Candlestick analysis
Candlestick Charts Part 3: ContinuationHello everyone, as we all know the market action discounts everything :)
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NOTE: some pattern could be reversal and continuation patterns depending if its in an uptrend or downtrend.
Today's video will be about the Candlestick Chart : Continuation Patterns.
Continuation Patterns are candlestick patterns that tend to resolve in the same direction as the prevailing trend.
So lets start by talking about the different types of Patterns :
Bullish Continuation Patterns
Bearish Continuation Patterns
And they are divided into 3 groups :
Weak Patterns
Reliable Patterns
Strong Patterns
We Start with the Strong Continuation Patterns :
1) Rising Three Methods :
is a five candlestick bullish continuation pattern. The first candlestick is a large bullish candlestick that takes place during an uptrend. Then a group of two to four small body candlesticks (either bullish or bearish) retreat within the price range established by the first day’s real body bullish candlestick. The final candlestick of the pattern is another large bullish candlestick that closes above the first day’s closing price.
2) Falling Three Methods :
is a five candlestick bearish continuation pattern. The first candlestick is a large bearish candlestick that takes place during a downtrend. Then a group of two to four small body candlesticks (either bullish or bearish) slowly ascend within the price range established by the first day’s real body bearish candlestick. The final candlestick of the pattern is another large bearish candlestick that closes below the first day’s closing price.
3) Deliberation in an uptrend :
A deliberation structure is comprised of three Japanese candlesticks. All three are bullish (green). The first is a candlestick with a small body followed by a large full candlestick. Finally, the last candlestick also has a small body and forms a star.
4) Concealing Baby Swallow in an uptrend :
The Concealing Baby Swallow is a four-line candlestick pattern, which appears so rarely. Two Black Marubozu candles appearing one after the other are very uncommon situation on the candlestick charts what limits the appearance of this pattern.
Now Lets Talk about the Reliable Continuation Patterns :
1) Bullish Separating Lines :
Bullish separating lines pattern is a two-candle bullish continuation candlestick pattern that comes up in the middle of a bullish trend. It indicates that the current bullish trend is about to continue after a temporary pullback.
2) Bearish Separating Lines :
The bearish separating line is known as a bearish continuation pattern. The first line is a white candle that comes up as a long line in a downtrend. The second line is made up of a black candle that comes up as a long line. Both bars will open at the same price, and then the prices are separating.
3) Bullish Matching High :
This pattern involves two or more matching highs. On a lower timeframe chart this pattern will look like a support or resistance being broken.
Breakouts are used by traders a trigger to enter the market with the momentum of the breakout signaling a new leg of a trend.
4) Bearish Matching Low :
This pattern involves two or more matching lows which if broken is a signal that there will be a resumption of the current trend.
5) Upside Tasuki Gap :
It is a bullish continuation candlestick pattern which is formed in an ongoing uptrend.
This candlestick pattern consists of three candles, the first candlestick is a long-bodied bullish candlestick, and the second candlestick is also a bullish candlestick formed after a gap up.
The third candlestick is a bearish candle that closes in the gap formed between these first two bullish candles.
6) Downside Tasuki Gap :
Downside Tasuki Gap is a bearish continuation pattern that forms in the middle of a downtrend. The first candle is bearish, and is followed by a negative gap and another bearish candle. The third candle is bullish and closes right in the gap between the first two bars.
And Last but not least The Weak Continuation Patterns :
1) Advance Block :
The advance block is a three bar pattern. The pattern appears as a block of three white, rising candlesticks, each with a shorter body than the last.
The candles should not have overly long shadows as these can sometimes develop into other pattern types such shooting stars and hanging men.
2) Stick Sandwich :
The stick sandwich candlestick pattern can occur in both bull and bear markets. The stick sandwich candlestick pattern consists of three candlesticks, where one candlestick has an opposite colored candlestick on both sides. The closing prices of the two candlesticks that surround the opposite colored candlestick must be same.
3) Bullish Side by Side White Lines :
– It occurs during an Uptrend; confirmation is required by the candles that follow the Pattern.
– The First Candle is white.
– Then there is a Gap Up between the First and Second Candle.
– The Second and Third Candle are white, their Real Bodies have the same length; moreover they have the Open at the same level (More or less) and is above the Real Body of the First Candle.
4) Bearish Side by Side White Lines :
– It occurs during a Downtrend; confirmation is required by the candles that follow the Pattern.
– The First Candle is black.
– Then there is a Gap Down between the First and Second Candle.
– The Second and Third Candle are white, their Real Bodies have the same length; moreover they have the Open at the same level (More or less) and is below the Real Body of the First Candle.
5) Bullish On Neck Line:
The on neck candlestick is a continuation pattern. In an on neck pattern, the first candle is Bullish and the second one is Bearish. The first candle’s body is long while the second one is shorter. The second candle closes near the first one or close to the first candle. The pattern gets its name because at the point where the closing prices of the two are nearly the same or same, it forms a horizontal line which looks like a neck or a neckline.
6) Bearish On Neck line :
The on neck candlestick is a continuation pattern. In an on neck pattern, the first candle is bearish and the second one is bullish. The first candle’s body is long while the second one is shorter. The second candle closes near the first one or close to the first candle. The pattern gets its name because at the point where the closing prices of the two are nearly the same or same, it forms a horizontal line which looks like a neck or a neckline.
I hope that I was able to help you understand Continuation Patterns in Candlestick Charts better and if you have any more questions don't hesitate to ask.
Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI , The MACD , The Bollinger Bands , The Different Types Of Trading Strategies, Candlestick Charts Part 1 & 2 links will be bellow
Candlestick Chart Part 2 : ReversalsHello everyone, as we all know the market action discounts everything :)
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Today's video will be about the Candlestick Chart : Reversal Patterns.
So lets start by talking about the different types of Patterns :
Bullish Reversal Patterns
Bearish Reversal Patterns
And they are divided into 3 groups :
Weak Patterns
Reliable Patterns
Strong Patterns
We Start with the Weak Reversals :
1) Dragonfly Pattern :
A dragonfly doji candlestick is a candlestick pattern with the open, close, and high prices of an asset at the same level. A dragonfly doji pattern does not appear constantly. It is used as a technical indicator that signals a potential reversal of the asset’s price.
2) Hammer & Hanging Man Patterns :
The Hammer is a bullish reversal pattern that forms during a downtrend. It is named because the market is hammering out a bottom.
When the price is falling, hammers signal that the bottom is near and the price will start rising again.
The long lower shadow indicates that sellers pushed prices lower, but buyers were able to overcome this selling pressure and closed near the open.
The Hanging Man is a bearish reversal pattern that can also mark a top or strong resistance level.
When the price is rising, the formation of a Hanging Man indicates that sellers are beginning to outnumber buyers.
The long lower shadow shows that sellers pushed prices lower during the session.
Buyers were able to push the price back up some but only near the open.
3) Inverted Hammer & Shooting Star Patterns :
The Inverted Hammer occurs when the price has been falling suggests the possibility of a reversal. Its long upper shadow shows that buyers tried to bid the price higher.
However, sellers saw what the buyers were doing, said "No!" and attempted to push the price back down.
The Shooting Star is a bearish reversal pattern that looks identical to the inverted hammer but occurs when the price has been rising.
Its shape indicates that the price opened at its low, rallied, but pulled back to the bottom.
4) Dark Cloud Pattern :
A 2-candle pattern. The first candle is bullish and has a long body. The second candlestick should open significantly above the first one’s closing level and close below 50% of the first candlestick’s body. The sell signal is moderately strong.
5) Piercing Pattern :
A 2-candle pattern. The first candlestick is long and bearish. The second candlestick opens with a gap down, below the closing level of the first one. It’s a big bullish candlestick, which closes above the 50% of the first candle’s body. Both bodies should be long enough.
6) Upside Gap Three Method :
The upside gap three methods candlestick pattern is a bearish continuation pattern that only occurs during an uptrend. It consists of three candles. The first two candles are long and white in the direction of the prevailing trend. The second black candle creates an upside gap. The third candle fills the gap between the first and the second candle.
7) Downside Gap Three Method :
The downside gap three methods candlestick pattern appears during a downtrend and consists of three candles. The first two candles have a gap down between them while the third candle covers the gap between the first two. The gap between the first two candles simply gets filled.
8) Bearish Harami Pattern :
A 2-candle pattern. The body of the second candle is completely contained within the body of the first one and has the opposite color.
9) Bullish Herami Pattern :
A 2-candle pattern. The body of the second candle is completely contained within the body of the first one and has the opposite color.
Now Lets Talk about the Reliable Reversals :
1) Bullish Engulfing Pattern :
A 2-candle pattern appears at the end of the downtrend. The first candlestick is bearish. The second candle should open below the low of the first candlestick low and close above its high.
2) Bearish Engulfing Pattern :
A 2-candle pattern. The first candlestick is bullish. The second candlestick is bearish and should open above the first candlestick’s high and close below its low.
3) Tower Top Pattern :
The tower top is a reversal pattern that occurs at high price levels. Typically one or more long bullish candlesticks are followed by a few smaller real body candlesticks and then the pattern is completed with one or more large bearish candlesticks.
4) Tower Bottom Pattern :
The tower bottom is a reversal pattern that occurs at low price levels. There is one or more long bearish candlesticks followed by a few smaller body candlesticks and then concluded with one or more large bullish candlesticks.
5) Bullish Abandoned Baby Pattern :
The bullish abandoned baby is a pattern that appears at the end of a downtrend and signals reversal to an uptrend. Simply put, it signals an end of the selling pressure of the bears and return of the bulls in the market.
This pattern consists of three candlesticks: the first candle has a black (or red) big body, the second is a small and bearish candle – or a Doji, and the third is white (or green) candle.
6) Bearish Abandoned Baby Pattern :
The bearish abandoned baby is a reversal pattern that forms during an uptrend. It is characterized by three candles, where the first candle is long bodied and white/green.
The second candle is a Doji that gaps above the close of the first bar in the series. The third candle opens below the close of the second bar and is long bodied and black/red.
7) Dumpling Top Pattern :
A dumpling top occurs when small real body candlesticks slowly rise and then move in a neutral to downward direction. The dumpling top pattern is complete when there is a bearish candlestick that gaps down from the other candlesticks.
8) Fry Pan Bottom Pattern :
The opposite of the dumpling top is the fry pan bottom pattern. The fry pan bottom occurs when small real body candlesticks slowly move downward and then move in a neutral to upward direction. The fry pan bottom pattern is complete when a bullish candlestick gaps up from the rest of the candlesticks.
9) Bullish Belt Hold Pattern :
A bullish belt hold shows up in downtrends. The pattern can be recognized by one long, full-bodied candlestick that is bullish and opens at a new recent low. The bullish belt hold candle is expected to have a flat or nearly flat bottom. The top has a small shadow, relative to the length of the body.
10) Bearish Belt Hold Pattern :
The bearish belt hold is the complete opposite and it comes up in uptrends. To detect it, look for a long full-bodied, bearish candlestick that stands out at the top of an uptrend because it will get to a new recent high and it should be noticeably longer than the other candles.
11) Tweezer Top Pattern :
The Tweezer Top pattern is a bearish reversal candlestick pattern that is formed at the end of an uptrend.
It consists of two candlesticks, the first one being bullish and the second one being bearish candlestick.
Both the tweezer candlestick make almost or the same high.
12) Tweezers Bottom Pattern :
The Tweezer Bottom candlestick pattern is a bullish reversal candlestick pattern that is formed at the end of the downtrend.
It consists of two candlesticks, the first one being bearish and the second one being bullish candlestick.
Both the candlesticks make almost or the same low.
And Last but not least The Strong Reversal Patterns :
1) Three White Soldiers Pattern :
A 3-candle pattern. There’s a series of 3 bullish candles with long bodies. Each candle should open within the previous body, better above its middle. Each candle closes at a new high, near its maximum. The reliability of this pattern is very high, but still, a confirmation in the form of a white candlestick with a higher close or a gap-up is suggested.
2) Three Black Crows Pattern :
A 3-candlestick pattern. There’s a series of 3 bearish candles with long bodies. Each candle opens within the body of the previous one, better below its middle. Each candle closes at a new low, near its minimum. The reliability of this pattern is very high, but still, a confirmation in the form of a bearish candlestick with a lower close or a gap-down is suggested.
3) Morning Star Pattern :
A 3-candle pattern. After a long bearish candle, there’s a bearish gap down. The bears are in control, but they don’t achieve much. The second candle is quite small and its color is not important, although it’s better if it’s bullish. The third bullish candle opens with a gap up and fills the previous bearish gap. This candle is often longer than the first one.
4) Evening Star Pattern :
A 3-candle pattern. After a long bullish candlestick, there’s a bullish gap up. The bulls are in control, but they don’t achieve much. The second candlestick is quite small and its color is not important. The third bearish candle opens with a gap down and fills the previous bullish gap. This candle is often longer than the first one.
5) Bullish Three Line Strike Pattern :
A bullish three-line strike is made up of four candles. Of these, the first three are bullish, while the last is bearish. It is made up of three strong bullish candles that progressively end higher followed by a final strike candle. The strike candlestick is bearish and begins at or higher than the third candle but closes at least lower than the open of the first candle.
6) Bearish Three Line Strike Pattern :
A bearish three-line strike is a four candle continuation pattern that comes up in a bearish trend. The first three candles are bearish, while the last candle is positive and ends above the highest close of the previous three candles.
I Do wanna mention General Reversal Patterns :
Three Mountains is the same as Triple Top Pattern
Three Rivers is the same as Inverted Triple Top Pattern
Buddha Top is the same as Head and Shoulders Pattern
Inverted Buddha is the Same as Inverted Head and Shoulders Pattern
I hope that I was able to help you understand Reversal Patterns in Candlestick Charts better and if you have any more questions don't hesitate to ask.
Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI , The MACD , The Bollinger Bands , The Different Types Of Trading Strategies, Candlestick Charts Part 1 links will be bellow
Candlestick Charts Part 1 Hello everyone, as we all know the market action discounts everything :)
_________________________________Make sure to Like and Follow if you like the idea_________________________________
A lot of people wanna start trading but they don't know where to start, So i decided to create a series of videos to help new traders understand the Market, Charts, and Patterns.
Today's video will be about the Candlestick Chart and it's going to be Part 1 out of 3
Part 1 will be about the theory and structure of the Candlesticks and the different types of Candles.
Part 2 will be about Candlesticks Reversal Patterns.
Part 3 will be about Candlesticks Continuation Patterns.
So let's start with talking about the candlestick chart in general:
In the 1700s, a Japanese man named Homma discovered that, while there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders.
Candlesticks show that emotion by visually representing the size of price moves with different colors. Traders use candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.
There are 3 different types of Candles :
Bullish Candle
Bearish Candle
Doji
1) Bullish Candle
A Bullish candlestick shows the market's open, high, low, and close price for the day. The candlestick has a wide part, which is called the "real body." Bullish means that the market is going up.
This real body represents the price range between the open and close of that day.
The Shadow or wick or tail represent the high and low of the market.
2) Bearish Candle
A Bearish candlestick shows the market's open, high, low, and close price for the day. The candlestick has a wide part, which is called the "real body." Bearish means that the market is going down.
This real body represents the price range between the open and close of that day.
The Shadow or wick or tail represent the high and low of the market.
3) Doji
The Doji has 5 Different types :
Standard Doji
A Standard Doji is a single candlestick that does not signify much on its own. To understand what this candlestick means, traders observe the prior price action building up to the Doji.
Trades based on Doji candlestick patterns need to be taken into context. For example, a Standard Doji within an uptrend may prove to form part of a continuation of the existing uptrend. But it could be a reversal of an uptrend which shows the importance of confirmation post the occurrence of the Doji.
Long-legged Doji
The Long-Legged Doji simply has a greater extension of the vertical lines above and below the horizontal line. This indicates that during the timeframe of the candle price action dramatically moved up and down but closed at virtually the same level that it opened. This shows the indecision between the buyers and the sellers.
Dragonfly Doji
The Dragonfly Doji can appear at either the top of an uptrend or the bottom of a downtrend and signals the potential for a change in direction. There is no line above the horizontal bar which creates a ‘T’ shape and signifies that prices did not move above the opening price. A very extended lower wick on this Doji at the bottom of a bearish move is a very bullish signal.
Gravestone Doji
The Gravestone Doji is the opposite of the Dragonfly Doji. It appears when price action opens and closes at the lower end of the trading range. After the candle open, buyers were able to push the price up but by the close they were not able to sustain the bullish momentum. At the top of a move to the upside, this is a bearish signal.
4 Price Doji
The 4 Price Doji is simply a horizontal line with no vertical line above or below the horizontal. This Doji pattern signifies the ultimate in indecision since the high, low, open and close (all four prices represented) by the candle are the same. The 4 Price Doji is a unique pattern signifying once again indecision or an extremely quiet market.
I hope that I was able to help you understand The basics of The Candlestick Chart and if you have any more questions don't hesitate to ask.
Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI , The MACD , The Bollinger Bands and The Different Types Of Trading Strategies links will be bellow
The Best & Most Reliable Candlestick Patterns To UseIn this video I explain my favourite candlestick patterns and how to use them in your own trading.
Here we describe:
Engulfing Candles
Doji Candles
Hammer Candles
And I explain how to use them with confluence & context of where on the chart they occur.