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Candlestick Analysis

ENGULFING CANDLE. Powerful reversal candlestick pattern🕯 ✅Candlestick patterns trading is one of the oldest but most effective ways to analyze the foreign exchange market. The trader needs to find certain patterns, and based on them, decide where the price will go. Today we will talk about one of these candlesticks, which is called the "engulfing candle". There are two types of it: bullish and bearish. The appearance of such a model on the chart with a high probability indicates a possible reversal of the trend and is a signal to enter the market. Types of engulfing and their features ⚠️So, we realized that there are two types of this candle: 🟢Bullish. It indicates that the trend is turning towards an increase in the value of an asset or currency pair. The candle must engulf the range of the previous bearish candle to be valid. 🟢Bearish. The same as with bullish, only the opposite. It indicates that the trend is turning towards a decrease in the value of the asset. In this case, the candle must engulf the range of the previous bullish candle. ✅The formation of the "Bullish engulfing" candle says that buyers have sat on the throne, and "Bearish" - sellers. Let's discuss the theoretical foundations of the pattern. In the case of the "bullish engulfing" pattern, everything will be the same, just the opposite. Rules for the formation of the "bearish engulfing" pattern: There should be a bullish trend in the market, and the price should be on a key level. ❗️A long-bodied bullish candle appears (that is, directed towards the trend). The opening of the second candle should be carried out with a gap relative to the closing of the first, and its body should be larger than that of the previous one. It seems to engulf the trend with its dimensions, and therefore it is necessary to sell (a bearish candle indicates the beginning of a downward trend). ❤️ Please, support our work with like & comment! ❤️
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by UnitedSignals
6
Morning star candle pattern buyer-seller psychologyMorning star candle pattern buyer-seller psychology: The sellers are in complete control in the downtrend before the pattern starts, * The first candle in that pattern sells heavily, and with the Big Red candle the sellers paint a picture of their full control. • The opening of the 2nd candle has a selling down through a gap down, then the sellers start buying when the price goes down. This leads to a lot of buyer-seller fights and an indication of small body red / green candles. * The seller loses control of the 3rd candle through the gap up and the buyer takes full control of the green candle. The uptrend begins. # Conservative traders wait for the 4th candle for confirmation and many enter the 3rd candle gap up
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by PRINCE_MAHMUD
The Daily TimeframeI am commonly asked what is the most important time frame to analyse your pairs on. Which doesn't always result in a simple answer since multiple time frames must be taken into consideration for successful trading e.g. weekly/daily/4h/1h. However, there is the one that is universally considered to be principal and that is the daily time frame. Here are some of the main reasons why so many traders rely on a daily time frame and why you should to: 1️⃣ - Daily time frame shows a global market trend at the same time reflecting a mid-term and short-term perspective allowing the trader catch trend following moves and spot early reversal signs. The simple nature of one candle closure per day keeps things a lot more simple compared to lower timeframes. 2️⃣ - Covering multiple perspectives, the daily time frame is the foundation of the majority of the trading strategies and is the main source of key levels & pattern analysis. 3️⃣ - Filters out news events that happened during the trading day. It shows the composite reaction of the market participants to all the data posted in the economic calendar. 4️⃣ - Daily time frame reflects all trading sessions. Within one single candle, we see the outcome of the Asian, London, and New York Sessions. 5️⃣ - Daily candle filters out all the noise from lower time frames & intraday price fluctuations and sudden spikes & rejections. 6️⃣ - Similar to covering all the trading sessions, daily time frame also mirrors the activities of big players like hedge funds and banks. Showing us the flow & direction of big money. ⚠️ Please note: Despite the daily timeframe being so important for analysis, still do not neglect other time frames. The most accurate trading decision can be made only relying on a combination of intraday and daily time frames.
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by NimmoCapital
Learn To Trade Technical Analysis Hammer & Shooting StarHey Traders today I wanted to go over what I believe is one of the best ways to trade any market with Japanese Candlesticks using hammers and shooting stars. Normally you want the wick of the candle to be at least twice the size of the body of the candle. Alot of times they can lead to explosive moves in the markets. So lets dive in and see how to use this powerful technique in your trading arsenal. Enjoy! Trade Well, Clifford
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by TradeTheIndex
5
What are candlesticks in trading and how to use them?🕯 ✅The price dynamics of an asset are displayed on the chart in different formats, including bars, lines, or candles. The latter format is most popular among traders and is often used in technical market analysis. What are candles and how to work with them? 🟢Candlesticks (Japanese candlesticks) are a graphical way of displaying price dynamics, in which vertical rectangles and lines are used. This method was invented on the rice exchanges of Japan in the 17th century, from where it got its name. A price candle consists of two main elements: 1️⃣the body is a vertical rectangle that shows the opening and closing levels of trades; 2️⃣wicks (shadows, tails) - vertical lines from above and below the body of the candle, reflecting fluctuations in value in the interval between opening and closing. ❗️The main advantage of a candle over bars and a linear chart is that it allows you to get 4 important indicators for technical analysis at once: High - the highest price for the period; Low - the lowest price for the period; Open - the opening price of the period; Close - the closing price of the period. 🔴When using a linear graph to get the same information, 4 indicators would have to be displayed on the screen at once, which is inconvenient and complicates the perception of information. At the same time, candles display the process of cost formation in a specific time interval, so the position and appearance of candles on the hourly and daily periods will differ significantly Types of candles ⚠️Two main types of candlesticks correspond to market trends: Bullish candle - formed when the closing price of the period was higher than the opening price. On the chart, such a candle is displayed in green (on b / w - white) and indicates the victory of buyers in this time. A bearish candle - is formed if the period is closed at a price lower than it was opened. On the chart, bearish candlesticks have a red color (on b / w - black) and they show that sellers are dominating at the moment. ❤️ Please, support our work with like & comment! ❤️
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by UnitedSignals
15
Can You Profit Day Trading? YesKeep Trading Simple!!! Volume is the heart of trading Forex. This tells us how much interest is in a candle or at a price level zone- where big money and hedge firms are trading. On chart example: London and NY session overlap is a very high liquidity and volume time every day to trade. Only 4 hour period. Use only: 1) Simple Volume indicator 2) Session indicator 3) Bolliger Bands indicator Rules are: 1) Is price action over a critical price action level? yes- 1.55000 2) Is price action over 20 ema of Bolliger Bands? yes- over yellow line 3) Use ATR for stop loss, entry and targets- this is something that all Forex traders should know on pair that is being trader. 4) On chart is 25 pip stop vs 62.5 pip is risk reward 1:2.5 setup 5) Only find setup at around start of London/NY overlap and trade during this 4 hour time period. Close all trades at end on London session.
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by Anbat
Smart Money (Volume Spread Analysis) Works In Forex!!!Trading in the shadow of Smart Money. Learn to trade in the same direction. If you are going to play it You better understand it. The Masters & Teachers of the Wyckoff Method & Volume Spread Analysis: Tom Williams and Richard Wyckoff. If you put on your charts just daily charts with the On Balance Volume indicator only (or Tick volume) - might change how you look at and trade Forex. The chart never lies!!! The “Smart Money” Trade Large Enough Size To Actually Affect the Price Movement of the Instrument Being Traded and Can Change the Trend of Price But They CANNOT Hide Their Footprints on a Chart When You Learn VOLUME SPREAD ANALYSIS What Is Volume Spread Analysis? Most traders are aware of the two widely known approaches used to analyze a market- fundamental analysis and technical analysis.Volume Spread Analysis, however, is a third approach to analyzing a market. It combines the best of both fundamental and technical analysis into a singular approach that answers both questions of 'why' and 'when' simultaneously.Smart Money buy or sell they cannot hide their volume footprint (although they try!!) At it’s core, Volume Spread Analysis or VSA is a methodology based on the original works and teachings of Richard D Wyckoff, a trader in the early 1900’s. The methodology seeks to establish the “cause” of price movement on a chart. The “cause” is simply the imbalance of supply and demand as the market trades, resulting in strength or weakness in the market being charted. For the correct analysis of volume, you need to understand that the recorded volume contains only half the knowledge required for a correct analysis. The other half of the knowledge is found when observing the spread (or range) of the price bar and the closing price on that bar. Volume indicates the amount of activity on the price bar and the spread or range of the bar shows what the price actually did, and most importantly where the price finally closed. FYI: Please you tube and/or google VSA more- this will simplify Forex trading. How Can Volume Spread Analysis Identify These Moves? Volume = Activity. Interested in volume because it tells consensus of opinion among “Smart Money” Spread and Close in Relation to the background Confirm
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by Anbat
What Does the Inverted Hammer Candlestick Pattern Mean? Hello Traders! Have you ever wondered when will a strong trend end? Do you struggle to spot candlestick patterns that potentially signal when the bulls or bears might take over? Take a look at this example of EUR/CAD and let's see how the trade plays out! :) About the Inverted Hammer Candlestick Pattern and Why It Forms: The Inverted Hammer is a bullish reversal candlestick pattern. It occurs when the price has been falling and suggests the possibility of a reversal. Its long upper shadow shows that buyers tried to bid the price higher. However, sellers attempted to push the price back down. Since the sellers weren't able to close the price any lower, this is a good indication that everybody who wants to sell has already sold. And, if there are no more sellers, who are left? Buyers! And just an important observation, the Inverted Hammer has a small real body, and has a large upper shadow with a small or no lower shadow (also known as "wick"). Would you like to receive more "live charting" tutorials like this?? Comment below and let us know! :) Happy Trading!
Education
by BKTradingAcademy
2
CANDLESTICK PATTERNS BASICS | Engulfing Candle 📚 Hey traders, In this educational post, I want to discuss with you one of the most accurate REVERSAL candlestick patterns - the engulfing candle. On EURUSD chart, I spotted for you bullish & bearish examples of this pattern. The logic behind this pattern is quite simple: ⭐️In a bullish trend, after a strong directional movement, the price reaches some important structure level. Growing steadily and forming a sequence of green bullish candles the price suddenly forms a strong bearish candle. What is particular about that candle is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bullish candle. 🔻Such a candle we will call a bearish engulfing candle. Most of the time it signifies a strong spike in selling volumes and willingness of sellers to push. With a high probability, such a formation leads to a pullback or even a trend reversal. ⭐️In a bearish trend, after a strong short rally, the price reaches some demand cluster. Instead of breaking that and going lower, the price forms a strong bullish candle. That candle engulfs the range of the previous bearish candle & its body size exceeds the size of the previous candle. 🟢Such a candle we will call a bullish engulfing candle. Quite often such a formation leads to a pullback or even a trend reversal. 🔔And there is just one single tip that will dramatically increase your performance trading the engulfing candle: It is recommended to rely on this pattern ONLY IF it is formed on a key level: ❗️Bullish engulfing candle must strictly form on a strong support. ❗️Bearish engulfing candle must strictly form on a strong resistance. Forming beyond key levels, the pattern occasionally will give false signals. ⏳Preferable time frames to trade engulfing candles are daily/4h. Learn to spot this pattern & you will see how efficient it is. What candlestick patterns do you want to learn in the next posts? ❤️Please, support this post with like and comment!❤️
Education
by VasilyTrader
28
Engulfing (Outside Bar) & Harami (Inside Bar) PatternsFor your homework: find all engulfing, harami and pin bar setups on different Forex pairs on hourly time frames or higher. Where did these patterns happen- Price and Time? How could you have traded them? entry, stop loss and targets What risk management would you use or lot size? What is a pip move worth with keeping trades 1% to 2% of your account. These two patterns are very powerful, on all time frames- as usual higher time frames are more reliable. You would need to adjust your risk management the higher time frames you trade to generally- lower lot sizes and larger stop losses. On example daily GBPJPY chart- these moves from both engulfing and Harami two candlestick pattern do not look like much movement, but yellow noted lines are 100 pips each. How you set up entry, stop losses and targets is all up to you= but remember do not let emotions control you and let greed ruin profitable trades.
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by Anbat
Bearish Evening Three Candle (Reversal Pattern)Evening Three Candle (pattern) How To Trade: Evening Star- is a three candle pattern with the highest middle candlestick, but also the smallest body and slight shadows/wicks. The third candle goes below the bottom half (1/2) of the body of the first candle and its opening FALLS below the opening price of the middle candle. The evening star is a reflection of the morning star formation. How To Trade: 1) On 4th candle open,use a sell market order to get into trade 2) Set stop loss higher then sell market order, give around top of 3rd candle (could be large, so adjust stop loss and risk management appropriately). You can find these bearish evening candles on lower time frames, but hourly, 4 hour and daily are better and more reliable, then lower time frames. 3) Set targets at least 1:1 to 1:3, stop loss and use ATR to get daily volatility range too.
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by Anbat
Trading Chaos By Bill Williams | Part 2Hello, everyone! Let's continue to study Trading Chaos by Bill Williams(BW). He divided 5 levels of proficiency from the beginner to the trader-expert. Candlesticks is the beginning of the beginner level but this knowledge is necessary for the successful trading. Figure 1 You can see here the bar structure, the open, low, close and high of the bar. This is very easy:) Figure 2 BW suggests to divide each bar by 3 equal parts to identify the information this bar can provide to us. Let's numerate each bar with two numbers. The first one - the number of the part of the bar where the open price located, the second one - where the bar has close price. Figure 3 The bar (1 1) means that bears tried to continue downward movement, but bulls took control in the end of the timeframe. This bar means the 85% probability that the price will go up next from 1 to 5 bars on the same timeframe. Bar (3 3) means the absolutely opposite. Figure 4 Bar (2 2) is indefinite bar. We cannot make decisions based on this type of bars. Figure 5 Bars (3 1), (2 1) and (3 2) called upbars or climbers. (3 1) provides the most piece of information that the market is in the uptrend. (2 1) bar is less informative than (3 1) but we can also say that the bulls defeated the bears on this bar. (3 2) is the least informative bar. Figure 6 Bars (1 3), (2 3), (1 2) are the downbars the logic is the same as for upbars. Figure 7 The trend direction can be roughly estimated as the two bars relationship. If the middle of the bar is above than the high of the previous bar market is in uptrend, if below - in downtrend, if inside - there is no clear trend. Next part will be more interesting, difficult and useful. Please give us a like and subscribe the blog to not miss it! DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions at the real market.
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by Skyrexio
Piercing Pattern (Blended Candlesticks)Can you blend or put together many candlesticks together in your head? If you can do this your profits and win rates will improve. Blended several four hour candlesticks together to make a Bullish piercing pattern: on AUDJPY 1) Look for a sharp down move (Bearish) - two /4 hour candlesticks 2) Look for a move up (Bullish)- three/4 hour candlesticks= with price action closing above 50% of previous RED or bearish move down. 3) Then do a buy order at that time with stop below lower bullish move and take profit or targets of 1:1 to 1:2, especially if day trading. ---Chart example if a great set up to trade: Look at highlighted boxes- what do you SEE? ---Yes, this blended candlestick idea can work on any time frames, but as usual higher time frames work better then lower time frames. IF, you can blend candlesticks together (some you tube videos on this idea too) you will be able to take an astronaut view on trades and not get tunnel vision but see the bigger picture or marco picture and see what price action on chart is telling you and direction or momentum is taking pair too. If you understand price action in the highlighted rectangle boxes on chart- then try to do this on other charts- find harami, engulfing, pin bar, etc... setups.
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by Anbat
Candlestick Patterns (Pin Bar) Part 3Pin Bars Are in Top 5 Reversal Candlestick Setups: Chart example Bearish Pin Bar 1) Price for Candlestick Push Up Higher, but Seller are stronger & end up pushing price action down to lower edge of candlestick 2) Wick/Shadow/Tail should be 2/3 or more of candlestick in length of real body 4) Real body should be 1/3 overall length of candlestick 5) A bearish trade of 1.26500 to 1.26300 to 1.26250 or 20 pips to 25 pips would have been easy to set up on chart example 6) Set entry at 1.26500, Set stop at 1.26700 and exit/profit at 1.26300. Yes, that is 1:1 Risk Reward- but with high win rate of 70% or more, it works Trading Forex is like playing baseball: sometimes you strike out, most of time you hit singles and sometimes doubles, triples & on occasionally you will hit a home run. If you scalp or day trade look for singles or doubles when trading, then you will trade for a lifetime. All about not being greedy and taking what a given pair, price, session and time will give you related to a single trade. Just take a piece of pip pie, you do not need the whole PIP PIE.
Education
by Anbat
Candlestick Patterns (Engulfing) Part 1Engulfing (Bullish or Bearish)- on any time frame, but like most things in Forex higher time frames works better and are more profitable too. Example chart is hourly of ChfCad, which moved great on Friday. Rules: Chart bullish engulfing ( can be used for bearish engulfing too) 1) Look for small bearish candlestick 2) Look for body of next bullish candlestick to engulf (yes, bottom of this candlestick can be same as close of 1st candle)- top closes above 1st candle. 3) Confirm time, which is New York session open (great) 4) Place buy market order on 3rd candle, after bullish engulfing 5) Place stop loss 20 to 25 pips away from entry related to using hourly time frame to do trade from 6) New 4 hour candle starts at 6 am to 10 am, PST/CA time- so I would let this trade run to at least 1:1.5 to 1:2.0 Risk Reward set up. seen on chart. 7) Always, risk management, remember: Pair, Price, Session and Time. I used only hourly, 4 hour and daily to trade from. Less noise & High profits.
Education
by Anbat