Get started

Candlestick Analysis

How To Trade The J-Hook PatternThe J-Hook Pattern Normally it should be a signal of continuation of the current Trend. – It occurs during an Uptrend; confirmation is required by the candles that follow the Pattern. – The Pattern starts with a rapid increase in the Prices. (1) – Then there is a Candlestick Pattern that gives a bearish signal (So the Traders start to sell). (2) – The prices fall, then reach a level of “indecision”; at the end of this phase of indecision, there should be a Bullish signal. (3) – The prices start to rise and they reach the Previous High (The one formed from the Phase (1) ). If the prices keep rising, going above this High, there should be a new Uptrend in Prices.(4) – If the prices don’t go above the High, the Pattern has failed; in this case the Pattern creates the Double Top Pattern (A pattern from the Technical analysis).
Education
by Anbat
Basic Elliott Wave CycleBefore beginning about patterns in concept, we must remember that there are 3 commandments, stated by R.N Elliott that are imperative to theory: (See attached 4 hour GBPCAD chart for example). Impulse Wave 3 can never be the shortest wave Wave 2 can never retrace beyond the start of Wave 1 Wave 4 can never cross into the same price area as Wave 1 These rules, just like all rules in general, are bent sometimes, so don’t be afraid to think outside the box and question everything. What I would suggest is that when one of these 3 rules are broken, then a review needs to be done for the wave count. Wave Sequence: In a Dominant Trend, progress ultimately takes the form of 5 Waves, which are labeled with numbers; 1,2,3,4,5. Three of these swings, which are 1, 3 and 5, affect the overall direction in favor of the Dominant Trend. These Swings are known as Motive Waves or Impulses. Within the 5 Wave Sequence, the 3 Waves that unfold in favor of the Dominant Trend are separated by 2 counter-trend interruptions, which are labeled as 2 and 4. These Swings represent a temporary interruption of the Impulse Waves, hence why they are called Corrective Waves. Wave Principle states that; a Full Cycle is made up of 8 Swings. The Market moves with 5 Waves in the direction of the Main Trend with 3 Waves against it. Once the Impulsive Phase is complete, then the Trend Corrective Legs unfold and act as a pull-back. Labeled A, B & C.
Education
by Anbat
Trade Smarter Not Harder!!!On this GBPCAD 4 hour chart what do you see? I see largest moves from 2 a.m. to 10 a.m. ( 8 hours) per day. * This is 4th and 5th- 4 hour candle on chart- you could go to hourly to set entries on any trades. You need to ask yourself how can I catch the daily trend and make 40 pips to 80 pips daily on this pair? Break it down, risk management, lot size, etc... If I use 4 hour chart, can I catch the trend with a larger stop loss and higher target, make sure you have a 1:2 or higher risk reward set up. So, could be 20 pip stop vs 40 pip target or higher per trade. If you look at any 4 hour pair, you will notice when they move and do not move- just wait for trend of daily- do not trade side ways (unless you do that). Also, before trades look for four things: 1) right pair 2) right price 3) right session 4) right time * If three or four of above align up, then think of setting up a new trade.
Education
by Anbat
These 4 Reversal Candlestick Patterns (Know Them)Please google, you tube or PDF all of these following FOUR candlestick reversal patterns, so you can win at trading Forex. (look at them on chart too) 1) Harami candlestick pattern- Bearish or a Bullish Harami, the pattern will contain two candles and the second will be smaller than the first. Harami actually means pregnant woman in Japanese, which makes sense when you consider this signal's shape: the second candle is enclosed within the body of the first. You can think of the second candle as the first candle's baby belly! 2) Pinbar candlestick pattern- A pin bar pattern consists of one price bar, typically a candlestick price bar, which represents a sharp reversal and rejection of price. The pin bar reversal as it is sometimes called, is defined by a long tail, the tail is also referred to as a “shadow” or “wick”. The area between open and close of the pin bar is called its “real body”, and pin bars generally have small real bodies in comparison to their long tails. The tail of the pin bar shows the area of price that was rejected, and the implication is that price will continue to move opposite to the direction the tail points. Thus, a bearish pin bar signal is one that has a long upper tail, showing rejection of higher prices with the implication that price will fall in the near-term. A bullish pin bar signal has a long lower tail, showing rejection of lower prices with the implication that price will rise in the near-term. 3) Engulfing candlestick pattern- The engulfing candlestick patterns, bullish or bearish are one of the easiest of candlestick reversal patterns to identify. Because these candlestick patterns are two-candlestick patterns, they are more valid and are often looked upon as reversal patterns. As with any candlestick pattern, the bullish or bearish engulfing pattern takes more priority depending on the time frame that they are formed on. 4) Doji candlestick pattern- A Doji is a candlestick pattern that looks like a cross as the opening price and the closing prices are equal or almost the same. When looked at in isolation, a Doji indicates that neither the buyers nor sellers are gaining – it’s a sign of indecision. There are different types of Doji candlestick patterns, namely the Common Doji, Gravestone Doji, Dragonfly Doji, and Long-Legged Doji. Before acting on any signals, including the Doji candlestick chart pattern, one should always consider other patterns and indicators. All of these can not be traded ALONE, but need other confirmation too trade. Like at supply and demand, in golden zone of fib (50%-62% area), etc...
Education
by Anbat
Basic Market Maker 24 Hour CyclePlease see hourly example chart of Basic Market Maker 24 Hour Cycle: EurChf (1 Hour Chart)*Learn this 24 hour cycle if you scalp or day trade. 1) Tokyo- consultation 2) London- expand the range 3) New York- trend of day *then price action repeats same cycle over and over..just there are different varieties of this cycle- so retailers need to be aware of these changes, on higher time frames of 4 hour, daily, weekly and monthly. On attached one hour chart: You had three chances to sell EurChf during to days Marker Maker cycle, with proper risk management and stop loss. In a downtrend, sell on a previous buy candle (green or blue on chart)- let price action comes to your trade, never chase a trade.
Education
by Anbat
Do You Use A Systematic Approach?Making money with a systematic approach requires obeying the following rules: *See hourly EurCad example chart (can you do that?) • A systematic trading approach, tested on historical data, should be executed with precision and accuracy (if possible, a computer should generate the signals). • Although we concentrate on pattern recognition, candlesticks, and Fibonacci ratios, other tested strategies should work as well. • The portfolio should have 5 to 10 Forex pairs or products that are all analyzed using the same trading approach. • Long and short signals should be allowed. • Each position should be protected with a stop-loss. • The profit target should be known once the position is entered. • Each product should have a historically good trading range. I Use around 100 ADR pairs (now most are GBP and Eur ones) Each trading strategy should perform in real-time trading according to the philosophy behind the trading concept. For example, a long and flat strategy cannot make money in bear market conditions, but it should make money in bull markets. Find your trading edge and follow a plan for every individual trade you make. Mine includes: scalping or day trading on hourly, 4 hourly or daily time frames, trading from end of Tokyo to end of London (high liquidity and volume), setting stop, enter and take profit on all trades (be patient and not greedy).
Education
by Anbat
3
The Curve -watch as Price bounces to set up for a bullish moveThe Curve is a visual representation of Wyckoff method although not designed with Wyckoff in mind it was made over a 9 month period of watching the market and making a ruleset that supports everything I saw in the market. There are 5 stages. Each stage bounces from Bollinger band top to bottom. Except stage 4 which is a continuation of 3 at the midpoint of a curve....usually in Re-accumulation. Price action will hug the upper bb a few candles before dropping to hit the bottom Bollinger Band for stage 5, also called The Spring/Launch. This then goes for a New high if retail is cooperating. it is also the lowest volume part of the curve. In this chart you can see institutional buying setting up to make a very bullish run as it fullfills each stage in just about 5 candles. Why else would it do this if not to full fill each stage and be on stage 5 going to stage 1 for the new high. Of course each stage breaks down into something else in wyckoff method. Which is usually: 1. Buyers Climax 2. Major sign of weakness 3/4. Into Up Thrust After Distribution 5. to Spring or final dip into liquidity Finally back into 1. Which is the free ride up to create a new higher high. All my ideas have the Curve represented or are part of the the analysis regardless if stated or not. It is the fundamental basis of how I trade. As I never looked at any other teachings until 2 months ago when I found wyckoff as I was curious as to what the logical explanation of what I saw was. Thank you. if you like ideas like this or want to see more of these please comment below, like, subscribe, and share. As its the only way I can tell if you are actually into this or not. by iCantw84it 06.08.2021
NASDAQ:PARAEducation
by iCantw84it
How To Trade Triangle CorrectionTriangle Correction: In addition to the 3-wave correction patterns, there is another pattern that appears time and time again. It is called the Triangle pattern. The Elliott Wave Triangle approach is quite different from other triangle studies. The Elliott Triangle is a 5- wave pattern where all the waves cross each other. The five sub-waves of a triangle are designated A, B, C, D, and E in sequence. Triangles are by far most common as fourth waves. One can sometimes see a triangle as the Wave B of a 3-wave correction. Triangles are very tricky and confusing. One must study the pattern very carefully prior to taking action. Prices tend to shoot out of the triangle formation in a swift “thrust.” When triangles occur in Wave 4, the market thrusts out of the triangle in the same direction as Wave 3. When triangles occur in Wave B, the market thrusts out of the triangle in the same directions as the Wave A. How do you trade triangle correction?: You need to place two trend lines- one from b to d sub waves (above PA) and one from a to c to e sub waves (below PA)- In a bullish example (see chart)- once d to e sub wave is completed ( see noted long legged doji on chart)- this would have been your low risk high reward time to initiate a buy trade via daily chart. Within 20 days (do you have the P A T I E N C E ?)- you would have made a 1:6 risk and reward on your investment- which is great.
Education
by Anbat
Persistent Supply or Demand Level In A Trend RotationSupply and Demand Forex – The driving force behind changes in price is supply and demand. When there are more buyers than sellers, the market price will move up. Conversely, when there are more sellers than buyers, the market price will move down. When buyers and sellers are more or less even, the market will range. These simple concepts are very powerful and allow us to analyze naked charts in order to determine where the price is likely to go. Since the current price is determined by past prices, this is a very simple method of technical analysis and a highly successful trading style that makes it possible to identify a specific entry price, and a supply zone or demand zone. Stop-loss and take-profit levels are also easily identifiable. Supply and demand in Forex trading (SD for short) provides a simple no-brainier system that gives good profits. All this without all the complexity of technical indicators, but rather through the interpretation of the bare price action itself. Supply and Demand Forex Analysis The supply and demand concept is timeless. It will always be the simplest, most atomic way of explaining why price changes. This is because the market is the place where sellers and buyers meet to conduct the business of exchanging the product for cash. By understanding the supply and demand concept, it will be very simple to spot SD zones on charts. Although this would be a hindsight observation, it will give us a good hint of where to look for our trades in the future. It is key to understand that the theory of supply and demand Forex trading is based on analyzing and defining zones in the past. These zones determine where should we expect the price to react in the future. How to Identify Demand Zones on Price Charts: To identify a demand zone on a chart, we are looking for a large candle or series of candles in the same direction moving up and away from a ranging price zone. When this occurs, the area underneath the point where the candle breaks through the body of the past two candles is a demand zone. As you can see in the graph. How to Identify Supply Zones on Price Charts: The method for identifying supply zones on charts is similar to identifying demand zones, only reversed. You will be looking for a large candle or series of candles that fall beyond the bodies of the previous two candles in a downward direction. The area above this is a supply zone. At this point, we are looking for a significant move in the direction of the large candle. The stronger the move, the stronger the demand or supply zone is. It also suggests that the price will move in the same direction again when the price returns to this level in the future. We want the price to stay away for a while. If it comes right back, it is not a significant move. In other words, we want the move to be significant in both price and time. We now know where to enter the market and where to set our stop-loss and take-profit
Education
by Anbat
1
How To Trade Daily Doji CandlesticksA doji represents an equilibrium between supply and demand, a tug of war that neither the bulls nor bears are winning. In the case of an uptrend, the bulls have by definition won previous battles because prices have moved higher. Now, the outcome of the latest skirmish is in doubt. After a long downtrend, the opposite is true. The bears have been victorious in previous battles, forcing prices down. Now the bulls have found courage to buy, and the tide may be ready to turn. How I trade daily doji's (rules): 1) Place a news buy (long) or sell (short) order next session or daily candle. 2) Place buy order 1 pip above highest price action of daily doji candle 3) Place sell order 1 pip below lowest price action of daily doji candle 4) Which ever one is hit by the next sessions price action- the other order is turned into a stop loss order. 5) Examples of three buy orders and one sell order on daily EURUSD example chart- with possible pip profits of 30 pips to 130 pips. These dojis occur on every time charts, but I tend to put more weight into using these on 1 hour, 4 hour or higher charts.
Education
by Anbat
How To Trade "W" Pattern5 Tips to trade W reversal patterns: 1) Only trade W’s off the lows 2)Only trade W formations London & NY Session 3)Wait for the second leg stop hunt to the high/low of the day to confirm entry 4) Asian consolidation range should be very well defined 5) Always use proper risk management, if the Risk reward ratio is less than 1:3+ the trade is not worth taking Each day there is a new high and low that is created.Trade the “W” formation reversal pattern at the lows. This is a universal guide to trading W formations on any pair in Forex. This works on all time frames under the daily time frame. We recommend back testing everything we have highlighted in this post for greater clarity of the power you are tapping into! The concept of trading M and W patterns The retail trader masses may be dumb, but they are not that dumb. They will always continue to look for confirmation in order to validate their trades. So, we must understand the reverse psychology behind why the M and W pattern is such an effective reversal strategy. The confirmation the masses use to determine a trend is the creation of higher highs and higher lows in the case of an uptrend.
Education
by Anbat
How To Trade "M" pattern (part 1)5 Tips to trade M reversal patterns: 1) Only trade M’s off the highs or overbought/supply areas. 2) Only trade M & W formations London & NY Session 3) Wait for the second leg stop hunt to the high/low of the day to confirm entry 4) Asian consolidation range should be very well defined 5. Always use proper risk management, if the Risk reward ratio is less than 1:3+ the trade is not worth taking. These patterns occur on all scales and on all time frames. The time frame above is on the 4 hr, here we can clearly see the structure of the different sessions that occur on a daily basis. The best sessions to trade are London Session and New York Session. These sessions will present the best reversal setups. Asian session should be avoided as there is very little movement.
Education
by Anbat
Heikin Ashi Charts vs. Candlestick ChartsFollowing price action is at the core of markets. One glance at a chart can show you a trend, trade idea, or serve as a quick way to check the holdings in your portfolio. Candlestick charts are one of the most popular ways to look at price action. A single candlestick shows the high, low, open, and close for a specific time period. This means that a lot of price information is stored in a single candlestick . However, sometimes, that price information is filled with volatility or chaotic trading. That's where Heikin Ashi charts are most useful - they smooth out the price by showing an average price range rather than the exact measurements. In fact, Heikin Ashi charts were developed in Japan and the word Heikin means “average” in Japanese . For those who invest over long-term horizons or look for sustainable trends, Heikin Ashi charts can be an effective way to smooth out price and show clearer trends. The key to understanding Heikin-Ashi charts is to remember that each bar, whether it's red or green, shows an average price range for a specific time period whereas a candlestick chart shows the exact price levels for that time period. The formula for a Heikin Ashi looks like this: Open = (Previous bar open + previous bar close) / 2 Close = (Open + High + Low + Close) / 4 High = Highest point whether it's the open, high, low or close Low = Lowest point whether it's the open, high, low or close Make sure to test out these two different chart types and have some fun. There is no better way to learn than to compare and contrast the two types of charts as we are doing in this example. Remember, it is also about your personal preference. Do you want to see every granular detail in price action? Or do you want to see an average price of that trading action? This is entirely up to you and the tools are here for you to try. NOTE While Heikin Ashi and other non-standard charts can be useful to analyze markets, they should not be used to backtest strategies or issue trade orders, as their prices are synthetic and do not reflect bid/ask levels at exchanges or brokers. If you need more information to understand why that is, have a look at these publications:  • In the Help Center: Strategy produces unrealistic results on non-standard chart types (Heikin Ashi, Renko, etc.)  • From PineCoders: Backtesting on Non-Standard Charts: Caution! Thanks for reading and please leave any comments or questions if you have them! Comment : P.S. Someone asked how they can select Heikin Ashi. Click the dropdown at the top of your chart where it currently shows either your Candlestick or Line chart options. Then select Heikin Ashi from the dropdown menu.
Editors' picks
Education
by TradingView
15
Bull or bear beat holding +249.2% over a year, in profit in MayAs traders we look to capitalise on all sort of markets, not just parabolic runs. Today we are exploring how to run a long strategy even when the bulls are not in control. WILL POST LAST 50 POSITIONS BELOW We are looking for an strategy that: 1. has been beating buy and hold all year 2. Has a drawdown of max 15% in may 2021 3. Is simple to execute and automate Not all candlestick patterns are created equal, and they do not work on all markets. However they do work in crypto, at least based on experience as they are not tough to identify and speculators tend to react to them. This is why we focused on candles that are not that difficult to identify and are very clear in meaning. The strategy (FULL INSTRUCTIONS): On the 30 min timeframe: We are going to open a position when the candle is a bullish Engulfing We are going to close the position when the candle is bearish Marubozu No stop loss or take profit, these are the only rules we follow, but we follow them a 100% of the time. The results: The strategy brought in 249.17%, beating holding. If you started trading this a year ago with 1 Bitcoin, you would be 2.4917 BTC in profit at the moment. What's even better the max drawdown throughout the year was 22.7% and it was actually in February. During May we were only 11% down at a certain point. This provides a Sortino Ratio of 5.44 which is a stellar mark for these volatile markets. The positions: 31/05/2021 04:30 31/05/2021 14:00 10 hours OP 0.06681 CP 0.068884 +3.1% 29/05/2021 21:30 30/05/2021 19:30 22 hours OP 0.065407 CP 0.067746 +3.58% 29/05/2021 00:30 29/05/2021 18:00 18 hours OP 0.068427 CP 0.066952 -2.16% 28/05/2021 07:30 28/05/2021 14:30 7 hours OP 0.069574 CP 0.069572 -0.00287% 25/05/2021 18:00 27/05/2021 19:30 2 days OP 0.068144 CP 0.071024 +4.23% 24/05/2021 00:30 25/05/2021 03:30 1 day OP 0.061435 CP 0.067043 +9.13% 22/05/2021 22:30 23/05/2021 12:30 14 hours OP 0.062197 CP 0.0581 -6.59% 22/05/2021 11:00 22/05/2021 17:30 7 hours OP 0.064251 CP 0.06059 -5.7% 19/05/2021 22:00 20/05/2021 21:00 23 hours OP 0.066705 CP 0.068997 +3.44% 17/05/2021 23:00 19/05/2021 07:00 1 day OP 0.075193 CP 0.074787 -0.54% 17/05/2021 06:30 17/05/2021 09:30 3 hours OP 0.076593 CP 0.077412 +1.07% 14/05/2021 13:00 15/05/2021 14:30 1 day OP 0.079504 CP 0.078525 -1.23% 13/05/2021 16:30 13/05/2021 23:30 7 hours OP 0.076788 CP 0.074242 -3.32% 12/05/2021 10:30 13/05/2021 15:30 1 day OP 0.075732 CP 0.075619 -0.149% 11/05/2021 06:30 12/05/2021 10:00 1 day OP 0.071125 CP 0.075353 +5.94% 09/05/2021 16:00 10/05/2021 11:00 19 hours OP 0.06759 CP 0.069748 +3.19% 07/05/2021 13:30 09/05/2021 00:30 1 day OP 0.061147 CP 0.065733 +7.5% 05/05/2021 01:30 06/05/2021 23:30 2 days OP 0.061121 CP 0.061832 +1.16% 03/05/2021 00:30 04/05/2021 22:00 2 days OP 0.05225 CP 0.061328 +17.4% 01/05/2021 22:30 02/05/2021 05:30 7 hours OP 0.051064 CP 0.051111 +0.092% 30/04/2021 19:00 01/05/2021 15:00 20 hours OP 0.048829 CP 0.049703 +1.79% 30/04/2021 09:30 30/04/2021 16:00 7 hours OP 0.051113 CP 0.047849 -6.39% 29/04/2021 08:30 30/04/2021 02:30 18 hours OP 0.050351 CP 0.051114 +1.52% 28/04/2021 10:00 29/04/2021 00:30 15 hours OP 0.04799 CP 0.049829 +3.83% 27/04/2021 00:00 27/04/2021 19:30 20 hours OP 0.046896 CP 0.047795 +1.92% 26/04/2021 10:00 26/04/2021 13:00 3 hours OP 0.046466 CP 0.046378 -0.189% 24/04/2021 21:00 25/04/2021 13:30 17 hours OP 0.045035 CP 0.046231 +2.66% 22/04/2021 20:00 24/04/2021 17:00 2 days OP 0.04791 CP 0.044796 -6.5% 19/04/2021 12:00 22/04/2021 18:00 3 days OP 0.039343 CP 0.04728 +20.2% 16/04/2021 10:30 17/04/2021 19:00 1 day OP 0.03943 CP 0.039117 -0.794% 15/04/2021 18:00 16/04/2021 05:00 11 hours OP 0.039286 CP 0.039291 +0.0127% 13/04/2021 17:30 15/04/2021 17:00 2 days OP 0.0363 CP 0.039141 +7.83% 13/04/2021 14:30 13/04/2021 17:00 3 hours OP 0.03575 CP 0.035968 +0.61% 12/04/2021 11:00 12/04/2021 12:30 2 hours OP 0.035761 CP 0.035598 -0.456% 11/04/2021 03:30 12/04/2021 09:30 1 day OP 0.035639 CP 0.035866 +0.637% 10/04/2021 21:00 10/04/2021 23:30 3 hours OP 0.035761 CP 0.035688 -0.204% 08/04/2021 22:30 09/04/2021 13:30 15 hours OP 0.035729 CP 0.035448 -0.786% 08/04/2021 02:00 08/04/2021 18:30 17 hours OP 0.035231 CP 0.035636 NA +1.15% 05/04/2021 05:30 06/04/2021 19:30 2 days OP 0.035409 CP 0.036274 +2.44% 02/04/2021 13:00 04/04/2021 03:00 2 days OP 0.033704 CP 0.035098 +4.14% 01/04/2021 13:30 02/04/2021 04:00 15 hours OP 0.032793 CP 0.033349 +1.7% 30/03/2021 06:30 31/03/2021 22:00 2 days OP 0.03138 CP 0.032743 +4.34% 27/03/2021 09:00 30/03/2021 02:30 3 days OP 0.030822 CP 0.031326 +1.64% 26/03/2021 02:00 27/03/2021 04:00 1 day OP 0.03114 CP 0.030919 -0.71% 25/03/2021 16:00 25/03/2021 20:00 4 hours OP 0.031273 CP 0.030754 -1.66% 23/03/2021 17:30 23/03/2021 20:30 3 hours OP 0.030826 CP 0.03091 +0.272% 20/03/2021 15:30 23/03/2021 00:30 2 days OP 0.031261 CP 0.030839 -1.35% 20/03/2021 00:00 20/03/2021 05:30 6 hours OP 0.031174 CP 0.031295 +0.388% 18/03/2021 18:00 19/03/2021 03:30 10 hours OP 0.030665 CP 0.03087 +0.669% 17/03/2021 07:30 17/03/2021 18:00 11 hours OP 0.031816 CP 0.032216 +1.26%
Education
by CleoFinance
4
The Cycle Parts: Trend PhaseThen, what happens after they consolidate 60 minutes or so, they will start the trend run against their original move. Trend Phase: Once they set the high of the day off of the break, they'll start the channel, and run the trend down for 6-8 hours. If you're going the wrong way, it's a nightmare! It's slow, relentless, and it just keeps going, and going, and going. You think it's going to hold, and you start making up stuff in your head, and seeing things in the charts that aren't there. You start making up reasons to validate why you were wrong instead of understanding the true market structure. After the trend runs 6-8 hours it will go into the low of the day, and the same behavior is seen. They'll make an M at the high, a W at the low. How you can profit from this market cycle? Understanding this cycle gives you a major edge in your trading! Once you can identify it on the chart, taking trades is simple; second nature even. Just initiate short positions once the high is set for the day, or long positions once the low is established. Your stop loss for short trades is placed just outside the dealers grasp, above the high, or for long trades, below the low. If you are correct in your assessment, your stop will rarely be triggered, because the dealer will not move the entire market just to grab your stop loss. You see, if he does, he will allow other traders to exit their trades. How many times have you told yourself that if price comes back on a bad trade you will simply click out? Market makers are aware of this, so they come near previous levels but don’t break them. This is added confirmation that you have obtained an excellent entry! 24 Hour Market Maker Cycle: Find this on all time frames- once you spot different phases - trading will become easier and stops and targets too.
Education
by Anbat
1