[vaishakh]

Axis-IT matched 'Three Outside Up Bullish' high priority Bullish Reversl candlestic pattrn on 22nd of July.

Pattern:
a) After an established downtrend, day-one continues the trend with a red candle
b) 2nd day is a long green day that engulfs the body of the first day, closing well above the previous days open.
c) The 3rd day is a green day with an even higher close than the second day.



Src: CandleStick Patterns

When the stock is positive trend, y is it called Bullish Reversal?

[TimRacette]

Another method not too commonly used are Heikin Ashi candlesticks on tick charts to help better identify the trend changes.

[ospogrp]

Originally Posted by brownsfan019 »

In an effort to educate and stimulate some discussion, I'm going to try to put together a few steps for candlestick trading success!

Step 1: Identify the candlestick 'patterns' or 'formations'

There are a variety of websites and books out there talking about candlestick patterns or formations.

Some sites out there with some free stuff that can at least get you started in pattern recognition. Stockcharts.com in particular has a nice section on candlesticks (click hyperlinks):

Main Page
Intro To Candlesticks
List of Common Patterns

That's a few free links from stockcharts.com. Those are pretty good for being free. Keep in mind that is not meant to be a substitute for books, videos and live seminars. As mentioned previously, I like the work of Steve Nison.

So the very, very first step is to be able to look at a candle(s) and identify if there's a potential candle pattern or formation there. That's step 1. I know that seems easy, but it can take some practice, esp in real-time and esp in day-trading. I would suggest looking at some DAILY charts and just start flipping through charts of stocks to see what you can recognize. Don't worry about stock charts if you just trade futures, you just want to train your eyes to see patterns and formations.

And speaking of day-trading, there is one important consideration when using candlestick analysis in a day-trading environment - YOU MUST REMAIN FLEXIBLE IN YOUR DEFINITIONS OF CANDLESTICKS IN REAL-TIME, DAY-TRADING. The lower the chart timeframe, the more flexible you must be. And what I mean is that if you are only looking for picture perfect hammers, you might be waiting a while for a signal. As we get more charts posted, this will make more sense.

And from candlestick recognition, there are a couple schools of thought of how trade them:

1) Trade any of the patterns if your parameters are met.
2) Trade certain patterns based on your preference and testing.

This is going to be an integral part of your trading plan and there's no right answer here. It really is dependent on how you build your trading plan and what your testing has shown. I'm not going to do the work for you, so don't bother asking.

There are a few sources that I would recommend. Steve Nisson has written a few books and did seminars in the Past If you want to Code Candle sticks to use candle sticks in your Trading System as an adjunct there was an article in the Stocks & Commodities November 1999.
The Coding can be been done. A trader that I am no longer in touch with was able to get the Procedure to work. I can't find the working Code however. O

[NYCkopp]

This was a great read and helped me understand these much better. Thanks!

[Mr_black]

Here is a Candlestick Type's