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Found 14 results

  1. This is a bearish reversal candlestick pattern which can be used to initiate a short position in the financial markets.
  2. This is a bearish reversal candlestick pattern which is not very reliable as a stand-alone signal. It must be combined with other methods of technical analysis to be successful.
  3. It is a highly reliable candlestick pattern which shows clearly that sellers have entered and taken over the market, thereby checkmating the prior trend.
  4. This is a potentially bullish reversal pattern which is rare in the market. It is not a very reliable signal and confirmation of an upward move must be sought before using this candlestick formation as a trade signal.
  5. This is a decidedly bearish pattern as the lower highs and lower lows indicate that sellers have succeeded in gradually pushing the market lower. The Day 2 and Day 3 candlesticks open at the midway point of the preceding Day 1 and Day 2 candlesticks respectively, and close below the preceding candlesticks, forming a pattern that has progressively lower highs and lower lows.
  6. The appearance of the stick sandwich alerts traders that a bullish reversal is about to occur. The stick sandwich is a medium reliability pattern and further confirmation is required before it can be used to trade a bullish reversal.The Day 1 candlestick is a black Marubozu, followed by a white candlestick with a higher open and higher close, and then a Day 3 black candlestick with a higher open than the Day 2 candlestick but the same close as the Day 1 Marubozu.
  7. A marubozo candle has no shadows. They are significant indicators that a big move in the direction of the candles colour is imminent.
  8. The long-legged Doji shows the amount of indecision in the market. They signify an equilibrium in the forces of demand and supply and can be a sign of a market reversal especially when they occur at the end of a sustained uptrend or downtrend.
  9. The kicker pattern is used to determine changes in the trend direction of an asset’s price as a reversal signal. The gap between the new trend candle and the kicker is a sign that there has been a sudden and sharp change in market sentiment, leading to the reversal.
  10. The pattern is considered to be bearish reversal pattern where the trader can trade the downside break of the neckline. In the patterns generated, the first and third peaks correspond to the shoulders while the second peak corresponds to the head.
  11. It signals a trend reversal which could either be bullish when there is a downtrend, or bearish when there is an uptrend.
  12. I want to share some candlestick patterns for some new traders who want to learn candlestick charting and i try to make it short and simple so that everyone understand and learn that. Unfortunately i could not attach pictures of formations with the text but they are attached with this post so check out there. Abandoned Baby: A rare Reversal Pattern characterized by a gap followed by a Doji, Which is then followed by another gap in the opposite direction. The Shadows on the Doji must completely gap below or above the shadows of the first and third day. Dark Cloud Cover: A bearish reversal pattern that continues the uptrend with a long white body. The next day opens at a new high then closes below the midpoint of the body of the first day. Doji: Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary, and the resulting candlestick looks like, either a cross, inverted cross, or plus sign. Doji Convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. Downside Tasuki Gap: A continuation pattern with a long, black body followed by another black body that has gapped below the first one. The third day is white and opens within the body of second day, then closes in the gap between the first two days, but does not close the gap. Dragonfly Doji: A Doji where the open and close price are at the high of the day. Like other Doji days, this one normally appears at market turning points. Engulfing Pattern: A reversal Pattern that can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing Pattern) or a downtrend (Bullish engulfing Pattern). The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body. Evening Doji Star: A three day Bearish reversal pattern similar to the Evening star. The uptrend continues with a large white body. the next day opens higher, trades in a small range, then closes at its open (DOJI). The next day Closes below the midpoint of the first day. Evening Star: A bearish continuation pattern that continues an uptrend with a long white body day followed by a gaped up small body day , then a down close with the close below the midpoint of the first day. Falling Three Methods: A bearish continuation pattern. A long black body is followed by three small body days, each fully contained within the range of the high and low of he first day. the fifth day closes at a new low. Gravestone Doji: A doji line that develops when the Doji is at, or very near, the low of the day. Hammer: Hammer candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with along stick. if this candlestick forms during an advance, then it is called a hanging man. Hanging Man: Hanging Man candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with a long stick. if this candlestick forms during a dicline,then it called a Hammer. Harami: A two day pattern that has a small body day completly contained within the range of previous body, and is the opposite color. Harami Cross: A two day pattern similar to the harami. the difference is that the last day is doji. Inverted hammer: A oneday bullish reversal pattern. In a downtrend, the open is lower, then it trades higher, but closes near its open, therefore looking like an inverted Lollipop. Long Day: A long day represents a large price move from open to close, where the length of the candle body is long. Long-Legged Doji: This candlestick has long upper and lower shadows with the Doji in the middle of the day;s trading range, clearly reflecting the indecision of traders. Long Shadows: Candlesticks with along upper shadow and a short lower shadow indicate the buyers dominated during the first part of the session bidding prices higher. conversely, candlesticks with long lower shadows and short upper shadows indicate the sellers dominated during the first part of the session. Marubozo: A candlestick with no shadow extending from the body at either the open, the close or at both. The name means close-croppes or close-cut in Japenese, though other interpretations refer to it as Bald or Shaven Head. Morning Doji Star: A three day bullish reversal pattern that is very similar to the morning star. the first day is in a downtrend with a long black body. The next day opens lower with a Doji that has a small trading range. the last day closes above the midpoint of the first day. Morning Star: A three day bullish reversal Pattern consisting of three candlesticks a long bodied black candle extending the current downtrend, a short middle candle that gapped down on the open, and a long-bodied white candle that gapped up on the open and closed above the midpoint of the body of the first day. Piercing Line: A bullish two day reversal pattern. The first day , in a downtrend, is a long black day. the next day opens at a new low, then closes above the midpoint of the body of the first day. Rising Three Methods: A bullish continuation pattern in which a long white body is followed by three small body days, each fully contained within the range of the high and low of the first day. the fifth day closes at a new high. Shooting Star: A single day pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. it looks just like the Inverted Hammer except that it is bearish. Short Day: A short day represents a small price move from open to close, where the length of the candle body is short. Spinning Top: Candlestick Lines that have small bodies with upper and lower shadows that exceed the length of the body. spinning tops signal indecision. Stars: A candlestick that gaps away from the previous candlestick is said to be in star position. depending on the previous candlestick, the star position candlestick gaps up or down and appears isolated from previous price action. Stick Sandwich: A bullish reversal pattern with two black bodies surrounding a white body. The Closing Prices of the two black bodies must be equal. A support prices is apparent and the opportunity for prices to reverse is quite good. Three Black Crows: A bearish reversal pattern consisting of three Consecutive long black bodies where each day closes at or near its low and opens within the body of the previous day. Three White Soldiers: A bullish reversal pattern consisting of three consecutive long white bodies. Each Should open within the previous body and the close should be near the high of the day. Upside Gap Two Crows: A three day bearish pattern that only happens in an uptrend. the first day is a long White body followed by a gapped open with the small black body remaining gapped above the first day. the third day is also a black day whose body is larger then the second day and engulfs it. The close of the last day is still above the first long white day.
  13. For all the different methods of technical analysis employed to place a trade and all the different forces within markets nowadays, do simple patterns still have a place in your repertoire of trades? Well, I would personally say that the answer to this question is a categorical yes with the one qualifier that the pattern must be a strong indication of the underlying auction and the inventories being added to or squared up. One such formation that I really like(given that I have done well from it in the past) but probably under utilise is the Flag Formation and in my next post, I'll discuss the ins and out of trading it.
  14. Japanese candlestick charts are the most visually rewarding charts to use when trading the forex market. The clear depiction of price action that they provide is second to none. Japanese candles provide a different aspect to charting in that they allow you to see the force with which either the bulls or bears won for a given period of time. There are numerous forex candle patterns that you can use when trading price action in the forex market. Candlestick patterns are preferable to standard bar charts because they allow you to apply all Western technical analysis techniques used with bar charts and also provide a variety of their own forex candle patterns, not to mention they are just much easier to look at. Candlestick charts are by far the most popular form of chart used today in the forex market. Using forex candle patterns to navigate the market is a great way to make sure you see all relevant reversal patterns as well as trend continuation patterns. The forex market is open 24 hours a day 6 days a week; this means there are many more price action setups to take advantage of than what other financial markets provide. Japanese candles work great in the forex market largely because there is almost always a trending market somewhere in the forex market. By using candlestick patterns in forex you can easily spot strongly trending markets and find great high probability setups into these trends. Forex candle patterns also allow you to spot market reversals at the earliest possible time. Forex candle patterns visually display the supply and demand situation for whatever currency pair you are looking at on any given time frame. This colorful visual representation of supply and demand makes price action analysis much easier and more relevant. By being able to quickly and clearly see the force with which the bears overcame the bulls or the force with which the bulls overcame the bears you will become a better price action analyst and the discretionary or “art” part of forex price action analysis will become much more accurate for you. This accuracy will spill over to your psychological mindset and make you a more calm and confident forex trader. Japanese candlestick patterns are just as relevant to the forex market today as they were to the rice traders in Japan who invented candlestick charts back in the 18th century. Traders have been using these charts for hundreds of years to help predict future price movement, just as the rice traders in the 18th century obviously did not have any lagging indicators, you do not need them either. Price action trading via a stripped down and raw price chart combined with forex candle patterns is all you need to become a successful forex trader. Candlestick patterns in forex combined with price action analysis is all you need to develop a simple yet highly effective and profitable forex trading plan that will allow you to maintain clarity and objectivity while trading forex. Nial Fuller is an expert on price action forex trading strategies, you can visit his website at Learn To Trade The Market
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