Tug of War Among Central BanksThere is a tug of war situation among the central banks to hike interest rates. What is the bad and the good that will come out from this?
i. Last week of October, European Central Bank officials announced another massive 75 basis point hike, increasing interest rates at the fastest pace in the history of the euro currency.
ii. This week, the Federal Reserve is expected to increase rates by 75 basis points for the fourth time in a row.
iii. The Bank of England could join the club on Thursday.
Content:
. The Interest Rate race has just started, why?
. The impact on different currencies
. It may not be all bad news, why?
With higher interest rates, it attracts investors to buy its currency, in this case the USD.
Currency is always a pair, when USD strengthens, the other side weakens.
When a currency gets weaker, it is very bad news for inflation because they will have to pay more on their imports.
Therefore in order to counter inflation, one of the best measures is to hike rate
Expect more volatility in the currencies market, meaning currencies will take its turn to move.
And if you are a trader, you should welcome volatility. Because with volatility, there are opportunities.
GBP Futures
0.0001 = $6.25
0.001 = $62.50
0.01 = $625
0.1 = $6,250
1.1000 to 1.2000 = $6,250
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
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Bullish Engulfing
Engulfing Candlestick PatternEngulfing candlestick is formed when it completely engulfs the previous more than one candle but be considered an engulfing candlestick pattern because in Engulfing at least one candle must fully engulf.
Types of Engulfing Candlestick Pattern
Bullish Engulfing Pattern
Bearish Engulfing Pattern
#1 Bullish Engulfing Pattern
Bullish Engulfing pattern consists of two candle formations, the first candle is the small body and the second candle is the bigger. The second big candle should be fully engulfed than the previous small candle. This is called the bullish engulfing pattern.
#2 Bearish Engulfing Pattern
Bearish Engulfing pattern consists of two candle formations, the first candle is a small Bullish candle and the second is the bigger bearish Candle than the previous bullish candle. The Second big bearish candle should fully engulf the previous one or more small candles. This is called a bearish engulfing pattern.
Let's talk about Candlestick Chart PatternsThe candlestick chart patterns are used by traders to set up their trades, and predicting the future direction of the price movements. There are many candlestick chart patterns. I will be discussing a few of those.
✅ Morning Star is formed after a downtrend indicating a bullish reversal. Generally made of 3 candlesticks, first being a bearish candle, second a Doji, and third being a bullish candle. The first candle shows the continuation of the downtrend, the second being a Doji shows indecision in the market and the third bullish candle shows that bulls are back in action.
✅ Bullish Hammer is a single candlestick pattern, which is formed at the end of the downtrend and shows bullish reversal. The real body of this candle is small with a long lower wick which should be more than twice the real body. This candle is formed when the seller pushes the price downwards but at the same time buyers arrive and push the prices up.
✅ Bullish Engulfing is formed after a downtrend, indicating a bullish reversal. It is formed when a bearish candle is fully engulfed by a bullish candle which shows that the bulls are back in the market.
✅ Three White Soldiers is a multiple candlestick pattern that is formed after a downtrend indicating a bullish reversal. It is formed when three consecutive bullish candles appear one after the other. These three candles show a strong bullish trend.
✅ Hanging Man is generally formed at the end of an uptrend and signals bearish reversal. The real body of this candle is small and is located at the top with a lower shadow which should be more than twice the real body. This candlestick pattern has no or little upper shadow.
✅ Dark Cloud Cover is formed by two candles, the first candle being a bullish candle which indicates the continuation of the uptrend. The second candle is a bearish candle that opens the gap up but closes more than 50% of the real body of the previous candle which shows that the bears are back in the market and a bearish reversal is going to take place.
✅ Bearish Engulfing is formed by two candles, after an uptrend indicating a bearish reversal. It is formed by two candles, the second candlestick engulfing the first candlestick. The first candle being a bullish candle indicates the continuation of the uptrend. The second candlestick chart is a long bearish candle that completely engulfs the first candle and shows that the bears are back in the market.
✅ Evening Star is made of 3 candlesticks, first being a bullish candle, second a Doji, and third being a bearish candle. The first candle shows the continuation of the uptrend, the second candle being a doji indicates indecision in the market, and the third bearish candle shows that the bears are back in the market and reversal is going to take place.
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Please comment and let us know your thoughts on it.
Happy Trading
USDJPY With Several Evidences For A Potential Bottom FormationHello traders!
Today we will talk about weekly USDJPY chart and we will show you many evidences for a potential bottom formation.
Well, for the begining let's talk about wave structures from Elliott Wave perspective. USDJPY is in a downtrend since March, but the wave structure is slow, choppy and overlapped which we see it as a complex corrective W-X-Y decline and we know that once corrections fully unfolds, we can expect a reversal.
The next very important evidence is an ending diagonal (wedge) pattern placed in third leg Y. The ending diagonal is a special type of wave that occurs in wave 5 of an impulse, or wave C/Y of a correction. This wave often occurs when the preceding move of the trend has gone too far, too fast and has run out of steam. An ending diagonal pattern is a type of pattern that can occur at the completion of a strong move. It reflects a “calming” of the market sentiment such that price still moves generally in the direction of the larger move, but not strongly enough to produce an impulsive wave. Ending diagonals consist of five waves, labeled 1-2-3-4-5, where each wave subdivides into three legs. Waves 1 and 4 overlap in price, while wave 3 can not be the shortest amongst waves 1, 3 and 5.
The reason why they are so interesting is because they are indicating a reversal, usually a strong one.
The next interesting evidence is that we are already seeing bounce and recovery with quite big weekly candlestick, completely covered the previous one, called bullish engulfing candlestick formation which also suggests a bullish reversal from the lows.
If we also consider current break above strong weekly trendline, then with so many evidences, we can easily confirm a potential bottom and bullish reversal.
Trade well!
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TOP 6 Candlestick PatternsHi,
I would like to share my TOP 6 candlestick patterns, you can also name your TOP 3 in the comment section.
Perfect scenario: identify the strong area, wait for the price coming inside of it, wait for a candlestick pattern which consists of at least two candles and it has to form in at least 1-hour timeframe (lower TF candlestick patterns are poor), wait for a pullback and GO.
Always wait for a small pullback after the candlestick pattern has formed, you will get a better price. It is so rear case that after candlestick pattern formation the price goes immediately into the shown direction.
MORNING STAR
The Morning Star is a bullish bottom reversal pattern. It warns of weakness in a downtrend that could potentially lead to a trend reversal, especially if it forms on a strong support level. The morning star consists of three candlesticks with the middle candlestick forming a star. The first candlestick in the morning star pattern must be a red candlestick with a relatively large real body. The second candlestick is the star, which has a short real body that is separated from the real body of the first candlestick. The star does not need to form below the low of the first candlestick and can exist within the lower shadow of that candlestick. The star is the first indication of weakness as it indicates that the sellers were not able to drive the price close much lower than the close of the previous period.
This weakness is confirmed by the third candlestick, which must be green in color and must close 50% above the body of the first candlestick.
EVENING STAR
The Evening Star is a bearish, top trend reversal pattern that warns of a potential reversal of an uptrend. It is the opposite of the Morning Star and, like the morning star, consists of three candlesticks, with the middle candlestick being a star. The first candlestick in the evening star must be green in color and must have a relatively large real body. The second candlestick is the star, which is a candlestick with a short real body that does not touch the real body of the preceding candlestick. The star can also form within the upper shadow of the first candlestick. The star is the first indication of weakness as it indicates that the buyers were unable to push the price up to close much higher than the close of the previous period. This weakness is confirmed by the candlestick that follows the star.
This candlestick must be a red candlestick and must close 50% above the body of the first candlestick.
BULLISH/BEARISH ENGULFING
The Engulfing candlestick pattern is a two-candle reversal pattern. A reversal pattern can be bearish or bullish, depending on whether it appears at the end of an uptrend (bearish engulfing) or a downtrend (bullish engulfing pattern). The first candle is a small body, followed by the second candle whose body completely engulfs the previous candle body and closes in the opposite direction of the trend.
BULLISH/BEARISH RAILWAY TRACKS
A bearish railway track pattern has the first candlestick bullish and the second candlestick bearish. That fact that there is a sudden change from bullish to bearish candlestick should be a good indication that there might be a bearish trend forming. If you see it inside of the determined strong area the more powerful it is!
Regards,
Vaido
Past history candlestick analysis for Hartalega
On March 8, 2018, an Inverted Hammer + Bullish Engulfing appeared, signifying a change to the down trend. This is further confirmed by the support line in blue.
Stock rallied for roughly a month plus until April 12, where a Hanging Man appeared (Note the Hanging Man is not as potent as a Shooting Star, but it still gives the signal that the bullish trend is coming to an end). The trend then start to change.
Stock goes downwards and tumbled, until a bullish engulfing pattern emerges on April 25 - 26. Interestingly, this happened 3 times! Triple bullish engulfing pattern! This also serves as a support line, which supported the price level on June 28 - 29.
Stock rallied up and hit a bearish Harami pattern on June 11 - 12, signalling that bull has lost it's momentum. Stock drops and hit the support line where a bullish engulfing pattern appears, and then goes upwards until it hits a Doji on July 2. Market comes to a neutral tone and market is unsure to go up or go down.. in the end it goes downwards.
Price could go further down until it hits the support line and change upwards, depending on the candlestick formation at that time. If it goes down it would hit the second support line formed by the inverted hammer.
Notice the MACD histogram is showing an upward trend, signifying an uptrend of price.
