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Candlestick Analysis

PRO-GAP Tutorial PRO-GAP Tutorial Today is Monday and GBPAUD formed a PRO-GAP Definition of pro gap is: the gaps' direction is the opposite of the last candle's direction. We can see Last Friday's closing price was 1.6793 and this morning's opening price was 1.6849 which means all the sellers who sold in the last candle were trapped. Therefore a good trading plan was developed: wait for price to pull back and buy it actually pulled back into the last candle's opening price. and it is also a 0.618 level. Buy from 1.6814, SL 1.6790 and the result is almost 7 times Reward/Risk Ratio
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by tntsunrise
20
USDJPY > Simple candlestick signals easy to recognizeEducation > Basic Candlestick Signals Chart > USDJPY > Non-Farm Payroll News Release > Friday, Oct. 6, 2017 - 8:30 A.M. Analysis in chart 1. Large body w/small wicks indicate strength 2. Larger the body w/smaller wicks indicate greater strength 3. Long wick w/body at opposite end of candle indicates shift in trend momentum 4. Wicks at both sides w/smaller body in middle indicates indecisiveness and both sides have equal strength 5. Larger wicks w/smaller body in middle indicates increase of indecisiveness * Personal analysis only. Please use your own rules and strategies prior to entering market. ** Forex trading involves HIGH RISK. Before entering a trade, carefully consider your objectives, financial resources and level of experience.
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by ALSM59
1
EUR/USD - When is a market turning? 4 price action tips!Good chart reading and technical analysis do not have to be complicated. A trader should focus on a few key principles when trying to understand a price chart. In my trading, I have stripped away everything that doesn’t provide value and I have optimized the points on my checklist that I use to read price charts. Below you see the current EUR/USD chart on the Daily timeframe and it offers a great learning opportunity because it shows us that ‘something’ is happening here. Price is/was in a strong uptrend and now things are slowly turning. The amateur/losing trader will make the mistake of jumping in too early because he ‘feels’ that something is happening here but he is too early. Price is NOT yet ready to move lower and it’s too early to jump on the signal. But let’s start at the beginning and let me give you a few key principles that will help you understand trends and consolidations better: 1. Count of bearish vs. bullish candles When you suddenly see that price is showing more bearish candles after an uptrend and the ratio between bullish and bearish candles changes, it can be a first important signal that a trend is losing momentum. 2. Ratio between wicks and bodies During a trend, there are usually smaller wicks and larger bodies as the price keeps trending into the direction of the trend. When candles start to show longer wicks and smaller bodies, something is happening and momentum might be fading. 3. Length of trendwaves When the trendwaves lose strength, they become shorter. Before a market turns, you can often see that the final trendwave is becoming much shorter 4. Support and resistance barriers Once price starts breaking the “higher high / higher low” or “lower high / lower low” sequence that describe healthy trends, you know that something big is happening. When, like in the EUR/USD example, price breaks the blue marked level, price will make the first lower low for the first time in over 4 months. Putting it all together with the previous points, we can then see that the trend is likely going to reverse.
Education
by Tradeciety
5
USDCAD, CLASSIC inside bar tradeIf I'm asked about what is the most interesting part for inside bar trade, my answer is "trailing". 1st kick is only for risk management purpose to make me able to deposit the risk to other trades, the outstanding risk-reward ratio is about the other half of the positions. The other half is very important so I need it to run as much as possible, so I NEVER put sell limit order for the other half of the positions, I would more like to change my out only. With trailing in mind, I never have to worried about whether to sell or not, all I need to do is to wait for pivot to put my out (LH/HL). This inside bar trade is a multi-reason combination itself 1. 1st inside bar after the rate hike (both direction trade) 2. inside bar after new low (short) 3. the more inside bars in a row the better It literally was a MUST trade for all the inside bar traders.
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by Trader_Joe_Lee
AUDUSD Inside 4 hour, outstanding risk-reward ratio!Inside bar setups work the best when there is momentum, and momentum comes from news, fundamental events, chart patterns, short squeezing, and many other ways. The 2 inside 4hr bars for AUD/USD implied great risk-reward ratio! 1st one only 25pips risk and gave an 150 pips move; 2nd one only 10 pips risk and gave an 90 pips move! The larger the time frame, the higher the winning percentage for inside bar trades. While frankly speaking, it's slightly higher than 50% winning percentage only (yes, like toss coins), but the point is it provides a great risk-reward ratio and able to make money even with 50% winning percentage. that's the whole story about inside bar setup.
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by Trader_Joe_Lee
3 Amigos Morning Star Short Trade EURGBP 15 m3 long wicks together is an eye catcher. It helps you start thinking that the market may reverse. Look for other confirmations from resistance levels, ma's, macd and rsi crossover the 0 line. Easy to see and place stop loss. My TP in the US session is 20-30 pips. This trade ran 61 pips. We have many different strategies to learn on our blog and we are constantly coming out with new strategies for traders to learn every week. Visit us below on the website, Twitter or Facebook.
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by Tradingstrategyguides
Over bought Morning Star Pull Back GBPCAD 15 mEveryday you want to watch how the market reacts around 10 am EDT. There is usually an options release that may be being protected. Sometimes the market will do a pull back at that time range. Watch candle patterns, BB, Macd and RSI for possible direction. SL easy to see and place. TP can go to an approaching MA or a set 10 pips or greater. Yellow 20 sma had 28 pips and Blue 40 sma had 44 pips. We have many different strategies to learn on our blog and we are constantly coming out with new strategies for traders to learn every week. Visit us below on the website, Twitter or Facebook.
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by Tradingstrategyguides
#Education Tradingview P&F #BP share chart looking for a breakPoint and Figure Charts (PnF) are another example of a chart type that relies solely on price movements and not time intervals during the creation of the chart. In this way, PnF Charts are similar to Renko, Kagi and Line Break Charts. A basic understanding of PnF Charts is that they are comprised of a series of columns made from either X's or O's. X columns represent rising prices, while columns consisting of O's denote falling prices. Point and Figure Charts were originally popular in the early 1900's before the prominence of computer based charting. They were a way for technical analysts to chart large amounts of data in a short period of time. With the rise of computers, PnF Charts fell out of favor for quite a while. However recently, PnF Charts are once again gaining in popularity. Overall, there is a renewed interest in "noise filtering" charts which focus on price movements alone.
LSE:BP.Education
by RajDhall
Inside bars and how they could help improve your trading Price Action - Inside Bars Hi i would like to run through one of my favorite price action patterns the inside bar which hopefully could help to improve your trading. They are very easy to trade, easy to see and can be very rewarding. They happen in every market and every time frame, although i find it is best to only trade them on the daily and 4hr tf's this is important and much more reliable. They can be used rewardingly as a standalone trading strategy. And for trend continuation/confirmation, position increasing which i use a lot, overcome Indecisiveness, position closing and trend reversals. I'm not going to go in to great detail as there is plenty of reading and places you could learn this pattern in greater detail than i have the time to explain. What is an inside bar and why do they happen An inside bar is basically a two bar/candle pattern comprised of bar A known as the mother bar which precedes bar B the inside bar which will be completely engulfed by bar A depicted in chart. So why do they happen well basically an inside bar tells us that buyers and sellers have been reluctant to push prices above or below the previous candle’s high or low. In a way, inside bars reflect indecision in the markets. When to trade them It is best to trade inside bars in the direction of the trend as a trend continuation pattern but they also represent potential reversals at key support and resistance zones. Here is a chart for the gbpusd that i was working on, granted it's not the best to use as an example but i trade a lot of gu and suppose it highlights even how they can be profitable in difficult trading markets. So i was expecting another push up to my resistance area within the flag before another anticipated down move. Price had a good bounce off the rising support (reversal level) followed by a moment of indecisiveness creating a nice inside bar, Great i can now put a buy order in just above the high of the mother bar with my stop at the low, always allow a couple of pips room if using stop limit orders as to avoid premature buy ins which could reverse. So my buy order is in lets see how it went In this instance there was more indecisiveness followed by another inside bar. I was prematurely triggered in but stayed well within my stop. To avoid this it is best to confirm breakouts on a smaller timeframe 4hr - 2hr where we want price to close above the breakout line and hold without using stop limit orders if you have the time, i didn't. Anyway as you can see price did break up just reaching my target resistance area and i closed this trade +230 pips. As we had another inside bar i was also able to bring my stop up to minimize the risk. So now my long had played out i wanted to get in short. price made an m pattern double top if you wish with an inverted hammer reversal top also with divergence so i got in here with a small stop at our last swing high. Yes i didn't wait for trendline breakout price action was good enough for me to enter for a small risk. Price then went down we had a good looking breakout with trend direction and an inside bar formed. I was already in the trade so i saw this as great chance to either close my short or add to it. And again this one went great for me price broke lower so i was able to stay in the market and increased my position. Hitting my target area for 540 pips + an extra 250 pips thanks to the inside bar. As price continued you can also see there are more inside bar continuations. the following inside bar had a very large mother bar we can still trade these just the same but will need to adjust stops only using a portion of the mother bar where there is some previous support or resistance areas to the left.
Education
by wolfstreetswinger
3
Educational: Pin Bars, False Breakouts, and Leg StartsMartin Pring coined the "Pinnochio Bar." The Pinnochio Bar, or pin bar, tends to offer very reliable reversal signals when identified and traded properly, according to Pring. I'm going to give you an in-depth look at the "pin bar", hopefully shedding light on the incompetence of even the 'trading gurus', because I don't think even Martin Pring understood why the Pin Bar is formed during price action. I've taken a moment to break down multiple timeframes of the same chart, where pin bars were significant reversals. There is actually a technical reason for why this happens, and after understanding, you won't need to guess if the quick movement will hold, nor will you need to wait for confirmation. Without going into mechanics of algorithms and market makers, the simplest reason for why a pin bar occurs, is because the market provides liquidity to test a significant leg start. That's it. That's all you really need to know. In the main chart, I've illustrated the leg down, and the pin bar that was formed to test the leg start of the leg down. What is a leg start? A leg start is the first level of support/resistance that price gains or loses to make a swing high or a swing low. Often with the candle that makes the high or the low, the opposite side of that candle will be a close approximation of where the leg start exists. In a swing high situation, usually the low of the candle that created the high, will become the leg start. The rule of leg starts: Rule #1 Price will almost always be repelled on the first test of a leg start. As price is progressing through legs and levels, that were created on higher time frames, price also progresses to exhaust lower time frame levels and legs. In doing so, pin bars are created because smaller time frames have no levels left to exhaust, thus the market provides liquidity, and a higher time frame leg start gets tested and vice versa. Here is an example of the same exact process on a smaller time frame leg: Most traders don't understand legs, levels, and how they work together, so they notice a knee-jerk reaction, usually to news, and then notice that price moves quickly as news provides liquidity to test an untested leg start, and then quickly reverses. Then the crowd cries that 'news caused the reaction', 'it was a false breakout', or even worse --'they were stop hunting.' These moves are completely predictable. I actually took this trade, and here is the chart that predicted the move:
Education
by UnknownUnicorn461520
6
My Latest AUDJPY Short trade explained #forexNOTE: This trade was published last week exclusively and privately to my followers As you guys requested, i am explaining the rational behind my short audjpy trade, On the left hand side overall view, on the weekly chart, the price was testing the main long term potential resistance area around 86.50. At that area i was monitoring the price for possible rejection as long term resistance and support levels are reliable. At the same time, the RSI was showing overbought conditions.. I was monitoring the price action on the four-hour chart(right hand side chart) for final trigger confirmation. Indeed, the price formed a bearish engulfing candle at that resistance area, meantime, the RSI on the four-hour chart was showing bearish divergence. Accordingly, i got the confirmation and placed my short order at 87.00. Which just reached target in the past hour as you all know. Final result was around 145 pip gain nearly 4.5% return on capital. Hope you enjoyed the ride :D
Education
by Technician
104
My latest Short Term Sell Trade Explained #forex In response for your requests guys to explain the rational behind the live trade we took on GBPCHF. Here is the explanation. On the left hand side daily chart, the price started the bearish behavior on the 78.6 retracement level for the overall bearish wave as shown on chart. As it formed two major bearish shooting star candles. That was not enough for me to initiate the trade so i moved to the lower time frame(4-hour) for the final confirmation. The price has indeed broken back below the prior high at 1.2868 and below the hanging man candle. That was accompanied by bearish divergence on RSI and that assured that the trade is a high probability one. If you were following my updates on the channel, you would know that i put a limit short order as shown on chart. The targets was just reached minutes ago for 157 pips gain. Adding to my account 4.37% gain this month. Best of luck and keep posted.
Education
by Technician
121