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Candlestick Analysis

EDUCATION INSIDE BAR FOREX TRADING STRATEGY RULESNormally INSIDE BAR will give us two trade 1. the first trade is to trade at the breaking out 2. the 2nd trade is to trade after the breakout + pull back the first trade normally can quickly take you to 1:1 risk/reward the 2nd trade can give you a higher R/R WHAT IS AN INSIDE BAR? If you are wondering what an inside bar is, then here’s an explanation. - the inside bar is a 2 candlestick formation - the first candlestick that forms may be called the “mother candlestick” - the second candlestick that forms after the “mother candlestick” is engulfed completely within the shadows of the mother candlestick . That second candlestick is called the “inside bar. - the preceding candlestick can be either a bullish or bearish bar ( candlestick ). - the inside bar itself can be bullish or bearish candlestick . WHY INSIDE BARS FORM? Inside bars, when they form show a time period of market consolidation. This market consolidation can be due to: - a time of indecision as traders are figuring out if they are going to buy or sell or not - a period of low trading activity (low trading volume ) - it can also be a time where the bulls and bears of market forces are also almost of equal strength and each really don’t know what direction to take on their trades. Where Do Inside Bars Form? Well, inside bars can form anywhere. But the inside bars that are of significance that many traders take notice of must form on these level(areas) listed below: - support - resistance - pivots - Fibonacci levels - trend line touch areas Its best to only pay attention to inside bars that form in the price levels listed above. INSIDE BAR FOREX TRADING STRATEGY RULES Selling Rules: - the market must be in a downtrend. - when you see an inside bar form, then place a sell stop order anywhere from 2-3 pips below the low of the inside bar . You do that soon as that that inside bar closes. - For Stop loss, place it anywhere from 5-10 pips above the high of the inside bar . Buying Rules: The buying rules for the inside bar trading strategy are just the exact opposite of the selling rules. Here they are: - the market must be in an uptrend. - when you see an inside bar form, then place a buy stop order anywhere from 2-3 pips above the high of the inside bar . You do that soon as that that inside bar closes. - For Stop loss, place it anywhere from 5-10 pips below the low of the inside bar . DISADVANTAGES OF THE INSIDE BAR FOREX TRADING STRATEGY - false breakouts do happen and you will get stopped out as price reverses and hits your stop loss. - avoid trying to use smaller timeframes to trade inside bars, there will be too many “noise” and false signals. ADVANTAGES OF THE INSIDE BAR FOREX TRADING STRATEGY - pure price action trading - if you trail stop your trades to lock in profit as shown in the previous chart above, you can make a lot of profit if the trend is strong. - if you trade using the daily chart , you need only a few minutes each day to check your chart, place your pending order (when you spot an inside bar ) and walk away. Check later during the day to see which pending - - order was activated then cancel the other that was not activated. - its a very easy candlestick pattern to spot, even a housewife who has no prior experience in trading forex can use this system and make money trading forex.
Education
by asdfghjhhg
3
Engulfing Candlestick Pattern : ENGULFING PATTERN is often considered a "reversal pattern", but it is not always so, this model can be considered a simple pause of the major trend. An engulfing pattern is an excellent trading opportunity because it can be easily spotted and the price action indicates a strong and immediate change in direction. In a downtrend, an up candle real body will completely engulf the prior down candle real body (bullish engulfing). In an uptrend a down candle real body will completely engulf the prior up candle real body (bearish engulfing). - A high probability price action approach for trading bullish and bearish Engulfing patterns is to look for the pattern to appear at important support and resistance levels. - The best place for a stop loss order in an Engulfing trade is beyond the Engulfing pattern extreme. This would mean that if the Engulfing setup is bullish, the Stop Loss order should be placed under the lower candlewick of the engulfing candle. If the Engulfing setup is bearish, then the Stop Loss order should be located above the upper candlewick of the engulfing candle. What is the first TARGET : We hope to have been useful! Thank you for your support and trade with care!
Education
by asdfghjhhg
PIN BAR LESSONThe pin bar price action reversal pattern shows that the particular price level was rejected. The indicated bars are a good representation of a pin bar formation. As you already should be aware that although we have all this information, the market still may not obey the rules we set, so at the red highlighted candle, it wasnt a succesful pinbar. Here is how you spot / identify a pinbar : Short Nose Small Body than the entire candle Long Tail/Shadow/Wick The lengthy tail should be showing you the rejected price action direction, meaning your next action will be the opposite of the direction of the lengthy tail.
Education
by TheGreatestMarketAnalyst
Past history candlestick analysis for Hartalega On March 8, 2018, an Inverted Hammer + Bullish Engulfing appeared, signifying a change to the down trend. This is further confirmed by the support line in blue. Stock rallied for roughly a month plus until April 12, where a Hanging Man appeared (Note the Hanging Man is not as potent as a Shooting Star, but it still gives the signal that the bullish trend is coming to an end). The trend then start to change. Stock goes downwards and tumbled, until a bullish engulfing pattern emerges on April 25 - 26. Interestingly, this happened 3 times! Triple bullish engulfing pattern! This also serves as a support line, which supported the price level on June 28 - 29. Stock rallied up and hit a bearish Harami pattern on June 11 - 12, signalling that bull has lost it's momentum. Stock drops and hit the support line where a bullish engulfing pattern appears, and then goes upwards until it hits a Doji on July 2. Market comes to a neutral tone and market is unsure to go up or go down.. in the end it goes downwards. Price could go further down until it hits the support line and change upwards, depending on the candlestick formation at that time. If it goes down it would hit the second support line formed by the inverted hammer. Notice the MACD histogram is showing an upward trend, signifying an uptrend of price.
MYX:HARTAEducation
by antaeusguy
How to enter a trade at the right time! I get asked all the time about trading entries, so here you are, this is my strategy for how I enter trades based on price action, and while price action doesn't tell you the future, it enables you to read what is happening with the most important aspect on any chart, what is the market willing to pay for an instrument, the price! This chart is a daily chart, I use long-term charts to find my levels (support and resistance) and what the trade is doing over a long period which impacts the short period, if you enter using charts lower than 15m, without getting a signal or level from a chart on a higher time frame, you have a high chance of risk and subsequent loss. As this chart shows, we rarely miss trades, because there are so many opportunities to try again, and often lower-risk opportunities than trying to find the top or bottom of a move, this is suicide, we are not market movers, leave that to the hedge funds, banks and pension funds, we make money out of their moves, follow them, don't try to change the market or will it to change, you will lose YOUR money. The Pin bar entry strategy has a high degree of success, it is not a guaranteed trade, they do not exist, but if you research your own charts, on a daily, 4h and 1h timeframe (not lower), you will see them being respected a high degree of the time. The three try rule is my favourite entry, I use it everywhere, do not enter on the first move up or down unless there is a candle pattern that signals the entry, there are many. But once you have your long-term levels on a chart, and price moves back to that level, watch as volume (and confidence) declines, we get lower highs and the probability to enter a trade increases. There are thousands of permutations of these entries, no chart is every the same, no entry without risk, but it's your job to find the highest probability trades with the least amount of risk, if you have any questions or comments, I'd be happy to learn or answer your questions.
Education
by CBMotivation
7
How well do you know your pinbar?Please note : I am self-taught and the information below is just my understanding/thoughts on the topic. I am open to debate in the comments if I have either misjudged something or have missed something altogether. Pinbars I wanted to publish something abit more educational regarding reading of candlesticks.The ‘pinbar’ is a crowd favourite and you don’t have to surf anything chart related for too long before running into a pinbar strategy. While I agree with the premise of it, there is an obvious lack of information out there regarding pinbars & hopefully I can do my bit and clarify some situations in which the pinbar is better used – in my opinion. The chart here illustrates what many will categorize as ‘bearish’ pinbars . The word ‘rejection’ has begun to be thrown around too loosely. The truth of the matter is that some of these pinbars signal ‘relief’ or ‘retracement’ rather than ‘rejection’. While I recognise that there are thousands of other ways the breakdowns may occur, you can definitely relate most breakdowns back to the 4 here in one way or another. While the context (ie location,trend etc) of the pinbar plays a major role, for the purposes of this post, we will put that aside. For example, you see a pinbar form at the top of an up move on the 4hrly and decide to take a short. If I asked you to go down to the hrly and look at its breakdown, would you still short if its makeup was pinbar breakdown A? I wouldn’t as this breakdown signals a pause in the up move before continuation to me. If we were to talk about the order in which I would place the breakdowns for considerations of a short trade, it would be C,D,B,A. This brings me to my next point, the colour of the pinbar you are trading matters. I have read several articles/guides online that either make no mention of the colour of the pinbar, or even say it is not important. Both C & D show a violation of the previously upward move, this signals that it is MORE LIKELY that price moves down rather than continue to the upside – this is pretty much the only edge we need in trading. I urge you to go through your charts and mark down all the 4 hr pinbars you can find at appealing locations (like I said, context matters) & zoom into the 1hr to have a look at their breakdowns to see which ones succeed more often. While I have not fully tested these myself, I can pretty much guarantee with 100% certainty breakdown C will be way more successful than breakdown A. Think about the strategies you can come up with which incorporates pinbars once you apply this info to it. For example, You trade bearish pinbars (red with preferably breakdowns similar to C) that print with the following confluences : In line with the overall trend on your higher timeframe Has retraced to a decent resistance zone (horizontal or sloping) with a Fibonacci level present Overbought readings on your RSI or stoch etc in order to refine it even more (Be cautious with this as with trading I find less is more & too many filters can cause paralysis) Another way of taking advantage of this (and I don’t recommend this) is to trade the green pinbars (similar to setup A) to the UPSIDE if the location it appears in is out in the open & nowhere near any feasible resistance (outside the box, I know) All the above info can be applied to bullish scenarios as well. So remember, take notice of what the breakdown of the pinbar you wish to trade looks like & you will be able to refine your trading in order to take trades that offer the highest probability of success. While I realise this was a rough guide, I hope you have found this helpful. If you did, leave an upvote, & share around so that more traders can avoid using pinbar strategies incorrectly. There is a lot of misinformation going around on the internet as a whole. Like I said initially, these are all thoughts I have had based on logic – so I could be mistaken in some way. Let me know your thoughts.
Education
by J1bsFx
1
Price Action Lesson 6: Shooting Star Candlestick Pattern Def.Shooting Star Candlestick Pattern Definition: When the price highly increases during a day, but decreases to what it was at the beginning of the day or even lower, a considerable bearish retracement is occurred. The candlestick of this price action in the daily time frame is a Shooting Star. The Shooting Star in the daily time frame is a very strong signal for the possibility of more decrease in price during next days. Example: The chart shows the price of Gold in the time frame of 30 minutes. On Sep 08, 2017 the price significantly increased from 1348.80 to 1357.53, then it decreased more, and at the end of the day to it was closed at 1346.07. The corresponding Shooting Star candlestick of this price movement in the daily time frame is also drawn on the chart to better describe the concept.
FX_IDC:XAUUSDEducation
by ForecastCity
1
Price Action Lesson 7: Conditions of a Perfect Shooting StarConditions of a Perfect Shooting Star: Body is short. The height of the candlestick (the difference between high and low price) is tall enough and it's more than the Daily ATR(264). The taller the Candlestick is, the stronger the Shooting Star. The upper shadow (also known as upper wick or tail is the distance between the high price and the close or open price, whichever is higher) should be very tall, over than 75 percent of the Daily ATR(264) is better. The lower shadow (also called bottom wick or tail is the distance between the low price and the close or open price, whichever is lower) is nonexistent or very short. It should be less than 25 percent of the Daily ATR(264). The Shooting Star with the bearish body is stronger than the one with the bullish body. - The picture shows a perfect Shooting Star candlestick . As seen, the height of the candlestick is tall, but the body is very short. Also, the upper shadow is very tall and the lower shadow is very short. The close price is lower than open price, therefore the body of this Shooting Star is bearish , and the strength is very high.
COINBASE:ETHUSDEducation
by ForecastCity
7
Example of a inside bar + false break tradeHere is an example of a profitable trade that closed out today for a 2R gain. I currently have an open order on the USDCHF with a simular setup. See linked idea. The setup consists of the following elements: strong / clear preceding trend consolidation in the form of one or more inside bars a false break out of the consolidation, thus rejecting the counter trend direction place a trade in the direction of the preceding trend In this example the break was a well formed pinbar and I therefore placed a limit entry order at the 50% retracement of the pinbar. Stop was placed above the high of the pinbar. Profit target was placed at two times the distance of the stop, giving a R2R ratio of 2. Target also nicely lined up with the bottom of the consolidation / mother candle of the inside bar pattern. Learn more about my trading at: www.davetromp.net
Education
by dave25981155
1
BTCUSD - Spread the light - EducationalI cleaned up the chart so I can explain few points. I have already traded the dip and I am out. I have noted the short trade price, stop loss price and the target price on the chart (for educational purposes only). If you want further information about this trade, please review the previously published ideas. Here are few points I want to explain: 1. No one can trade the absolute tops and bottoms. You always want to wait for confirmation before you enter a trade and you also want to exit before the trade changes direction and eat your profit. So, you will always enter and exit at different points other than tops and bottoms on the chart. 2. You can define your target prices in different ways. In my opinion, you should always use the same exact method and never change it in the short term. The one used in this trade is very simple. The target is 2 times the distance from trade price to stop loss. In other words, I am willing to lose X to win 2X. I can also trail my stop loss to protect he profit and maybe make more money, but I prefer a simple binary system. 3. All the support levels that I posted in the previous idea were basically to make sure that there is no strong level where the downward movement can be stopped before reaching my target price. I never intended to wait and see if the price will reach any of them. If there were any strong levels of support before the target price, I would not take the trade. You may choose to be riskier in your trading strategy. There are multiple other strategies for position sizing and entry and exit rule and stop loss determination. I would suggest you study some of them and choose one that fits your personality. Now, what is going on with Bitcoin. You can see that there is a bearish engulfing candlestick pattern (marked with the big green and red arrows). There is no typical engulfing pattern when trading Cryptocurrencies basically because they trade 24/7 non-stop and the close of the previous candle is always the open of the next, but this is as close as it can be. The only thing is that there is no good volume behind the bearish candle which makes it weaker in my opinion. Most indicators are useless at this point. Some traders consider stochastic crossing below 50% is further confirmation of the downtrend (and they only enter at this point). At the time being, I am just watching and waiting for the next confluence of signs to enter another trade. On the other hand, there is a possibility of forming head and shoulders pattern (see the green arcs on the chart). Head and shoulders pattern takes at least 1 month to form. Any shorter duration patterns are probably false. In BTC case, if the pattern forms, it will be around 6 weeks which is good. The thing is, you have to wait for a break up above the neckline with very very strong volume ( the volume is really important here). Generally, I prefer to see price closes above 11800 (previous high) in this case before I long. happy trading. I'd love to hear your thoughts on this.
BITFINEX:BTCUSDEducation
by islameissa
How to enter a trade (entry signals) for CTR/BTC price spikeHi all. I've had some PM's about the price spike we had for CTR/BTC over the last 24 hours, given that I did some analysis on this a few days back. I've recorded this vid to provide some context around what you should have been looking for! There's also some time spent on what not to do, which will hopefully be useful for newer traders. Hope it's useful. Let me know any feedback or other things that you would like covered. Cheers and good luck, RJR
CEducation
by DreamsDefined
1
Price Action Lesson 4: Weak hammerWeak hammer: For having successful and steady transactions, Simple detection of market patterns is not enough. But with a deeper look, we should calculate the success possibility of each pattern. One of the determining power Parameters of hammer stick is about Descending or ascending that the body can be. Thus, if the body of hammer is ascending, Possibility of starting an ascendant wave is very high. The opening price of the day, is very important. This price - is the previous day's closing price, in fact it is the price that they had a war at in previous day where buyers and sellers come to equilibrium. So on the day that the Hammer is forming. If buyers can raise prices to the point of closing price of yesterday, and by the end of the day, they keep the price at the top of it, they will be the winners of the war. If we can raise the price above yesterday's closing price, they are not conclusive winners of today’s war, and this war will continue for the next few days. Thus, if the body of hammer is ascending, Possibility of the beginning Ascending wave is very high. But if the body of hammer is Descending, Possibility of the beginning Ascending wave is less. In this case, it is said a weak hammer has made. - The picture shows a hammer candlestick with descending body. . As what can be seen, candle’s height is tall, but it has very short body height. Also Lower Shadow is long, and the upper shadow is very short. . As regards the Closing Price of market is under its Opening Price, therefore the body of this hammer is Descending, and the power is very low. Possibility of the beginning ascending wave is less.
Education
by ForecastCity
14
Invest in yourself before invest your moneyIs buy & hold a strategy for penny stocks? Some says yes, some says no. The answer really depends how skillful the investors are. In this penny stock example, buy and hold is definitely a poor choice. A 30% gain in 171 days VS a 255% gain in 80 days. I pointed out many alert positions. Please move your cursor to the blue spots. These alerts tell you to think about STOP LOSS to protect your PROFIT. You may have to develop some technical analysis skills like below: Left chart Understand candlesticks pattern Spot moving averages crossovers Spot MACD crossover Apply Fibonacci Retracement Draw one or more trend line(s) Right chart Understand candlesticks pattern Check S/R levels Spot Tenkan-sen & Kijun-sen crossovers Check Chikou-span position Check price is under cloud The next step is to develop your mindset: According to a Stanford Research Institute report, 87.5% of our success in life comes from our attitude, with only 12.5% coming from skill. If there were only 50 technical analysis methods in the world, then you learnt only 10 of them. You got only 2.5%, a tiny portion of your success. You attitude then will be a massive action that move you forward. Do you know the power of beliefs? There are many people giving up trading because they cannot handle their negative emotions. I knew you're thinking fear & greed, but you may probably forget some emotions holding you back such as distress, disappointment and discouragement. The more bad news your heard from TV, magazines, and forums, your mind is filled with a lot of negative comments. Why not you go to hang around with positive thinking traders, fully technical analysts in some trading seminars face to face. They will encourage you and sometimes empower you, much better than sharing with your own friends. You must find the way to improve yourself. You must dump the past trading experience in order to absorb professional advice. Do you have the best place to do your chart analysis? I was telling some of my students “Can you not doing your analysis on a dining table; not analyzing & watching TV at the same time; not Facebook messenging while you are doing day-trades?” You need a FOCUS on what you are trading. Some says trading bitcoins can generate a lot of money, then you jump from your boat into their boat with no understandings their structure and foundation. If you lose, then it is your responsible, not others. At last I encourage all of the beginners that we are all riding the waves in the many markets (Forex, shares, crypto, indices, futures, options, etc). Therefore, you are not alone. Do not underestimate the negative emotions sometimes engulf someone's lives. As you are not alone, you are in this tradingview family !! When you make money, share it. Share how you make it win (not by gambling) When you lose money, share it, too. Share how to make it lose (no excuses). Be a responsible generous trader you are, find your peak performance, equip your skills to unleash your momentum to success. The PAST does not equal the FUTURE unless you live there. Thank you for reading. All the best
AEducation
by SoloTraderAU
2
Price Action Lesson 3: Hammer, The first sign of beginning ...Hammer, The first sign of the beginning Ascending wave: Hammer shows that the war between buyers and sellers, at the beginning of the day sellers could create significant reduction in price, with their high investments. But when the price had come to the lowest extent of it, many of buyers have entered with more investments than sellers. And again they could increase the price close to what it was at the beginning of the day or may even more. And at the war that was between buyers and sellers, the buyers have been the winners of the day, and the market is largely in control of them. Thus, the possibility of further price increases in the coming days is enormous. example: picture Shows, currency pair of EUR/USD -0.31% in a 30 minutes time frame. At the beginning, by increasing investments of sellers, the price became to 1.16886 But in this range with the arrival of large buyers to the market and overcome to turnover of shopping on sales transactions, the price increased again. Sellers could increase the selling price due to the amount of demand from buyers. The starting price is may be at 1.17495 but it increased by the end of the day to 1.17578. As what can be seen, after forming Hammer , an Ascending wave started and the Price have increased more.
Education
by ForecastCity
22
Price Action Lesson 2: Conditions of a Perfect Hammer Conditions of a Perfect Hammer: . Body height must be short. . The total height of the candle must be taller than the Daily ATR-264. The taller the candle is, the stronger the Hammer is. . The lower shadow’s length should be very tall. It is better to be over 75 percent of the Daily ATR-264. . The upper shadow does not exist, or if it does, it is very small. It shouldn't be more than 25 percent of the Daily ATR-264. . The hammer that has an ascending body is stronger than the one which has a descending body.
Education
by ForecastCity
13
Hammer Candlestick Pattern DefinitionHammer Candle Stick Definition If there was a large drop in price in the middle of the day, but before the day ended it increased to what it was at the beginning of the day and even more, a significant upward return occurred. The candlestick of this change (move) will be a Hammer in a daily time frame. A Hammer formation on the daily time frame is a very strong indication for probability of increasing price in next days. Example: The picture shows currency pair of EUR/USD in a 30 minute time frame. On Ausust 09, 2017 the price significantly decreased from 1.17495 to 1.16886 or even lower. But after that, it increased rapidly at the end of the day to 1.17578 and then closed. Also in this picture - for better understanding - the Hammer Candlestick in the daily time frame - in the result of changes in a day - is drawn.
Education
by ForecastCity
8