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Candlestick Analysis

Trading Candles - Part 15TUTORIAL Today's candle formed a Spinning Top. A Spinning Top is formed by a small real body with supper and lower shadows less than the length of the real body. By itself, a Spinning Top indicates a drifting market. Notice the Spinning Top's real body remains between Support and Resistance. REFRESHER The green Spinning Top that formed three days ago indicated the market a drifting. Based upon a drifting market I placed a Support line off the low of the Spinning Top and a Resistance line off the high. A breakout above the resistance line would then indicate the market is reversing upward and a breakdown below the support line would indicate the continuation of the downward trend. TRADING A breakout above Resistance would setup a Long Trade. A breakdown below Support would setup a Short Trade.
Education
by ForexFloorTrader
EURJPYprices likes to repeats time and time again as you can see both trades are the same but the right being the bigger version look at how price moved up with some strong bullish momentum but as seen with price action this played a roll in catching other out buying when they see candles like that, then what happened next we moved up into a correction followed by a double top or the cup and handle as people say for a sell this is why i love looking at price and this gives us better direction but not all the time i would say an edge within the markets but seeing this helps of course,
Education
by LucasMatthew
Trading Candles - Part 14TUTORIAL Tuesday's candle formed a Doji. A Doji is a candle pattern where the Open and Close are very close together and the candle has both upper and lower shadows. A Doji is a neutral candle and is neither bullish or bearish. The high of a Doji indicates resistance and the low support. As such I draw a horizontal support and resistance line. Notice the Spinning Top and two Doji remains between support and resistance. A breakout above resistance would indicate price is ready to move higher and a breakdown below support would indicate price is ready to move lower. TRADING A close above the resistance line would indicate a Long Trade setup and a close below the support lin would indicate a Short Trade setup.
Education
by ForexFloorTrader
Trading Candles - Part 13TUTORIAL Monday's candle formed a Doji. A Doji is a candle pattern where the Open and Close are very close together and the candle has both upper and lower shadows. A Doji is a neutral candle and is neither bullish or bearish. TRADING When a Doji is in between Support and Resistance I do not make any trade decisions as a Doji is just an indication the market is taking a break before continuing its trend. However, when price is near a support or resistance level the Doji informs me that a reversal is near. When the Doji is near or at resistance I look for the following candle to close below the low of the Doji; this then forms a Short trade setup. When the Doji is near or at support I look for the following candle to close above the high of the Doji; this then forms a Long trade setup.
Education
by ForexFloorTrader
Trading Candles - Part 12TUTORIAL Friday's candle formed a Spinning Top. A Spinning Top is formed by a small real body with supper and lower shadows less than the length of the real body. By itself, a Spinning Top indicates a drifting market. However, this spinning top's lower shadow's low price was equal to the low price of the previous candle forming a Bullish Tweezer. A Bullish Tweezer is a trend reversal indicator. TRADING Trading this market "Long" based upon the Bullish Tweezer candle pattern would indicate a counter-trend trade since the major trend is downward.
Education
by ForexFloorTrader
Trading Candles - Part 11Sorry, this was accidentally published as a Private Idea yesterday, so I am re-publishing it today! TUTORIAL Today's candle was a strong bearish candle. A strong bearish candle opens at the high or very close to the high of the session and closes near its low. A bearish candle would open within 25% of the high of the candles range and close within 25% of the low of the candles range. The percentages shown are for reference only and can vary somewhat. A very strong bearish candle would open at or very close to the high of the sessions range and close at or very close to the low of the candles range. The stronger the candle the more reliable it is as an indicator the market would continue to move lower. Today's candle also made a lower high and a lower low indicating the beginning of a downward trend. Further, today's candle also closed below the low of the previous candles low confirming a downward trend. A strong bearish candle, lower highs and lower lows, and a close below the low of the previous candle all signal this market is ready to move lower. TRADING If I were to trade this candle setup I would place an Entry and Stop Loss as shown on the chart.
Education
by ForexFloorTrader
Trading Candles - Part 10Today's candle was a Neutral candle. A Neutral candle is a candle that closes near the middle of its range. The trading psychology here is the market opened near its high and was able to sell-off. Then the bulls entered the market and pushed the market back upward but were not able to move the market back to the high of the session. It was like a tug-of-war between the bulls and the bears with neither side winning. This action produces a lower shadow that is equal to or nearly equal to the length of the real body. Today's candle looks like and can often be confused with an Engulfing candle because it Engulfs the real body of the previous candle, however, it is not an Engulfing candle. So how would I make a trade decision based upon this candle? To trade this candle I want to see a future candle that shows real bearish strength and closes below the low of today's candle. If I can see that in the next one or two sessions I may be interested in a Short trade. PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Want a second opinion analysis on a pair you are looking to trade? Feel free to send me a private message I enjoy sharing.
Education
by ForexFloorTrader
Trading Candles - Part 9Today's candle formed a bullish Engulfing candle indicating the trend is upward. If I would have entered a Short position based upon Short Entry method number one I would have been stopped out. Recall Short Entry method number one is riskier as price more often moves against the Short position and stops the position out than Short Entry method number two or three. This happens from time to time but not all the time. Staying with Entry method number one and using it constantly can still outperform other methods over the long term. So how do we make trade decisions based upon this candle? The long term direction of this market is still downward, as a result, I will wait for another opportunity to enter a Short position. PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Want a second opinion analysis on a pair you are looking to trade? Feel free to send me a private message I enjoy sharing.
Education
by ForexFloorTrader
Trading Candles - Part 8BPlease read Part 8 for context to Part 8B. I forgot to add the additional methods of entering a Short trade based upon today's candle. Since this is a tutorial I want to provide all the opinions I can think of. Keep in mind this is a tutorial using live trading of the currency pair EURUSD as and example and is not a recommendation to actually place trades on the trading suggestions given. The goal is to provide education on how I place trades and then for each trader to take this information and use as desired in their own trading decisions. So how do we make trade decisions based upon this candle? 2. Short Entry method two - Place a Short trade on the next candles close if it closes below the low of the Doji, this is called a "momentum trade". Note: Short Entry method one explained in Part 8 is riskier than the Short Entry method two explained above, however it provides a better risk to reward. Note2: Short Entry method two explained above is less risky than Short Entry method one explained in Part 8 but comes at the cost of a lower risk to reward. Note3: There is always a trade-off in trading, the old saying "With higher risk comes higher reward", this is true in some cases but with higher risk also comes the risk of the trade turning against your position and Stopping you out! 3. Short Entry method 3 - Place a half position Short Entry based upon method one in Part 8 of this tutorial and then wait for another pullback to enter an additional half position. Note: Short Entry method 3 helps to reduce risk further but also at the cost of still lower reward to risk.
Education
by ForexFloorTrader
SPY - MAGIC SUPPORT/RESISTANCE level - Market will STOP thereHello traders, after Easter, we share another educational video. Today´s topic is focused on drawing support and resistance levels. Many traders draw LINES and they think the market will bounce exactly from that level. The truth is, you can never do that . Instead, it´s better to understand the S/R level as a zone WHERE you can EXPECT some activity. Nobody cares if the market breaks the trend-line by few points. What really matters is if the breakout was respected or not. The example is explained in the AMEX:SPY market, which is very well known but you can use this logic in any market. Have good trading. FINEIGHT team
AMEX:SPYEducation
by Fineight
4
Trading Candles - Part 8Today's candle formed an Engulfing candle. Engulfing candles are reversal candles. In order for an Engulfing candle to be a valid reversal candle, it must occur at a support or resistance level. In the case here the engulfing candle occurred at a resistance level. In addition, today's candle closed below a resistance level indicating a bearish condition. Further today's candle closed below the low of a Doji. A Doji is an indecision candle. To indicate a decision to move higher or lower requires a following candle to either close above the high of the Doji or below its low. A close above the high of the Doji would indicate the price is ready to start moving higher. A close below the low of the Doji would indicate that the price is ready to start moving lower. In our case here the following candle closed below the low of the Doji indicating price is ready to start moving lower. So we have a close below the low of the Doji, a close below the resistance level, and an Engulfing candle all indicating price is ready to move lower. So how do we make trade decisions based upon this candle? If I were to trade this setup I would be placing a Short market order at the close of today's candle and I would place a Stop loss above the high of today's candle. PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Want a second opinion analysis on a pair you are looking to trade? Feel free to send me a private message I enjoy sharing.
Education
by ForexFloorTrader
Trading Candles - Part 7Friday's candle (04102020) was a Doji. A Doji is an indecision candle. Notice this Doji formed at a resistance level confirming the price level at 1.09265 as resistance. So how do we make trade decisions based upon this candle? Before I can make a trade decision based upon this candle I need to see which direction this market is going to move in the future. Will this market breakout above resistance signaling the market wants to continue higher or will this market reverse off the resistance line indicating this market is ready to move lower. PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Want a second opinion analysis on a pair you are looking to trade? Feel free to send me a private message I enjoy sharing.
Education
by ForexFloorTrader
Trading Candles - Part 6Today's candle was a bullish candle, however, it was not a strong bullish candle. A strong bullish candle would have closed at or very close to the high of the session. The wick at the top of the candle indicates some selling pressure. A strong bullish candle would have little to no indication of selling pressure. Notice that today's candle closed very close to the high of the bullish candle of three days ago. Also, notice the upper wick on the candle. This upper wick also indicated there was some selling pressure. The close today near the high of the candle from three days ago confirms there is some resistance at this price level as such I have added a red resistance line. So how do we make trade decisions based upon this candle? Since there is some resistance at 1.09273 and since the major and intermediate-term trends are still down I am not looking to take a long position on this pair. I am waiting for a good opportunity to enter a short position. Click on the above chart to review Part 5 of this tutorial PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Want a second opinion analysis on a pair you are looking to trade? Feel free to send me a private message I enjoy sharing.
Education
by ForexFloorTrader
Watch Out BitcoinWatch Out Bitcoin 10 APR 20 With so many people watching Bitcoin I begin to wonder what it is they’re watching for. Are they only watching today for tomorrow or are they reviewing the past to keep other views open for observation. While action is slow I like to go back and verify previous signals like the gravestone doji we were left with at the end of August 2019. If you’re asking yourself what a gravestone doji is it is a bearish reversal candlestick pattern that is formed when the top stem of the candle is greater than 60% of the candle height and the stem below the body is less than 5% of the body height. The color of the doji candle is irrelevant; it can be either red or green. It is a stronger signal if the gravestone doji is red and at the top of the trend. The opposite of a gravestone doji is a dragonfly doji and often has the opposite effect. We’ll cover that later in more detail another time I’m sure but I’ll add this reminder. It is also a reversal signal. So after seeing the August 2019 gravestone I knew to be aware of the possibility that Bitcoin price could go lower. Then when I saw the next gravestone doji on the weekly ending March 8 I knew I should let up on some of my Bitcoin holding and expect a possible lower entry point. I let go around 7300. We all know what happened next. With the climb Bitcoin has made since then it is easy to gain doubt and want to buy back in before the price really rockets. Did I jump back in around 4k? No. It was no longer a falling knife but it was still spinning and the following direction was in direct contrast to the study. That’s another reason all the other tools I use are so helpful and allow me to take it one day at a time with a clear and open mind concerning the facts I have before me. So which will we see first on the daily chart? Will today’s candle turn into a dragonfly doji or will another gravestone doji confirm the course we are on? I’m keeping my powder dry. If Bitcoin has reversed and heading to $100K it will make little difference if I get in at 4K or 9K as long as I’m not losing either. Happy Trading Everyone. Thank you for letting me shares my Bitcoin Study. I hope it helps you see the path forward in all your trades. Remember. This is not trading advice. It is for Educational Purposes only. Follow me if you wish. I do not use Twitter or Face Book. Please engage the like button and add your comments below.
BITSTAMP:BTCUSDEducation
by Flatratepete
TRADING CANDLES - Part 3Monday's candle (04062020) was a Doji. A Doji is an indecision candle. In this condition, I now need to wait to see it the market will close above the high of the Doji to inform me the market is going higher or close below the low of the market to tell me the market is moving lower. According to Steve Nison, the Japanese say the market is now at a delicate turning period and could go either way. So how do we make trade decisions based upon this candle? Looking at the last two candles I see a bullish candle followed by an indecision candle. At this point, it would be wise to have taken profit on half my position and to have moved my stop loss down to my entry price level. This trading decision guarantees me a profit on this trade no matter what the market does from here. I still have one-half my position open so if this market decides to turn back down I will be able to add to my profit, however, if the market continues higher and stops me out I will have broken even on my open half position. Note: Bringing my Stop Loss to breakeven removes the risk of this trade this now leaves me free to add on an additional position with a different currency pair while keeping my current position open. Click on the above image to review part 2 of this tutorial. PLEASE GIVE ME A THUMBS UP if you agree with this trading tutorial to help me become a TOP AUTHOR. Also please leave a comment on how I can improve the tutorial. Have an analysis Question? Feel free to send my a private message I enjoy sharing!
Education
by ForexFloorTrader
TRADING CANDLES - Part 2Friday's Update 04032020 Today's candle was a small candle with a lower shadow about the same length as the real body of the candle. This candle is considered a very weak bullish candle. It is bullish because the lower shadow indicated buyers were able to move price above the low of the session and to move it back to approximately mid-range. It is also bullish because the size of the body is small indicating a lack of selling interest. It is a weak bullish candle because it is not convincing enough to guarantee the price will start to move higher from current price levels, as a result, there is still a possibility price will continue to move downward towards support on Monday. Having said this we also have to remember this is a Friday candle. Friday's are known to be a low momentum trading day so it is not out of the ordinary for a Friday candle to be small in size. So how do we make trade decisions based upon this candle? Since price has not made it down to or very close to the support price level it is still possible price will continue lower on Monday and/or Tuesday, but what if it doesn't? What if price turns higher starting on Monday, how do we handle this? Here is what I would do: I would take have taken half profit just before the close on Friday or would take profit first thing Monday morning and then I would move my Stop Loss to breakeven. Having done this I have guaranteed a profit on the trade. This leaves one half my position open so if the price moves down to support I can lock in additional profit. However, if the price starts to move back upward and stops me out at breakeven, at least I have an overall profit on the trade. Now there is one other small problem! Usually, when the markets open at the beginning of the new week the spread is still quite large until trading picks up and momentum starts to kick in. So what I would do, if you have the luxury, would be to watch what happens with the market right after the opening on a lower time frame. If the price looks like it wants to move lower then let your profits continue to run. However, if price makes a higher low on a lower time frame then I would take half profit. Note: It is best to take profits or half profits just before the Friday close if we are going to take a profit to avoid the higher spread cost associate with waiting until after the open of the new week before taking a profit. Click on the above image to review part 1 of this tutorial PLEASE LIKE ME, but only if you like this trading tutorial. Also please leave a comment on how I can improve the tutorial.
Education
by ForexFloorTrader
1
TRADING CANDLES - Part 1Currency Pair - EURUSD Time Frame - Daily Scope of Tutorial - This tutorial will help to show how I trade the currency pairs using candlestick analysis. Part 1 - On March 30th EURUSD made a Piercing candle. A Piercing candle is similar to a Harami with the difference being the candle closed past the 50% mark of the previous candles' real body. A Piercing candle is a trend reversal indicator. The only time a market would reverse direction is at a support or resistance level. In the case here the Piercing candle is indicating a resistance level, therefore, I have added a resistance line to the high of the green candle proceeding the Piercing candle. The next candle looks like a Hammer or a Dragonfly Doji. A Hammer candle is a bullish candle as it closes very close to the high of the session. A Hammer also has a lower shadow that is at least twice the length of its real body. The long lower shadow indicates the market was rejecting lower prices during the session. The problem is that the market normally starts rejecting lower prices once it is oversold. However, in its current location, this candle is not in an oversold price level as the downward trend is just getting started. As a result, I do not look at this candle as a Hammer but as a Dragonfly Doji. As a Doji, the Dragonfly Doji indicates a pause in the market. When a Doji appears during a trend it indicates a pause in trading but does not indicate a possible reversal ahead. Again, the only time when a Doji could indicate a possible change in the market direction ahead is when the market is over-extended. When a Doji occurs early in a new trend or during a period of increasing momentum it simply means the market is taking a break before continuing its main direction. As a result, this candle is of no concern and the main trend is expected to continue in future sessions. The next candle is a Neutral candle. A Neutral candle identifies a session that closes midway between its high and low price of the session. Similar to a Doji candle that forms early in a trend the Neutral candle also indicates a pause in the market. Again, this candle is of no concern and the main trend is expected to continue in future sessions. The last candle of the day is a strong bearish candle closing below mid-range. A strong bearish candle is an indication this market is still heading downward. HOW TO TRADE EURUSD - There are two ways to trade this analysis. One way would be to a Short Momentum trade. A Short Momentum trade would be entered when the Low of the Piercing candle is taken out. A second way would be to wait for a Close below the Low of the Piercing candle occurs by the following candle. The momentum trade is a little riskier but the reward to risk ratio is better. The Close below the Low of the Piercing candle is less risky but comes at a lower reward to risk ratio. The old saying, "With higher risk comes the possibility of higher reward" applies here. The Stop loss is placed above the resistance level and the price target is set at Support. PLEASE LIKE ME, but only if you like this trading tutorial. Also please leave a comment on how I can improve the tutorial.
Education
by ForexFloorTrader
3
Monday Was a Classic ‘False Breakdown’ in the S&P 500False breakdowns and false breakouts can be some of the most powerful reversal patterns in the market. We saw the start of one last Friday, when the S&P 500 closed below the key 2347 low from December 2018. Many traders had been watching that line in the sand as key support since the selloff began weeks ago. The bears managed to score some early victories with a big limit down on Sunday night. But then the Fed unloaded a bazooka full of cash and the sellers couldn’t push prices any lower. Unlike other limit-down moves, this time the regular session had no follow-through below the overnight price action. That was the first sign things were different. The second sign – and real signal – came first thing the next morning when SPX ripped above 2347 and never looked back. That erased the significance of the breakdown and confirmed the key support line. The candle’s long tail also created another potentially bullish reversal pattern: a hammer candlestick. In conclusion, support and resistance lines are always important but the stage of the move can matter more. The initial breakdown under 3200 on February 25 was a big deal because it confirmed the beginning of a trend. But after four weeks of vicious downside, SPX’s failed violation of 2347 could mark the end of its current decline.
SP:SPXEducation
by TradeStation
1
200 EMA - best use for entries!I don't use indicators, they're not my style, they lag, they repaint; and in my opinion they don't work. The 200 EMA on DAILY can be useful because of how slow it is. We can use it to filter the direction of which way we trade. Price ABOVE 200 ema = ONLY BUY Price BELOW 200 ema = ONLY SELL Then drop timeframes for your entries via your strategy whatever that may be. If your strategy says go long but price is below EMA, don't take the trade etc... Ignore the EMA on other timeframes lower than the daily. You want a slow daily direction indicator. Don't blindly trade this, wait until price is clearly past the EMA and maintaining a good distance from it. Use it as a guideline if you struggle working out fundamentals to help you filter a direction to trade. NOT TO REPLACE FUNDAMENTAL ANALYSIS!!!
Education
by joebrownFX
GBPNZD SUPPORTThis is a good example of using support to your advantage when trading. If you look at the two highlighted areas at support price created bullish engulfing candles. It was a matter of time before price was going to take off. Finally price slow down giving some consolidation this could be a potential entry for a buy. Been able to secured an overall of 160 pips with only risking 30 pips. This is just an example of how you can support or resistance and candlestick structures when you maybe unsure about a trade.
Education
by pliger4
(Educational) Trade Management Life Cycle using ETHUSD In this video I cover some of the techniques I use for trade management. I rarely post about how I specifically manage trades. Enjoy! *Side notes* -2% of 10,000 is $200. I said $2,000 but then corrected myself :) -I stated I have probably haven't lost more than 5 consecutive trades. Honestly, I probably have but it has been a while. Due to my defensive trading nature it's more likely I would take a string of losses and break-evens, but rarely a large string of straight losses.
BINANCE:ETHUSDEducation
by krugman87