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Candlestick Analysis

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
The Cycle Parts: Stop Hunt PhaseLet's say they have 3 trillion dollar in short-holders, and 1 trillion dollars in long-sellers. Guess who's getting punished today? Short-holders. It's simple. It has nothing to do with the 1 hour, 4 hour, which way it's pointed, or which way it's going. It's where the dollar volume is built up that they can do the most damage, and collect the contracts. (See: Chart Example) Stop Hunt Phase: Sometime between 1 am EST and 4 am EST, they'll break out of the Asian range in 3 swipes. They'll quickly change the high of the day, settle in, and work it for 30-90 minutes. This is a two- pronged approach. The reason they use the number three is because we are stubborn. They hit it one time, and we think, "Oh, maybe it's not really going that way. It'll come right back." They hit it a second time, and we think "Oh, I'm missing it!" They hit it a third time and you finally get excited and give in that you were wrong, and switch your direction. Now, you've changed in the wrong direction, which is their first break-out of the Asian channel, to get you to recommit your money the other way. What happens when they break out of the range is they trigger the stops of the weak short-sellers, the people that put their stops on the other side of the Asian range, people who put their stops 7 pips below the candle. That's all garbage...they hit them! They cancel out this volume, and get those traders to recommit their funds long. So, let's say half of the people come back. in, and the 3 trillion dollars has now become 3.5 trillion dollars long. What is the goal for the market makers, now? To get that money! How do they do it? There are a lot of people that trade the ABCD patterns (AB=CD), the Fibonacci extensions: when the market makers make their pullback, they make one more pass toward the high of the day. When they make this pass, people put pending orders right above the high. The job of the market makers is to go to the high, open the spread, trigger the pending orders, and validate all of the patterns that can be found in textbooks. When they fire those pending orders, all of those pattern traders are now stuck. They quickly pull off of the high of the day 25-50 pips, to trap the traders in that cycle, and hold them there.
Education
by Anbat
1
The Cycle Parts: Accumulation PhaseFirst of all, let me ask you, "Have you ever heard of a market maker?" Others will tell you they don't exist in Forex market: that the Forex market is too big to be manipulated. Well, I'm here to tell you otherwise. There is a small elite group of traders that do in fact control how market will play out on any given day. The beauty of what I am about to share with you boils down to this: These manipulations are visible on the chart to the trained eye. Once you see the behaviors and understand what they mean, you will be able to trade like a market maker! Accumulation Phase: At 5 pm EST, the high/low are reset. The price comes in,and the market makers make a quick push up, 15-25 pips. They make a quick pull back down, and then go sideways. They push it again 15-25 pips. Why would they do this? When they push up, you're a buyer, and they sell to you. When they push down, you're a seller, and they'll buy from you. They are accumulating contracts, and building up the volume. Have you ever heard of 1 hour, 4 hour, daily, trade in the direction of the trend? Why doesn't trend following work? It's not about the trend, it's about the money. All the market makers do is wait for the money to build up during the accumulation phase, and see where the contracts are accumulated.
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by Anbat
Which Candlestick Pattterns Work Best with Bitcoin?What is the daily closing price of bitcoin? It doesn’t have one. It is actively quoted 24 hours a day, seven days a week. Most securities have a start and endpoint. Even the euro closes at the weekend, but not bitcoin. “What is the close of bitcoin?” may sound like an odd question, but it is crucial for candlestick analysis. How can you have a bitcoin candlestick with no candle close? Traders have used candlestick charting techniques for literally hundreds of years. We can say they have stood the test of time. Traders continue to use this ancient technique because it works. (If it did not work for them, they certainly would have stopped preferring to display their daily bars as candles long before now.) Know the Candlestick Patterns These patterns work best in bitcoin and, sometimes, better than in other markets. What other candlestick patterns would you add in this list?🧐
BINANCE:BTCUSDEducation
by Berzerk_invest
8
Day Trading With Fibonacci Extension (Buy)Set up on USDCAD 15 minute chart with fib retracement extension tool: 1) Right Pair? Yes- USDCAD 2) Right Price? Yes, Enter at 1.20400 with stop at 1.20300 (10 pips) 3) Right Session? Yes, end of London beginning of London/New York session overlap. This is in the highest liquidity and volume times daily of trading Forex, which is from 10 pm to 10 am PST/USD time or from Tokyo end to London end. 4) Right Time? Yes, both USD and CAD are trading during New York session and London/New York overlapping session . Using a Fib retracement and/or Fib retracement extension is great for setting targets, depending how deep initial retracement or reversal goes back into break out zone. This set up would have been a great trade: 1:3.5 Risk/Reward setup or (10 pips/35 pips). Have patience and let trade work. You can only control when you enter and exit a trade- rest is up to price action.
Education
by Anbat
Day Trading With Fibonacci Extension (Sell)Example of using Fibonacci Extension to day trade with: EurNzd 15 minute time frame today: 1) Right Pair? Yes, EurNzd during both London and London/New York overlapping sessions. (Both Gbp and Eur pairs are great r/t being in session). Have high liquidity and volume. 2) Right Price? Yes, Enter sell at 1.69500 with stop at 1.16950 (15 pip stop). 3) Right Session? Yes, During London session and London/New York overlapping session. 4) Right Time? Yes, after break out of price action and return back into golden zone (38%-62% area) of Fib. retracement area. NOTE: Waiting for the initial break of range or sideways price action and return back into the golden zone of Fib. retracement area gives you one of the safest and best risk and reward set ups in day trading Forex. This one was 1: 2 Risk/Reward setup (15 pip risk/stop/30 pip reward/profit).
Education
by Anbat
What Is A Valid Pin-bar Candlestick?The pin bar candlestick pattern is one of the best candle patterns available and one of the most reliable candlestick reversal formations you can see on the Forex or stock market. The pin-bar candlestick can be seen frequently on Forex charts and the best tradeable pin-bars are usually located at the end of impulse waves, and extend outside of the preceding price action. These are the three conditions or rules to use in verifying a valid trading price action Pin Bar: 1) The price opens and closes within the previous candle 2) The wick is 3 times the length of body 3) The wick must stick out from all other candles ( no candles left of right of this candle) Please see chart example of a valid daily time frame bearish pin bar. thank you. Always use price action #1, risk management when trading. 1:2 risk reward should be minimum set up on any trades or higher..
Education
by Anbat
Trading Basics Part 1:How Candlesticks Work! Hello,Traders! Japanese Candlesticks are thought to have been invented by the Japanese rice traders And then made their way into the West where they were used for stocks, forex and commodity trading. Reading candlesticks is quite easy: the body represents an area that indicates the price distance between the open and close of the candle, while wick’s ends indicate the full magnitude of the movement in-between open and close. Thus, when picking the timeframe for your chart, you are deciding on how much time will be contained between open and close of each candle. If open is below the close, the candle is bullish, and if open is above the close, the candle is bearish, which is usually represented by different colors of the bodies and wicks on the chart, typically, green and red. Some of you might ask me, why am I explaining things that seems to be obvious and self evident, yet my experience of Coaching, paints a different picture, with the candlesticks being undervalued and misunderstood by many, despite them being the staple of technical analysis. In my trading strategy, which is based on multi timeframe top-down technical analysis, we examine multiple timeframes, from 1 week to 1 hour, going from higher to the lower timeframes. Looking for strong levels on weekly and daily and for patterns and confirmations on 4 hour and 1 hour charts. Which means that we are opening 1 week/1 day candle like a Russian doll, finding multiple candles inside the other. We enter the trade only if we are getting the same bias on all timeframes that were of our interest! If you found my post helpful and interesting, please, like comment and subscribe! Thank you!
Education
by TopTradingSignals
26
(How To Trade) Diamond Pattern or ABCD PatternYes, possible 4 obvious trades on hourly chart of GBPNZD on Thursday (two sells and two buys), you need to ask yourself HOW could you have entered these trades with right risk management related to- lot size, entry price, stop loss and target? Diamond Pattern is a harmonic pattern. What do you always need to be aware of is bigger picture, like the following: You should use support and resistance and Fib ret. tool in trading. - What is GBPNZD doing on higher time frames, earlier this week, etc... - What is GBPNZD current ADR? - What pair are you trading? - Any news events that have or will be happening? Noted: on chart two new events that actually were part of revering short term trends. - What is current price? any psychological numbers around current price? triple 000 or 500 numbers on charts? - What are sessions currently open? With GBPNZD on left part of chart is when Sydney is open, so AUD and NZD are being traded - what is price action doing? - What is time in session? you would need to know exact time where currency is being traded: Convert Sydney time to your time, Convert Tokyo time to your time, Convert London time to your time and Convert New York time to your time. Trading Forex is really not difficult, but you need to always with with big banks and not trade against them. You need to be able to understand candlestick language and what each one is telling you in the bigger context of price action. This is all about probabilities and if you employ a certain strategy or edge- how many times out of 100 trades would you win? not gambling!!! Really, look at hourly charts and higher ones of any pair- put in the homework, take notes and be one with Forex- then you will succeed.
Education
by Anbat
BTCUSD - 1dIf you notice that in the previous Bitcoin crash, there was a move during which the bearish move did not go above the previous candlestick, in other words, no previous candlestick broke until a long shadow candle (pin bar) was formed and Then a powerful ascending candlestick broke its previous candlestick and then an ascending movement was formed ... such movements are called micro-channel in price action ... and as you can see, a micro-channel is also formed in this fall. And we must wait for the failure of this micro-channel ...
BITFINEX:BTCUSDEducation
by mohammad_gunner
4
Double Doji Strategy (Set Up example)Double Doji Strategy should be done on hourly, 4 hour or Daily, related to a lot more price action involved with each candlestick. Then break will be sudden and quick, when price action does happen to buy or sell side of doji's. These double dojis do not happen that often, but when they do can be highly profitable set up and high win rate %. Chart is GbpAud is 4 hours and shows a great example of this double doji strategy: Rules: 1) Find two dojis at about the same price on charts (hr, 4 hr or daily) 2) Place an entry price one pip higher and lower then tallest and shortest doji 3) Once price action breaks either way, the other entry line becomes stop loss of trade. 4) The range of high and low of both dojis is doubled for target of trade. Ex: if doji range is like chart 28.4, then target above is 28.4 minimum. Please adjust your lot size and risk management accordingly- when you enter any new trades.
Education
by Anbat
The Hammer Candlestick PatternHammer candles- lower shadow (wick) is at least twice the size as the real body. Hammers are price candle reversals to the upside or bull-side, so a possible buy trade could be traded afterwards. Conservative traders would wait for confirmation candle or next candle to be completed, aggressive traders would trade open of next candle with right risk management. Higher time frame charts are easier to trade, but these hammers occur on all time frames. Look for support and resistance, momentum, pivot points, etc... These hammers will happen at end of downtrends and to the left of these candlesticks no other close price action will be noted, just empty space.
Education
by Anbat
Doji Types: Classic Doji (Part 4 of 4)(Classic) Doji Japanese name: doji Forecast: lack of determination Trend prior to the pattern: N/A Construction: - a doji candle - appears on as a long or short line - candle does not meet requirements to be considered as any of the following doji types: - Long Legged Doji - Dragonfly Doji - Gravestone Doji A doji can occur on any time frames, higher the better and if there are two or more on higher charts, when prices break- they tend to keep trending.
Education
by Anbat
Bitcoin making a Bullish Harami. Identifying Candlesticks.Keeping it very simple today. Big red candle to the left totally enveloping a green candle to the right = Bullish Harami. It's ok that there is a big red candle to the left. That candle needs to be there or else the current green candle wouldn't be what it is (bullish harami). It's relative. ---- Remember: Never take trades off of candlestick identification alone. Combine with other elements. *I have been trying to get off of caffeine lately, ok. Don't get upset because this isn't a challenging lesson.*
Education
by emehoke
Double Doji Strategy (How To Scalp or Day Trade this ?)Sure, you can but as with most trading longer time frames are better. Look on attached 15 minute chart- I see around 3 buy trades after Double Dojis or more appeared at a minor or major support area- for quick scalps and/or a longer day trades. For your convenience here is a summary of the rules: 1) Spot 2 Dojis in a row. it is better when they appear after a clear up or down trend ( minimum of 3 green/blue or red candles in a row). 2) Mark the upper and lower border of these Dojis highs and lows. 3) Wait for one of the borders to break. No need to actually wait, just insert 2 pending orders. 4) When one of the orders executed, cancel the other one. 5) Choose one of the three trade management methods and follow it to the letter. 6) Collect profits. NOTE: Please see my previous posted article, related to using Double Doji Strategy on higher time frames.
Education
by Anbat
Double Doji Strategy (How To Trade)The Doji pattern is one of the most incredible patterns among the Japanese candlesticks. For some reason it is not referred to very often. Maybe that explains why is is extensively used by professionals, not retailers. Only trade this pattern during high liquidity and volume times of session. The Doji hints us that the market is in a state of balance of powers: the buyers strength has run out, but so is the sellers. So this is a state of temporary calmness, just before a major move happens. Note: a hourly or higher candle with a body of under 5 pips is considered a Doji. The Doji may appear in variety of shapes, but the meaning of all of them is the same. The meaning is that the opening and closing price of the candle are the same. Remember that each candle represents a certain amount of time. For example (attached noted chart) is looking at a 1 hour (H 1) chart, each candle represents one hour of market activity. NOTE: this Double Doji Strategy works better on higher time frames: 1 hour, 4 hour and daily. (FYI). RULES: 1) Identify 2 Dojis one after the other. It is preferable that the two Dojis will appear after a clear strong trend, for example an up trend or a downtrend. 2) You should mark the high and low borders of the two Dojis (place lines). As you can see on attached chart, I've marked the upper and lower borders of those two Dojis. Once top or bottom border is crossed, a move is underway so it is time to make a trade. 3) Place 2 pending orders. One if market breaks upper border of Dojis (1 pip above is enough) and one if market breaks the lower border (1 pip below). 4) For a buy (long) trade, place stop loss 1 pip below the Dojis lower border. For a sell (short) trade, place stop loss 1 pip above the Dojis upper border. Now for the cheerful part of determining the profit target, or the amount of profit you expect to extract from this trade: 3 different methods: 1) Take Profit is equal to the stop loss ( attached chart is example of this one) 2) You open 2 identical trades. The first has a stop loss equal to the take profit. The second has a profit target which is double the stop loss. For example: Stop Loss is 50 pips and Take Profit is 100 pips. 3) Open one trade with a profit target which is half the stop loss. Lets say I determined the stop loss to be 50 pips, thus the first target would be 25 pips. This is where I'll close 80% of the trade. The second profit target, would be x2 of the stop loss. Or this example, take profit would be 100 pips.
Education
by Anbat
1
Trend-Pullback-Breakout PrincipleThis T.P.B principle happens on all time frames, but if you are scalping or day trading (using 15 minute, 1 hour or 4 hour charts). Key Principle: Identify the trend. Watch for pullback. Trade the beak out. 1) Trend candle (TC) 2) Pullback candle (PC) 3) Break out candle (BC) The above can happen on 1 candle each or couple or few candles- attach GBPNZD hourly chart is normal price action on hourly price chart, given the right pair, right price, right session and right time- of this possible sell trade with high liquidity and volume. Underlying Principle: Risk cont through stop loss. The noted set up would have given you 1:3 risk/reward set up with 20 pips/60 pips.
Education
by Anbat
1
Eur/Usd versus DXY (U.S. Dollar Index) Index Description: The U.S. Dollar Index is a weighted average of the foreign exchange value of the U.S. dollar against the currencies of the group of major U.S. trading partners. The U.S. Dollar Index is an index of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies. The Index goes up when the U.S. dollar gains "strength" when compared to other currencies. The index is designed, maintained, and published by ICE, with the name "U.S. Dollar Index" a registered trademark. It is a weighted geometric mean of the dollar's value relative to following select currencies: • Euro, 57.6% weight <----------------------- majority of U.S. Dollar index. • Japanese yen 13.6% weight • Pound sterling, 11.9% weight • Canadian dollar, 9.1% weight • Swedish krona, 4.2% weight • Swiss franc 3.6% weight. The Eur/Usd (FX pair) and DXY (U.S. Dollar Index) have a negative correlation related to Euro making up 57.6% of the weight of the DXY (or majority). This last Friday the 14th of May what happened? DXY went down (sell) or lost strength while the EurUsd went up (buy) or gained strength (60 pips possible). Keep in mind while trade Eur/Usd pair, because this is the most traded pair in FX and also, most manipulated pair during London and New York sessions.
Education
by Anbat
Do You Day Trade? (Part 2/2)You need to know that during the 3rd/4 hr candle or from 10:00 pm to 2:00 am (PST/USA)- please convert to your time zone, that most of the time the L.O.D. (low of day) or H.O.D. (high of day) is made, within that 4 hr candle. If you get that right, you can profit with right risk management. There is a high correlation that 11:00 pm to 2:00 am PST/USA that the High or Low being established for the daily session, in the majority of the cases. Attached chart example of GBPJPY 1 hour chart of Thursday, making a H.O.D. during this 3rd/4 hour candle of session, then price action dropping 80 pips. This is why I use Daily, 4 hour and 1 hour mostly when scalping and day trading. Do not fight big banks, if you are scalping or day trading- just jump on their train and go with it for success.
Education
by Anbat
Do You Day Trade? (Part 1/2)You need to know that during the 3rd/4 hr candle or from 10:00 pm to 2:00 am (PST/USA)- please convert to your time zone, that most of the time the L.O.D. (low of day) or H.O.D. (high of day) is made, within that 4 hr candle. If you get that right, you can profit with right risk management. There is a high correlation that 11:00 pm to 2:00 am PST/USA that the High or Low being established for the daily session, in the majority of the cases. Attached chart example of GBPJPY 1 hour chart of Friday, making a L.O.D. during this 3rd/4 hour candle of session, then price action going 50 pips up. This is why I use Daily, 4 hour and 1 hour mostly when scalping and day trading. Do not fight big banks, if you are scalping or day trading- just jump on their train and go with it for success.
Education
by Anbat