that the pattern is a valid signal as well as significant. Relationship to Japanese candlestick patterns: Although these patterns were discovered when bar charts were widely used and hence the name, you could use candlestick charts for their analysis since bar charts and candlesticks share the same data presentation which is the same open, high, low, and close (OHLC) of price within a specified time. They also share a relationship to traditional Japanese candlestick patterns that are widely used for centuries. Anyone familiar with Japanese candlestick patterns would readily see the similarities and be able to use these bar patterns quickly. If you want an overview of Japanese candlesticks patterns you can read the classic book by Steve Nison on the subject titled “Japanese candlestick charting techniques.” So, when you see bar in subsequent notes, you can replace it with candlestick. Note: Make sure these patterns form tops and bottoms, that is, swing highs and swing lows, before trading them.
Education
by Emekadavid
3
[Candlestick] Lesson 1: How to Read a Candlestick?What is a candlestick? A candlestick is a type of price chart used that displays the high, low, open, and closing prices of a security for a specific period. We usually denote bullish (upward price movement) with a green candle and bearish (downward price movement) with a red candle. Candlestick Formation Body : Formed by the opening and closing price of a candle. High Price : The highest price reached by that candle. Low Price : The lowest price reached by that candle. (For e.g. If we look at a H1 timeframe chart, the candle will show the highest and lowest price reached in that hour.) Open Price : The price at which the candle opened its price at. Close Price : The price at which the candle closed its price at. (May see a gap in price opening from previous candle. Not all candle are continuous) Upper wick/shadow : Shows the difference in price level of the high price and the body's high price. (Line above the body) Lower wick/shadow : Shows the difference in price level of the low price and the body's low price. (Line below the body) Not all candle need to have an upper wick or a lower wick. Why is it so? This is because the price did not have much rejection be it to the bearish or bullish side. I will further elaborate some candlestick patterns that require us to take note of its wick/shadow in the next tutorial post. Stay tune!!! Upcoming Lesson: Lesson 2: Candlestick pattern and its impact
Education
by YGForex
6
BASICS TECHNICAL ANALYSIS - TREND - SUPPORT - RESISTANCESimple explanation about trend, support and resistance. A trend can move in two directions. An uptrend defined by higher lows and higher highs, or a downtrend defined by lower highs and lower lows. Then there is the sideways phase . As the name suggests, there is no trend here. The trend line will be pulled upwards along the significant lows during an uptrend and pulled up the significant highs during the uptrend. Common mistakes with a candlestick chart (candles chart) which I could observe here: The lines are partially pulled along the candle bodies and that is FALSE. If there is a shadow, then the line is drawn on the shadow and not on the body!!! Resistance: When a price moves from the bottom to the top and pull back on the same point (price) over and over again. Support: When a short moves from the top to the bottom and pull back on the same point (price) over and over again.
COINBASE:BTCUSDEducation
by i-like-profit
Candlestick Definition History Candlestick charts are thought to have been developed in the 18th century by Munehisa Homma, a Japanese rice trader. They were introduced to the Western world by Steve Nison in his book, Japanese Candlestick Charting Techniques. They are often used today in stock analysis along with other analytical tools such as Fibonacci analysis. In Beyond Candlesticks, Nison says: However, based on my research, it is unlikely that Homma used candle charts. As will be seen later, when I discuss the evolution of the candle charts, it was more likely that candle charts were developed in the early part of the Meiji period in Japan (in the late 1800s). Description The area between the open and the close is called the real body, price excursions above and below the real body are shadows (also called wicks). Wicks illustrate the highest and lowest traded prices of an asset during the time interval represented. The body illustrates the opening and closing trades. the asset closed higher than it opened, the body is hollow or unfilled, with the opening price at the bottom of the body and the closing price at the top. If the asset closed lower than it opened, the body is solid or filled, with the opening price at the top and the closing price at the bottom. Thus, the color of the candle represents the price movement relative to the prior period's close and the "fill" (solid or hollow) of the candle represents the price direction of the period in isolation (solid for a higher open and lower close; hollow for a lower open and a higher close). A black (or red) candle represents a price action with a lower closing price than the prior candle's close. A white (or green) candle represents a higher closing price than the prior candle's close. In practice, any color can be assigned to rising or falling price candles. A candlestick need not have either a body or a wick. Generally, the longer the body of the candle, the more intense the trading. A hollow body signifies that the stock closed higher than its opening value. A filled body signifies the opposite. In trading, the trend of the candlestick chart is critical and often shown with colors. A candlestick pattern is a special occurrence of one or more candlesticks on a candlestick chart, which have predictive nature in technical analysis. Rather than using the open, high, low, and close values for a given time interval, candlesticks can also be constructed using the open, high, low, and close of a specified volume range (for example, 1,000; 100,000; 1 million shares per candlestick). In modern charting software, volume can be incorporated into candlestick charts by increasing or decreasing candlesticks width according to the relative volume for a given time period.
OANDA:XAUUSDEducation
by i-like-profit
2
How I Treat Candle Opens/Closes and Their SignificanceIn my view, there is nothing fundamentally important about a candle closing above or below a certain price. Yet, I still regularly use a candle close or open to describe a trading idea, and for good reason. To start with, most people clearly understand what I mean if I say something like 'If the weekly candle closes above 8100...' but the significance of a weekly candle close above 8100 has nothing or very little to do with the fact that a market traded above 8100 at 00:00 UTC on a Monday. The distinction I use for price action with regards to candle closes is nothing more than the inclination for a market to trade near a certain price range and not instantly get rejected. . In our example above, it is very different if price has been trading at 7600 on Sunday at 10 p.m. and proceeds to climb to 8100 by 00:00 a.m. on Monday, than if price has been trading at 7900-8100 for a whole weekend and closes above 8100. There is a lot of value in understanding how a candle opened or closed and to not assume all candles are created equally if their OHLC numbers are identical. This is why a trading strategy with multiple time frames is a must when using bars/candles to read price action. Wish I had more time to go over a couple of examples, but the concept is very simple and I hope all of you understand the gist of the idea behind it.
XEducation
by rolesnioc
Tutorial on Advanced Swing Trading Entry & Exit PointsSteps to Swing Trading: 1. Find a trend: uptrend in bull price action chart, or downtrend in bear price action chart. 2. Analyze the trend to find the best entry points on that trend. That means finding the HL higher low points in and bull market, and LH lower high points in a bear market. Look for HLs in a bull market, and LHs for a bear market. 3. Confirm the best entry points in the trend with supporting candlestick patterns. Find a good bullish candlestick pattern on the HLs of a bullish market, and good bearish candlestick patterns for LHs of a bear market. These include pin bar patterns, engulfing candlestick patterns, inside bar candlestick patterns. They confirm a reversal As a general rule of thumb, entry points above 30 Day and 50 Day EMA lines provide more confirmation of the direction of the trend. To be most successful, remember to never go short in the bullish/uptrend market, and never go long in a bearish/downtrend market. This manages risk. Uptrends: Wait until an uptrend is confirmed before investing: uptrends are confirmed by two higher highs, with two higher lows on the chart. To elaborate, that means if we have two back-to-back HHs and HLs, that indicates the uptrend is confirmed and it's time to look for strong bullish candle or bullish reversal candlestick patterns at the third HL. Downtrends: To confirm downtrends, wait until two lower highs and two lower lows have formed in the price action chart. If you find two recurrenct LHs and LLs in a chart, then this price action setup marks that a new downtrend has been confirmed and the bear has begun. Start selling/short trading from LH 3 IF you find a strong bearish candle pattern or a strong bearish reversal candlestick pattern at the lower high level 3. Conclusion: This is the main process for swing trading strategy. Practice this process on historical charts to improve your understanding and mastery of the strategy, then manage your risk investing.
BITSTAMP:BTCUSDEducation
by Grandmaster76