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Candlestick Analysis

Litecoin on the Verge of a Breakout: Are You Ready for a Rally?Hello, Traders! After reaching a local high last month, Litecoin entered a correction phase but is now showing signs of recovery. A few days ago, LTC came close to retesting its previous local high before undergoing a minor pullback. Currently, it appears that LTC has found strong support in the $95-$100 range, forming a local bottom. I don’t expect the price to dip below this area. On the upside, there’s a clear resistance zone in the $135-$145 range, which has been tested twice but not yet broken. The price action suggests that Litecoin is building momentum for a breakout above this level. If this breakout occurs, it could serve as a catalyst for a parabolic rally. In such a scenario, the next target will likely be the $200 price level, which aligns with the psychological round number. Beyond $200, further upside targets could emerge depending on market conditions, particularly if broader market sentiment remains bullish. Traders should watch for confirmation of the breakout above $145, accompanied by strong volume, as this will increase the likelihood of sustained upward movement Please don’t forget to boost this idea and leave your comments below.
BINANCE:LTCUSD.P
by Real_CryptoRoy
Gold is expected to hit the 2740-2750 zone, buy gold!Dear traders: Although gold shows the characteristics of non-continuation of rising, it is still in an upward structure as a whole, so gold still has the potential to continue to rise, so I think 2725 is definitely not the highest point. At present, gold is in an upward trend, and the 2695-2690 zone below forms an unignorable support structure, while the 2680 below becomes the absolute defense of the bulls, and gold may continue to the 2740-2750 zone in the upward trend. Therefore, in short-term trading, we still mainly use the support area as a defense to go long on gold. Bros, are you optimistic about the continued rise of gold? If you want to learn more detailed trading ideas and get more trading signals, you can choose to join the channel at the bottom of the article to make trading no longer difficult and make making money a pleasure!
OANDA:XAUUSDLong
by Trader_Marvin
Made in England.. FTSE 100 Triangle BreakoutFinally the long term triangle pattern in blue chip UK stocks has broken - and the weekly chart for the FTSE 100 index is looking very positive. The breakout weekly candle is a long one with a close right near the highs - showing bulls are well in control of the market. We can see the triangle break in more granular detail on the daily chart with the break confirmed on Thursday and a strong follow-through move on Friday. Support is found first at the former all time high (8450-8475) then back at the broken trendline from the triangle pattern. These support levels define our risk - the price back inside the triangle will inform us the breakout has failed - this time at least. But if things move as we expect, using the height of the triangle pattern as a price objective from the breakout point, the UK 100 could reach 9,000. But - as always - that’s just how the team and I are seeing things, what do you think? Share your ideas with us - OR - send us a request! Comments welcome :) cheers! Jasper The material provided in this article is for information purposes only and should not be understood as trading or investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Trading Writers and has not been prepared in accordance with the legal requirements designed to promote investment research independence. If you rely on the information on this page, then you do so entirely at your own risk.
TVC:UKXLong
by jasperlawler
How Can You Trade with an Inverted Hammer Pattern?How Can You Trade with an Inverted Hammer Pattern? In trading, patterns are powerful tools, allowing traders to anticipate changes in trend direction. One such pattern is the inverted hammer, a formation often seen as a bullish signal following a downtrend. Recognising this pattern and understanding its implications can be crucial for traders looking to spot reversal opportunities. In this article, we will explore the meaning of inverted hammer candlestick, how to identify it on a price chart, and how traders can incorporate it into their trading strategies. What Is an Inverted Hammer? An inverted hammer is a candlestick pattern that appears at the end of a downtrend, typically signalling a potential bullish reversal. It has a distinct shape, with a small body at the lower end of the candle and a long upper wick that is at least twice the size of the body. This structure suggests that although sellers initially dominated, buyers stepped in, pushing prices higher before closing near the opening level. While the inverted hammer alone does not confirm a reversal, it’s often considered a sign of a possible trend change when followed by a bullish move on subsequent candles. The pattern can have any colour so that you can find a red inverted hammer candlestick or upside down green hammer. Although both will signal a bullish reversal, an inverted green hammer candle is believed to provide a stronger signal, reflecting the strength of bulls. One of the unique features of this pattern is that traders can apply it to various financial instruments, such as stocks, cryptocurrencies*, ETFs, indices, and forex, across different timeframes. To test strategies with an inverted hammer formation, head over to FXOpen and enjoy CFD trading in over 700 markets. Hammer vs Inverted Hammer The hammer and inverted hammer are both single-candle patterns that appear in downtrends and signal potential bullish reversals, but they have distinct formations and implications: - Hammer: The reversal hammer candle has a small body at the top with a long lower wick, indicating that buyers pushed prices back up after a period of selling pressure. This pattern shows that sellers were initially strong, but buyers regained control, potentially signalling a reversal. - Inverted Hammer: The inverted hammer, by contrast, has a small body at the bottom with a long upper wick. This structure indicates initial buying pressure, but sellers prevented a complete takeover. This pattern suggests that buyers may soon regain strength, hinting at a possible trend reversal. Both patterns signal possible bullish sentiment, but while the green or red hammer candlestick focuses on buyer strength after selling, the inverted hammer suggests buyer interest in an overall bearish context, needing further confirmation for a trend shift. How Traders Identify the Inverted Hammer Candlestick in Charts Although the inverted hammer is easy to recognise, there are some rules traders follow to increase the reliability of the reversal signal it provides. Step 1: Identify the Pattern in a Downtrend - Traders ensure the market is in a downtrend, as the inverted hammer is only significant when it appears after a period of sustained selling pressure. - Then, they look for a candlestick with a small body at the lower end and a long upper wick that’s at least twice the size of the body. This upper shadow shows initial buying pressure followed by selling, suggesting a potential reversal in sentiment. Step 2: Choose Appropriate Timeframes - The pattern can be seen across various timeframes, but daily and hourly charts are particularly popular for identifying it due to their balance of signals and reliability. - Higher timeframes charts generally provide more reliable patterns, while shorter timeframes, like 5 or 15-minute charts, might lead to more false signals. Step 3: Use Indicators to Strengthen Identification - Volume: A rise in bullish trading volume after the inverted hammer can indicate stronger interest from buyers, increasing the likelihood of a trend reversal. - Oscillators: Oscillators like Stochastic, Awesome Oscillator, or RSI showing an oversold reading alongside the candle can further suggest that the asset might be due for a reversal. Step 4: Look for Confirmation Signals - Gap-Up Opening: A gap-up opening in the next trading session indicates buyers stepping in, giving further weight to the bullish reversal. - Bullish Candle: Following the inverted hammer with a strong bullish candle confirms that buying pressure has continued. This is a key signal that a trend reversal may be underway. By following these steps and waiting for confirmation signals, traders can increase the reliability of the inverted hammer’s signals. Trading the Inverted Hammer Candlestick Pattern Trading the inverted hammer involves implementing a systematic approach to capitalise on potential bullish reversals. Here are some steps traders may consider when trading: - Identify the Inverted Hammer: Spot the setup on a price chart by following the rules discussed earlier. - Assess the Context: Analyse the broader market context and consider the pattern's location within the prevailing trend. Look for support levels, trendlines, or other significant price areas that could strengthen the reversal signal. - Set an Entry: Candlestick patterns don’t provide accurate entry and exit points as chart patterns or some indicators do. However, traders can consider some general rules. Usually, traders wait for at least several candles to be formed upwards after the pattern is formed. - Set Stop Loss and Take Profit Levels: The theory states that traders use a stop-loss order to limit potential losses if the trade doesn't go as anticipated. It may be placed below the low of the candlestick or based on a risk-reward ratio. The take-profit target might be placed at the next resistance level. Inverted Hammer Candlestick: Live Market Example The trader looks for a bullish inverted hammer on the USDJPY chart. After a subsequent downtrend, the inverted hammer provides a buying opportunity that aligns with the support level. They enter the market at the close of the inverted hammer candle and place a stop loss below the support level. Their take-profit target is at the next resistance level. A trader could implement a more conservative approach and wait for at least a few candles to form in the uptrend direction. However, as the pattern was formed at the 5-minute chart, a trader could lose a trading opportunity or enter the market with a poor risk-reward ratio. Advantages and Limitations of Using the Inverted Hammer The inverted hammer has its strengths and limitations. Here’s a closer look: Advantages - Simple to Identify: The pattern is easy to recognise on charts due to its unique shape, making it accessible for traders at all experience levels. - Can Be Spot in Different Markets: The candle can be found on charts of different assets across all timeframes. - Straightforward Trading Approach: It offers a straightforward signal that can be incorporated into broader trading strategies, especially with confirmation signals. Limitations - Reliability Depends on Confirmation: The candle alone does not guarantee a market reversal; it requires confirmation from the next candlestick or other indicators. Without this, the reversal signal may be weak. - Works Only in Strong Downtrends: The pattern might be more effective in strong downtrends; in ranging or weak trends, it generates less reliable signals. - False Signals Can Occur: False signals are possible, especially in volatile markets. Over-reliance on this pattern without additional analysis may lead to poor trade outcomes. Final Thoughts While the inverted hammer can provide valuable insights into potential trend reversals, it should not be the sole basis for trading decisions. It is important to supplement analysis with other technical indicators and tools to strengthen the overall trading strategy. Furthermore, effective risk management strategies are crucial while trading the setup. Setting appropriate stop-loss orders to limit potential losses and implementing proper position sizing techniques can help potentially mitigate risks and protect trading capital. If you are ready to develop your trading strategy, open an FXOpen account today to trade in over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50. Good luck! FAQ Is an Inverted Hammer Bullish? Yes, it is considered a bullish reversal pattern. It indicates a potential shift from a downtrend to an uptrend in the market. While it may seem counterintuitive due to its name, the setup suggests that buying pressure has overcome selling pressure and that bulls are gaining strength. How Do You Trade an Inverted Hammer? To trade an inverted hammer, traders wait for confirmation in the next session, such as a gap-up or strong bullish candle. They usually enter a buy position with a stop-loss below the low of the pattern to potentially manage risk and a take-profit level at the closest resistance level. Is the Inverted Hammer a Trend Reversal Signal? It is generally considered a potential trend reversal signal. An inverted hammer in a downtrend suggests a shift in market sentiment from bearish to bullish. An inverted hammer in an uptrend does not signify anything. What Happens After a Reverse Hammer Candlestick? After a reverse (or inverted) hammer candle, there may be a potential bullish reversal if confirmed by a strong bullish candle in the next session. However, without confirmation, the pattern alone does not guarantee a trend change. How Do You Trade an Inverted Hammer Candlestick in an Uptrend? In an uptrend, an inverted hammer isn’t generally considered significant because it’s primarily a reversal signal in a downtrend. Are Inverted Hammer and Shooting Star the Same? No, the inverted hammer and shooting star look similar but occur in opposite trends; the former appears in a downtrend as a bullish reversal signal, while the latter appears in an uptrend as a bearish reversal signal. What Is the Difference Between a Hanging Man and an Inverted Hammer? The hanging man and inverted hammer differ in both appearance and context. The former appears at the end of an uptrend as a bearish signal and has a small body and a long lower shadow, while the latter appears at the end of a downtrend as a bullish signal and has a small body and a long upper shadow. What Is the Difference Between a Red and Green Inverted Hammer? A green (bullish) inverted hammer candlestick closes higher than its opening price, indicating a stronger bullish sentiment. A red (bearish) inverted hammer candlestick closes lower than its opening, which might indicate less buying strength, but both colours can signal a reversal if followed by confirmation. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
Moustafa! US 30 towards 43320* Broke the downtrend line on the 1h and 4h time frames * It is absolutely ok still to go bullish as long it is above the purple uptrend line and under the yellow uptrend line which was broken before. Note: My ideas are exclusive to myself only and is not regarded as an advice for traders or investors and are not more than personal thoughts which I just wanted to share with you all and I do hope they could help. I am not selling any signals and I do not take money favour any trades recommendations. They are free of charge all lifelong but I keep the copy rights of them though to not be copied or shared or sold.
FX:US30Long
by moustafa_marei
5
USD/CAD: Market Turns – Reversal in MotionWelcome back! Let me know your thoughts in the comments! ** USDCAD Analysis ! We recommend that you keep this pair on your watchlist and enter when the entry criteria of your strategy is met. Please support this idea with a LIKE and COMMENT if you find it useful and Click "Follow" on our profile if you'd like these trade ideas delivered straight to your email in the future. Thanks for your continued support! Welcome back! Let me know your thoughts in the comments!
Short
by OGT_Forex
Jyoti CNC Trying to make a comeback. Jyoti CNC Automation Ltd. engages in the provision of manufacturing solutions for computerized machine cutting tools. It operates under the Within India and Outside India geographical segments. Jyoti CNC Automation Ltd. CMP is 1273.05. The Positive aspects of the company are Company with Low Debt, Company able to generate Net Cash - Improving Net Cash Flow for last 2 years and Companies with rising net profit margins. The Negative aspects of the company are extremely high Valuation (P.E. = 105.5), High promoter stock pledges, Increasing Trend in Non-Core Income and Companies with growing costs YoY for long term projects. Entry can be taken after closing above 1293Targets in the stock will be 1337, 1368 and 1406. The long-term target in the stock will be 1434, 1463 and 1513. Stop loss in the stock should be maintained at Closing below 1157 or 1079 depending on your risk taking ability. Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. We do not guarantee any success in highly volatile market or otherwise. Stock market investment is subject to market risks which include global and regional risks. I or my clients might have positions in the stocks that we mention in our posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.
NSE:JYOTICNCLong
by Happy_Candles_Investment
Persistent can be persisted withPersistent Systems Ltd. is a technology services company. It engages in delivering digital business acceleration, enterprise modernization, and next generation product engineering services. The firm operates through the following segments: Banking, Financial Services & Insurance, Healthcare & Life Sciences, and Technology Companies & Emerging Verticals. Persistent Systems Ltd. CMP is 6090.90. The Positive aspects of the company are Company with Low Debt, Company with Zero Promoter Pledge, Stocks Outperforming their Industry Price Change in the Quarter and Company able to generate Net Cash - Improving Net Cash Flow for last 2 years. The Negative aspects of the company are high Valuation (P.E. = 77), Companies with growing costs YoY for long term projects and MFs decreased their shareholding last quarter. Entry can be taken after closing above 6094 Targets in the stock will be 6241, 6392 and 6547. The long-term target in the stock will be 6704 and 6810. Stop loss in the stock should be maintained at Closing below 5850 or 5566 depending on your risk taking ability. Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. We do not guarantee any success in highly volatile market or otherwise. Stock market investment is subject to market risks which include global and regional risks. I or my clients might have positions in the stocks that we mention in our posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.
NSE:PERSISTENTLong
by Happy_Candles_Investment
Good Closing by Nifty just above Mother Line. Nifty today did well to close just above Mother line of hourly chart. The closing we got was at 23344 and 50 EMA or the Mother line is at 23330. This bring the hope of recover towards 23.5K and further towards 24K+ levels in the medium to short duration. The resistances for Nifty right now remain at 23390, 23460, 23589 and 23703. Closing above 23703 will be very good for Bulls as they can drag the index in this scenario towards 23821, 24021 and 24231 levels. Supports for Nifty on the lower side remain at 23330 (Mother line support, 50 EMA), 23172 and 23046. Closing below 23046 can lead to Bears coming back to pull nifty further down. As of now shadow of the candle is positive. Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock or index. We do not guarantee any success in highly volatile market or otherwise. Stock market investment is subject to market risks which include global and regional risks. I or my clients might have positions in the stocks that we mention in our posts. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message. Do consult your investment advisor before taking any financial decisions. Stop losses should be an important part of any investment in equity.
NSE:NIFTYLong
by Happy_Candles_Investment
GBP/USD Trade in Play – Why This Setup Could Be HUGEWhat’s great everyone? Mr. Blue Ocean FX here with an in-depth breakdown of GBP/USD. We’re currently in a trade, having entered at 1.2297, with stops set at 1.2550. Let’s dive into the key levels and what we’re looking for moving forward. On Friday, we identified a significant lower high around the 1.2297 level, which led to a strong impulse move down to 1.2104. After a pullback and rejection, price failed to make a new lower low, closing around 1.2151, and eventually breaking above resistance at 1.2210, creating a new higher high at 1.2297. We waited for a pullback and a push above 1.2297, which we got, confirming our entry with volume supporting the move. Currently, I’m monitoring the H4 candle; if we see a break and close below 1.2272, we could expect a deeper pullback into the 1.2236 zone, which would present an opportunity for a second entry. However, I believe the fair value gap (FVG) around this level will hold, leading to consolidation before another push higher. Looking at the DXY (Dollar Index) on the weekly timeframe, we had a strong push up from December 2nd to January 6th before topping out. It now appears to be rolling over, potentially forming a higher low before continuing higher. Today’s daily candle has broken structure, with a lower high forming around 109.33, suggesting short-term weakness in the dollar and potential upside for GBP/USD. As we monitor price action, the next H4 candle close will be crucial. If price holds above support and volume supports the move, we anticipate further upside. As always, keeping this breakdown short and to the point. If you found this helpful, boost it, like it, and share it with a fellow trader. Stay tuned for the next update.
Long
by BlueOceanFxAcademy
GBPJPY Update: Bulls in Control? Watch This Key Move Unfold!We’re back with an update on our GBPJPY trade on January 20th, Martin Luther King Day. If you haven’t seen our previous breakdown, be sure to check it out to see how everything unfolded step by step. We’re still holding strong at the 190.02 level, and despite a wick on the weekly candle, there’s a lot of selling pressure within that move. Scaling down to the daily timeframe, we saw a liquidity sweep at 189.54, which provided confirmation for potential upside. On the H4 timeframe, a bullish engulfing candle confirmed a break of structure on H1, pushing price to 190.40. We patiently waited for a pullback and entered our first position on Friday, with stops placed below the 189.38 level, targeting a 1:1.5 risk-to-reward, which was successfully hit at 190.97. Today, January 20th, we added a second position after the breakout of the 190.40 level, entering at 190.53, with stops secured below the 189.88 area. This position has also reached its 1:1.5 target, and we’re now riding it risk-free, aiming for further liquidity grabs. We’ve already cleared liquidity at the 190.91 and 190.50 levels, with the next targets set at 192.40 and potentially 193.00, where we anticipate consolidation before a push to 194.70, a key liquidity zone. Currently, we’re floating at 82 pips in profit, and our first target is secured while we hold for potential further gains. Let’s see how this unfolds! 📈 If you found this helpful, make sure to like, boost, and share it with your fellow traders. Stay tuned for more updates!
Long
by BlueOceanFxAcademy
2
Trump Returns to the White House: Tariffs EyedToday’s inauguration is undoubtedly a big event for traders, analysts, and the global economy. Everyone is watching. Let’s be frank: regardless of your opinion of Donald Trump or his proposed policies, his Presidential election win over Democrat candidate Kamala Harris on 5 November 2024 was nothing short of remarkable. It was a sweeping victory, and Trump returns to the White House today. Trump’s inauguration is expected to begin at 5:00 pm GMT (midday EST) and marks the start of his second term in office. Robust Economy Provides ‘Tariff’ Legroom for Trump While tariffs are undoubtedly inbound, it is unclear what plans Trump will pursue and when he will implement these strategies. Investors are concerned that imposing tariffs could stoke inflation and hinder consumption (and consequently put the brakes on economic growth). According to the latest data (December 2024), we have seen an uptick in US inflation. Year-on-year (YY), CPI inflation (Consumer Price Index) rose for a third consecutive month to 2.9%, PPI inflation (Producer Price Index) also increased for a third straight month to 3.3%, and the US Federal Reserve’s (Fed) primary measure of inflation, the PCE Index (Personal Consumption Expenditures), is hovering just north of the Fed’s 2.0% inflation target at 2.4% (for November 2024). This, coupled with real US GDP (Gross Domestic Product) running at an annualised rate of 3.1% in Q3 24 and jobs data showing that the US economy added 256,000 new payrolls in December 2024, reveals Trump has legroom (some ‘cover’ if you will) to impose tariffs early on in his tenure. Trump Tariff ‘Threats’ So Far Speculation regarding the possibility of as many as 100 executive orders being signed today has been circulating the wires. Plenty of ambiguity is unquestionably present heading into today’s event, and the market dislikes uncertainty. Concerning tariff ‘plans’, Trump has floated several possible approaches, including 100% tariffs against BRICS countries (Brazil, Russia, India, China, and South Africa) unless their governments commit to the US dollar (USD), as well as tariff threats against Canada, China, and Mexico. Trump voiced intentions of introducing 25% tariffs on goods from Canada and Mexico and adding an additional 10% tariff on goods from China. What Will I Be Watching Today? Today, I will primarily be looking for any direction on tariffs, particularly concerning Canada, Mexico, and China. Let’s assume Trump follows through on his threats to Canada and Mexico. A 25% tariff (or more) applied on goods from Canada and Mexico will prompt upside in currency pairs like the USD/CAD (US dollar versus the Canadian dollar) and USD/MXN (US dollar versus the Mexican peso) – for those who monitor implied volatility, check out USD/CAD; we are at levels not seen since early 2023! A 25% tariff on the aforesaid countries will also likely trigger a bid in the US Dollar Index and absorb offers around major resistance at 109.33. In contrast, major US equity indexes are expected to take a hit in this scenario. Another observation I feel needs some consideration is the USD positioning heading into this event. The USD is particularly stretched to the upside for those who monitor COT data (Commitment of Traders report). However, although this may be the case, I still expect USD outperformance on the back of 25% tariffs. Nevertheless, were Trump to pursue a lower tariff rate for Canada and Mexico or not to pursue tariffs at all, a considerable unwind in USD longs is possible, and downside in USD/CAD, USD/MXN, as well as the US Dollar Index, would be on the table (upside in US equities). A situation without tariffs would create considerable volatility and open the door to shorting opportunities in key currency pairs. Regarding China, if Trump were to follow through and impose a 10% additional tariff, this would likely send USD/CNY northbound (US dollar versus the Chinese yuan). Additionally, I expect the AUD/USD (Australian dollar versus the US dollar) and NZD/USD (New Zealand dollar versus the US dollar) pairs to trade lower, given their trading relationships with China. I also believe US and Chinese equity markets will sell off. Less than a 10% tariff or no tariffs on China would likely underpin AUD/USD, NZD/USD, and the noted equity markets (but weigh on the USD/CNY). Looking closely at the S&P 500, you will note that longer-term weekly action ended last Friday in the shape of a bullish engulfing formation, following a shallow correction from all-time highs of 6,099. This, together with the clear-cut uptrend and daily price climbing above its 50-day simple moving average at 5,967 (and a lack of obvious daily resistance), places bulls in a favourable position to challenge all-time highs, technically speaking. Written by FP Markets Market Analyst Aaron Hill
SP:SPXLong
by FPMarkets