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Candlestick Analysis

Ethereum 05/13/21, Mean Reversion studyThis is a really simple (almost too simple) way of predicting the most likely number of candles before a revisit to a certain level, presuming no outside factors increase the required sample of study. I have just tried to predict very specific candle positions and times as well as the bottom, but this is only for the extreme near future (ie, the easiest to predict), past that it becomes harder unless you reduce your precision several factors. This is an ideal situation where there is a clear median that it has clung to, and the standard deviations are very obvious and apparent. Note: I am only counting candle bodies, not wicks. edit: I also made the highlight before the current hour while I was writing this it seems to agree with me so far.
Education
by sofie4
japanese candlesstick pattern (doji)The Doji is a candlestick where the opening and closing prices are the same (or almost the same). It can take many forms; as shown here; depending of what the trading activity was in that period. The Doji candlestick indicates that neither sellers or buyers have gained control, and that price has ended where it began. It is a sign of indecision in the market. Let me show you an example below : In the chart above, you can see different types of the Doji candlestick pattern. This candlestick gives us a clear image about what happened in the market during the specific time period. In this hourly chart above, the formation of the Doji means that buyers and sellers are equal, no one is in control of the market during one hour, which is the time of the Doji candlestick formation. You can't use the Doji alone to make your trading decision, my goal in this first lesson is to help you read charts by being able to identify and understand candlestick patterns formation, so when you see the Doji candlestick pattern for example, you know that during that period of time the market was in an indecision phase and sellers and buyers are equal. This is the most important information that the Doji gives us when it forms in the market.
OANDA:XAUUSDEducation
by tradeplanprofit
The Quarter's Theory (Is Price Action Random & Chaotic?)IS PRICE MOVEMENT RANDOM? No There is a notion that price movement in financial markets is random and chaotic. Quarter theory suggest a clear pattern in price movement, challenging the notion that price movement is random. Quarter theory organizes the daily fluctuations of currency exchange in a systematic orderly manner. Quarters Theory focuses on the 1000 PIP Ranges between the Major Whole Numbers in currency exchange rates and divides these ranges into four equal parts, called Large Quarters. Each 1000 PIP Range contains four Large Quarters and each Large Quarter has exactly 250 PIPs (1000 PIP Range/4 = 250 PIPs). Can you day trade The Quarter Theory? Yes (Look at attached price action on GpbNzd 1 hour chart, between Tokyo end and London end. The 100 PIP Ranges between two whole numbers in currency exchange rates are also divided by The Quarters Theory into four equal parts called Small Quarters. Each 100 PIP Range contains four Small Quarters and each Small Quarter has exactly 25 PIPs (100 PIP Range/4 = 25 PIPs). The numbers that mark the beginning and the end of each Small Quarter are given the name Small Quarter Points. Currency exchange rates fluctuate in orderly series of price moves from one Small Quarter Point to the next, measured in increments of 25 PIPs, in a systematic effort to complete an entire Large Quarter of 250 PIPs. In order to monitor the price behavior of currency exchange rates within the range of each Large Quarter, The Quarters Theory establishes three important price levels within each Large Quarter:– The End of the Hesitation Zone,The Half Point, and The Whole Number preceding a Large Quarter Point (25 PIPs). HESITATION ZONE: The Hesitation Zone is the range of 75 PIPs above or below a Large Quarter Point. The Hesitation Zone is formed by the first three Small Quarters of 25 PIPs of each Large Quarter. The Quarters Theory uses the Hesitation Zone to identify successful or failed Large Quarter Transitions by distinguishing between decisive and indecisive entrance of prices into a new Large Quarter. If prices stay confined within the Hesitation Zone, the End of the Hesitation Zone can prove to be a difficult support or resistance level to overcome and may prevent further progression of prices beyond the range of the Hesitation Zone, leading to price exhaustion and unsuccessful completion of a Large Quarter. Only decisive price moves that target the end of the Hesitation Zone and do not break above (or below) the preceding Large Quarter Point on pullbacks are considered to be an indication of a successful Large Quarter Transition.
Education
by Anbat
Drop-Base-Drop (4-4)One of the four basic patterns that exist in trading, is the Drop-Base-Drop (DBD ) when trading. You now have one of the four of the patterns that exist in trading. Any of your more complex patterns that you’ve read about consist of a series of these patterns. I intentionally chose not to label any of the “classic” technical analysis patterns. One of the more interesting things I’ve noticed from my years of trading is the desire by people to make what should be simple into something very complex. You should see some of the complicated charts I’ve been shown! Now, I mean no disrespect to the traders out there who use multiple Fibonacci-butterfly-overbought/sold-crossing-confluence indicators to trade, provided they are making money. If you are using all of that stuff and NOT making money, perhaps you should simplify your charts! It doesn’t get much simpler than these four basic patterns. The drop-base-drop is the exact opposite of a rally-base-rally, with the only similarity being they both form during trending movements. Whereas a rally-base-rally structure will always form a demand zone in the market, a drop-base-drop will always form a supply zone. Both the drop-base-drop and rally-base-rally supply and demand zones are categorically the same, they both only form when the market is trending and they are zones which if the market returns to should push the price back in the direction of the movement which created the zone. In the image on chart, a drop lower created the supply zone so if the market was to return to this zone it should push the market lower.
Education
by Anbat
1
Rally-Base-Rally (3-4)One of the four basic patterns that exist in trading, is the Rally-Base-Rally (RBR) when trading. You now have one of the four of the patterns that exist in trading. Any of your more complex patterns that you’ve read about consist of a series of these patterns. I intentionally chose not to label any of the “classic” technical analysis patterns. One of the more interesting things I’ve noticed from my years of trading is the desire by people to make what should be simple into something very complex. You should see some of the complicated charts I’ve been shown! Now, I mean no disrespect to the traders out there who use multiple Fibonacci-butterfly-overbought/sold-crossing-confluence indicators to trade, provided they are making money. If you are using all of that stuff and NOT making money, perhaps you should simplify your charts! It doesn’t get much simpler than these four basic patterns. The rally-base-rally is a type of demand zone which forms during an up-move. The name from the market structure which creates the demand zone. In the example on chart, you can see first we have a rally, then a consolidation, and finally another rally which creates the demand zone itself. A rally-base-rally will always from a demand zone, they never create a supply zone.
Education
by Anbat
Drop-Base-Rally (2-4)One of the four basic patterns that exist in trading, is the Drop-Base-Rally (DBR) when trading. You now have one of the four of the patterns that exist in trading. Any of your more complex patterns that you’ve read about consist of a series of these patterns. I intentionally chose not to label any of the “classic” technical analysis patterns. One of the more interesting things I’ve noticed from my years of trading is the desire by people to make what should be simple into something very complex. You should see some of the complicated charts I’ve been shown! Now, I mean no disrespect to the traders out there who use multiple Fibonacci-butterfly-overbought/sold-crossing-confluence indicators to trade, provided they are making money. If you are using all of that stuff and NOT making money, perhaps you should simplify your charts! It doesn’t get much simpler than these four basic patterns
Education
by Anbat
1
Rally-Base-Drop (1-4)One of the four basic patterns that exist in trading, is the Rally-Base-Drop (RBD) when trading. You now have one of the four of the patterns that exist in trading. Any of your more complex patterns that you’ve read about consist of a series of these patterns. I intentionally chose not to label any of the “classic” technical analysis patterns. One of the more interesting things I’ve noticed from my years of trading is the desire by people to make what should be simple into something very complex. You should see some of the complicated charts I’ve been shown! Now, I mean no disrespect to the traders out there who use multiple Fibonacci-butterfly-overbought/sold-crossing-confluence indicators to trade, provided they are making money. If you are using all of that stuff and NOT making money, perhaps you should simplify your charts! It doesn’t get much simpler than these four basic patterns
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!
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Education
by TradingView
37
A-B-C Pattern (Bearish entry 2/5)One of my favorite entry patterns on daily, 4 hour or 1 hr chart pattern (can use on lower time frames too) Example of a bearish 4 hour A-B-C pattern GBPJPY attached chart: Rules: 1) Wait for 0 leg to A leg (bearish trend) then 2) Wait for A leg to B leg (bullish pullback back upwards, but not above A price) then 3) Entry once B leg breaks the low of A leg price, with a stop loss comfortably above entry (4 hr chart, so account for that in stop and lot size). 4) B leg to C leg is daily trend and take profit/ set target leg of this pattern. Example chart had a target of 70 pips on 10 pm to 10 am, three 4 hr candles. *This is highest liquidity and volume 12 hrs per day. 1:3 or 20 pip/60 pip risk reward would have worked great.
Education
by Anbat
3
Break Out Range (Entry Pattern 1/5)One of my favorite day time or scalping entry patterns is the breakout of range pattern on hourly time frame. The best times for any entry patterns occur is in between (end of Tokyo) 10 p.m. to 6 a.m (start of New York) PST/CA times- why? high liquidity and volume. This pattern on attached hourly chart, happened end of Tokyo and start of London a prime time to entry a new trade. This set up could have been from a 1:4 or 2:4 set up of risk reward, depending on your plan and strategy and risk management.
Education
by Anbat
4 Questions To Verify Before Taking A Trade Ask Yourself 4 Questions before taking any new trades? on attached 1 hour chart 1) Pair Traded? GBP/AUD 2) Price Traded? 1.78900 3) Session Traded? LON/NY 4) Time Traded? 6 AM to 7 AM PST *Before Taking any new trades! Also, note on attached hourly Gbp/Aud chart: 1) Bollinger Band- Price is at lower edge of band (or might be oversold?) 2) Volume- Simple volume indicator shows a spike in bullish volume at beginning of New York session 3) Candlestick- Hourly candle from 6 am to 7 am (after NY Stock exchange opened) showed almost 100% buyers being in control of this pair now.
Education
by Anbat
BTC/USD ( May Sideways Ranging PA?)I think that Btc/Usd will be in a sideways range in the month of May, in between 55000.0 to 60000.0 ($5000.0) unless some world CraCra event happens. On weekly and monthly Btc/Usd charts- most of the price action has been in between this range, with one spike to $65000.0 last month. Btc/Usd sellers won last month with price action making a long legged red doji candle (undecided) on April chart and most of the strength, I believe still in sell side. Last couple of years price action has been going almost straight up or 90 degrees, this year (2021) will mostly be a consolation one or sideways so their is some kind of balance placed in Btc/Usd market. Note: I do not trade Btc/Usd, but if you do---- good luck!!!
OANDA:BTCUSDEducation
by Anbat
GbpAud London/NY session order blocks (examples)Example of both a bearish and bullish order block that would have helped you day trading the Gbp/Aud pair on 15 minute time frame. This is a very both a high liquidity and volume four hours of day (last four hours before London session closes). Noted on attached chart is following: 1) 1:3 risk/reward set up on a bearish and bullish trade. If you would have utilized a 12.5 pip stop loss vs possible target of 36+ target. These trades would have lasted around a hour in real time to hit targets. 2) Note: Fib retracement indicator on chart, with a reversal in golden zone of 38% to 62% areas. They can/should be used for both trades for entry areas. 3) Price action on 2nd trade had support right above white line or S1 pivot line, which is another confirming indicator.
Education
by Anbat
Candlestick Language (Need To Understand It)Please look at any 1 hr , 4 hr or higher chart- analysis each candlestick in context with what is to left of that candlestick. What are candlesticks telling you about? 1) volume 2) liquidity 3) pair trading 4) time 5) price 6) session 7) order blocks 8) support and resistance areas 9) What is ADR of any given pair and if day trading- how far has price action went in covering that ADR? * Are wicks short or long? * Are bodies short or long? * How are candlesticks acting around both quarter numbers and round numbers (.000,.250,.375 and .500) * Are candlesticks ranging or trending? Understanding candlestick language is the foundation of trading Forex success.
Education
by Anbat
Order Blocks (How To Use Them In Trading)Definition Of Order Blocks: * An order block is a defined area where buyers or sellers of smart money entered market & moved price away from its price level to a new area of interest. Why Order Blocks: * The market is engineered by smart money by means of creating levels within the market place for them to use at a later date and time. How To Identify Order Blocks: * An order block can be identified by specific candlestick or bar that when viewed in institutional context, can highlight smart money buying and selling. Order Blocks: * Apart from commonly used supply and demand zones, order block are very specific levels that can be refined to lower time frame to exact price levels. Bullish Order Block: * A bullish order block is the last bearish candle prior to the move up. (see chart) Bearish Order Block: * A bearish order block is the last bullish candle prior to the move down. (see chart) Trading With Order Blocks (TIPS): 1) Higher time frame market structure is in focus( I would use 1 hr or higher, attached chart is weekly order blocks). 2) Select an order block with largest body and shortest wicks. 3) When price is retesting an order block expect a price to bounce off at higher of bullish order block or lower of bearish order block, but middle of the order block is the last point of retracement when looking for entries, if price breaks the order block then find another order block. 4) Just like other natural support and resistance, before trading to the actual order block and reverse, most of the time price will fake the reversal then continue to an order block. 5) Stop loss is placed just above bearish order blocks and below bullish order blocks. 6) When major high/low is formed, look for fair value order block in middle of range to enter a trade, price should not retest highest/lowest order block. 7) Use other indicators like Fibonacci, moving averages, support and resistance, pivot points etc... to confirm your trading decision. 8) Always look left on charts to see if current price range is hitting or inside of a previous order block (these levels are important).
Education
by Anbat
15
Candlesticks 101- Engulfing CandlesEngulfing candles: When the real BODY of a candle covers or "engulfs" the entire BODY of the previous candle. Look for these on hourly or higher time frames at pivot points, support or resistance areas, fib retracment areas of 50% to 62% areas for reversals. Look for the follow setups: engulfing, harami or pin bar candlestick patterns if you scalp or day trade at either the high or low of the day, which means either the high or low of the day will be made from 10 pm to 5 am PST/CA ( or before NY open)- then trade in direction indicated by these highly known candlestick patterns.
Education
by Anbat
Candlesticks 101- Long lower wicksLong lower wicks on candles in a downtrend can be a bullish reversal sign. You always need to ask yourself four questions, before getting into any new trade? 1) What pair are you trading? 2) What price is pair at right now? round #, support or resistance, fib ret area, etc... 3) What session is open now or closing? Attached chart was during London/NY overlapping 4 hours- highest liquidity and volume per day. 4) What time is it during session? Start or end of session or during overlap. Attached chart is start of NY session- So, this one hour candle was giving you a huge hint to set up a buy trade, before trade train took off north for rest of session mostly.
Education
by Anbat
1
Candlesticks 101- Long upper wicksOnce you start seeing long upper wicks on candles in an uptrend, that can be a bearish reversal sign. (Sellers taking control). This can happen on all time frames, but over 1 hour time frames would give you more weight in a possible short or long time reversal in trend. You would need to use support and resistance, trend breaks in price action, fib ret to help you with any possible future trades. I like 4hrs and daily long upper wicks on candles to use for reversals in price action.
Education
by Anbat
2
Pennant Pattern On The H4 Chart (2021 April 28 ; 20:00)Trading the Pennant (Symmetrical Triangle). Wait for a close above/below the diagonal level. In this case, wait for a close below diagonal support resistance level. After the close, diagonal support turned resistance. Next, watch for a pin bar to form at the Resistance Line, EMA 10, EMA 20 in a Pull Back. Enter at closing price of the pin bar, break of the pin bar nose with a sell stop order, or 50% Fibonacci Retracement of the pin bar with a sell limit order. Stop Loss is place 5-10 pips above the pin bar tail. Or stop loss is placed above the break out candle. Take Profit is the first point of the trend line. In this case, the take profit level is 0.94906. Pin Bar is date 28 April 2021 time 20:00.
Education
by TradeLive-
IDF Play - Fading a daily inside barSTATEMENT This publication aim to explain as detailed as possible the IDF play strategy. To do so, we will analyse USDCAD chart and the inside bar that was printed on 22-04-2021. RATIONALE Why trading the failure of an inside bar? It's commonly known that retail traders will identify an inside bar as a reversal candle. Institutions and big players know how retail traders play these kind of candles and will most likely fade them. Also, before directly trading this technique, please backtest it through different time period (what could have workd in 2020 might not work anymore in 2021 as it's well known that market behaviour can change) and different currencies (an high strike rate with EURUSD doesn't mean it will work with GPBUSD for example). I would consider it as an edge it win rate is above 60% adn the ratio is in average above 1% ROI. INSIDE BAR What's an inside bar? It is a candle in which the high to low range is smaller than the prior candle; i.e., the high is lower than the previous bar's high, and the low is higher than the previous bar's low . THE PLAY First of all, we identify an inside bar on the daily time frame: In this particular trade, our inside bar can also be identified as a Doji candle (another reversal candle), reinforcing the retail trader's sentiment that we are about to witness a trend reversal (meaning that most of them will be placing an order to go long with a stop loss below the wick of the candle). Additionally, if we check the prior day we notice that price printed an Outside bar (or Engulfing candle), confirming our bias that we are most likely to find opportunities to go short. Next step is to go down to the hourly time frame and look for a significant leven from which we can short. So far in below screenshot we have identify a significant support level where price was rejected 6 times. As we would like to find an opportunity to go short, we need to wait for the price to break through this level. Now, as we have short bias, we need to wait for the price to break through that support level, so we can consider placing an order (sell limit). With 6 touches on the support level, market is telling us that we have a strong level, having saying that, we won't need any further confluence to look for entry after the breakout. After breakout is confirmed (1) and there is no an immediate pullback (few candles between breakout and pullback to significant level) we can place our order (in this case, sell limit). We do not place our stop loss above the latest lower high; we play it safe and place it at 1.25104 (the prior lower high). Take profit is placed at a weekly level we have identified we do believe can represent a valid target. THE RESULT
Education
by cmacquet
2
How to Trade Price Action Daily!Hello Fellow Traders, Here is a Educational Video (How to Trade Impulse/Correction/Impulse) . Key things to Remember: When Trading This Type Of method - You Should Always have an Open mind when it comes to "Where the Market will Finish The correction" The Strongest Levels of Fibonacci is the 61.8 & 38.2 (These Are Generally the levels that the Market Loves to Finish its correction) The Best way to follow This Method is if the following conditions apply. Conditions - 1. Look & Find a Big Impulse On bigger Timeframes (Weekly, Daily or 4Hours) 2. Wait for The Market to Finish its Impulse (You will notice the market starts to move the opposite direction to the original Impulse) 3. Pull Your Fibonacci From The Start Of the Impulse to the End of the Impulse Aka ( From high to low = Sell OR Low to High= Buy) 4. Be Patient and wait for the Market to Reach the Aka Strong Levels (61.8 Or 32.8) OR Which Ever is Better Align With Good Structure! 5. Once you Have a smaller Timeframe break of structure or Momentum Change (You will look for an Entry Based on Market Environment + Structure) 6. Enter Your Trade Preferably of 1hOur Or 4hour Timeframe (whichever has given confirmation mentioned in point 4) 7. Always Use Risk Management / 1% Risk to Trade Entries using this Method 8. Patience is the Key to Success! Let Me know if you have any Questions or Comments Below! Your Support Is Appreciated! Happy Trading & Goodluck! See You in the Next Educational Video! Global Fx Education
Education
by Global_Fx