Candlesticks PatternsMost simply, candlestick charts are used by traders to represent the price evolution of an asset. While candlesticks may be harder to understand initially, they offer far more information than a simple line chart.
How to read a candle?
There are two colors: red and green. When a candle is red, its closing price was lower than the opening price: the price of the asset decreased during that trading period. When a candle turns green, the closing price was higher than the opening price as the asset's price increased.
Beyond color, let's break down the rest of the visual above:
Body: The body indicates the open-to-close range. In other words, it indicates the difference between the closing and the opening price.
Wicks: These are also called tails or shadows. They reveal the highest and lowest price of an asset within the candlestick period. If there is no wick, the opening and closing prices are the lowest/highest price.
Highest Price: The top of the upper wick indicates the highest price traded during the period.
Lowest Price: The lowest price traded during the period is indicated by the bottom of the lower wick.
Opening price: This is the price at which the first trade happened during the new candlestick time period. If the price goes up, the candle turns green and conversely turns red on a price decrease.
Closing price: The closing price is the last price traded during the period of the candle formation. If this price is above the opening price, the candle will be green, otherwise, it will be red.
Types of Candlestick Patterns:
The candlestick patterns can be divided into:
1.Continuation Patterns
2.Bullish Reversal Patterns
3.Bearish Reversal Patterns
We may further divide the above categories into further 35 sub-categories.
1. Hammer: Hammer is a single candlestick pattern that is formed at the end of a downtrend and signals bullish reversal. The psychology behind this candle formation is that the prices opened and sellers pushed down the prices.
2. Piercing Pattern: Piercing pattern is multiple candlestick chart pattern that is formed after a downtrend indicating a bullish reversal. It is formed by two candles, the first candle being a bearish candle which indicates the continuation of the downtrend.
3. Bullish Engulfing: It is formed by two candles, the second candlestick engulfing the first candlestick. The first candle is a bearish candle that indicates the continuation of the downtrend.
4. The Morning Star: It is made of 3 candlesticks, first being a bearish candle, second a Doji and the third being a bullish candle.
5. Three White Soldiers: These candlestick charts are made of three long bullish bodies which do not have long shadows and are open within the real body of the previous candle in the pattern.
6. White Marubozu: This candlestick has a long bullish body with no upper or lower shadows which shows that the bulls are exerting buying pressure and the markets may turn bullish. At the formation of this candle, the sellers should be caution and close their shorting position.
7. Three Inside Up: It consists of three candlesticks, the first being a long bearish candle, the second candlestick being a small bullish candle which should be in the range the first candlestick. The third candlestick should be a long bullish candlestick confirming the bullish reversal.
8. Bullish Harami: It consists of two candlestick charts, the first candlestick being a tall bearish candle and second being a small bullish candle which should be in the range of the first candlestick. The first bearish candle shows the continuation of the bearish trend and the second candle shows that the bulls are back in the market.
9. Tweezer Bottom: It consists of two candlesticks, the first one being bearish and the second one being bullish candlestick.
10. Inverted Hammer: In this candlestick, the real body is located at the end and there is a long upper shadow. It is the inverse of the Hammer Candlestick pattern.
11. Three Outside Up: It consists of three candlesticks, the first being a short bearish candle, the second candlestick being a large bullish candle which should cover the first candlestick.
12. On-Neck Pattern: The on neck pattern occurs after a downtrend when a long real bodied bearish candle is followed by a smaller real bodied bullish candle which gaps down on the open but then closes near the prior candle’s close.
13. Bullish Counterattack- This candlestick pattern is a two-bar pattern that appears during a downtrend in the market.
Bearish Candlestick Pattern:
14. Hanging man: The real body of this candle is small and is located at the top with a lower shadow which should be more than the twice of the real body. This candlestick pattern has no or little upper shadow. The psychology behind this candle formation is that the prices opened and seller pushed down the prices.
15. Dark cloud cover: It 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 which opens 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 bearish reversal is going to take place.
16. Bearish Engulfing: 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.
17. The Evening Star: It is made of 3 candlesticks, first being a bullish candle, second a doji and third being a bearish candle.
18. Three Black Crows: These candlesticks are made of three long bearish bodies which do not have long shadows and open within the real body of the previous candle in the pattern.
19. Black Marubozu: This candlestick chart has a long bearish body with no upper or lower shadows which shows that the bears are exerting selling pressure and the markets may turn bearish. At the formation of this candle, the buyers should take caution and close their buying position.
20. Three Inside Down: It consists of three candlesticks, the first being a long bullish candle, the second candlestick being a small bearish which should be in the range the first candlestick. The third candlestick chart should be a long bearish candlestick confirming the bearish reversal. The relationship of the first and second candlestick should be of the bearish Harami candlestick pattern.
21. Bearish Harami: It consists of two candlesticks, the first candlestick being a tall bullish candle and second being a small bearish candle which should be in the range of the first candlestick chart.
22. Shooting Star: Shooting Star is formed at the end of the uptrend and gives bearish reversal signal. In this candlestick chart the real body is located at the end and there is long upper shadow. It is the inverse of the Hanging Man Candlestick pattern.
23. Tweezer Top: 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. When the Tweezer Top candlestick pattern is formed the prior trend is an uptrend. A bullish candlestick is formed which looks like the continuation of the ongoing uptrend. On the next day, the high of the second day’s bearish candle’s high indicates a resistance level. Bulls seem to raise the price upward, but now they are not willing to buy at higher prices.
24. Three Outside Down: It consists of three candlesticks, the first being a short bullish candle, the second candlestick being a large bearish candle which should cover the first candlestick. The third candlestick should be a long bearish candlestick confirming the bearish reversal.
25. Bearish Counterattack– The bearish counterattack candlestick pattern is a bearish reversal pattern that appears during an uptrend in the market. It predicts that the current uptrend in the market will make and the new downtrend will take over the market.
Continuation Candlestick Patterns:
26. Doji: It is formed when both the bulls and bears are fighting to control prices but nobody succeeds in gaining full control of the prices.
27. Spinning Top: The only difference between spinning top and doji is in their formation, the real body of the spinning is larger as compared to Doji.
28. Falling Three Methods: The “falling three methods” is a bearish, five candle continuation pattern which signals an interruption, but not a reversal, of the ongoing downtrend.
29. Rising Three Methods: The “rising three methods” is a bullish, five candle continuation pattern which signals an interruption, but not a reversal, of the ongoing uptrend.
30. Upside Tasuki Gap: 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 chart formed after a gap up. The third candlestick is a bearish candle that closes in the gap formed between these first two bullish candles.
31. Downside Tasuki Gap: This candlestick pattern consists of three candles, the first candlestick is a long-bodied bearish candlestick, and the second candlestick is also a bearish candlestick formed after a gap down. The third candlestick is a bullish candle that closes in the gap formed between these first two bearish candles.
32. Mat-Hold-There can be either bearish or bullish mat hold patterns. A bullish pattern begins with a large bullish candle followed by a gap higher and three smaller candles which move lower.
33. Rising Window-The rising window is a candlestick pattern consisting of two bullish candlesticks with a gap between them. The gap is a space between the high and low of two candlesticks that occurs due to high trading volatility. It is a trend continuation candlestick pattern indicating strong strength of buyers in the market.
34. Falling Window-The falling window is a candlestick pattern that consists of two bearish candlesticks with a gap between them. The gap is a space between the high and low of two candlesticks. it occurs due to high trading volatility. It is a trend continuation candlestick pattern and it is an indication of the strong strength of sellers in the market.
35. High Wave-The high wave candlestick pattern is an indecision pattern that shows the market is neither bullish nor bearish. It mostly occurs at support and resistance levels.
Candlestick Analysis
DYDX - About To Breakout Trend LineSee previous thread for more detailed TA on finding this breakout
How to use swing trading indicatorThis is tutorial on "How to use swing trading indicator " developed by me. Do use and benefit from it.
How to use Volume Bar Breakout and Breakdown IndicatorThis tutorial provides guidance on how to use "Volume bar breakout & breakdown Indicator" Indicator. It explains
When not to take entries
How to setup Stoploss and Target
what timeframe to use for equities and commodities but you can decide as per convenience
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).
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EMA 10 EMA 20 Pin Bar (Rejection Candlestick) StrategyEntry is 4013.39
Exit at 4065.64
Reward:Risk is 2.6R
Reward = 5225 USD
Risk = 2009 USD
Strategy is to enter at closing price of a pin bar (rejection candlestick) when the pin bar wick intersects the EMA 10 and EMA 20 in an uptrend.
Replaying Trade Setups - Market Open Price Reactions When markets open (Tokyo/Hong Kong/London/New York/Sydney) they can have different reactions to price movement.
One of these reactions can be a quick move up to induce traders to go long and then reverse.
This can sometimes be seen as a hammer candle.
This particular trade was placed at the hammer candle close. 1% Stoploss above and 1% take profits increments below.
Stoploss was then moved into profit.
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
Trade using EMA, Pin Bars, Trend Lines, Higher Highs Higher LowsPin Bar Is Present On The H2, H3, and H4 Chart. This is a strong indication of a bull market. When this chart pattern occurs, look to enter long positions.
Trend: Up
Level: EMA 10 Level, EMA 20 Level, Horizontal Level
Signal: Pin Bar
Trade with multiple factors in your favor. In a bull market, look for pin bars, rejection candlesticks, EMA 10 above EMA 20, up trend, and higher highs higher lows.
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.
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
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! ❤️
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.
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
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!
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!❤️
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.
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.
How To Trade Support Resistance Levels with Price Action Signal Wait for a Price Action Signal to form at the following support resistance levels.
EMA 10 Level
EMA 20 Level
Fibonacci Level
Horizontal Level
Set Target at the next support resistance level. Set Stop Loss Below EMA 20 Price and Low Price of Price Action Signal Candlestick. Enter at close price of Price Action Candlestick.
Engulfing Candlestick at Support Resistance Levels
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.
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.
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.
Candlestick Patterns (Harami or Inside Bar) Part 2Harami or Inside Two Candlestick Pattern:
Shows us:
Price is not willing to break beyond the previous bars range. Tug of war between buyers and sellers.
Important point:
Use these patterns in conjunction with support and resistance to trade. Risk management involves: lot size, entry, stop loss and exits.
