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Candlestick Analysis

A Beginner's Guide to Candlestick Charts A candlestick chart is a type of financial chart that graphically represents the price moves of an asset for a given timeframe. As the name suggests, it’s made up of candlesticks, each representing the same amount of time. The candlesticks can represent virtually any period, from seconds to years. While candlestick charts could be used to analyze any other types of data, they are mostly employed to facilitate the analysis of financial markets. Used correctly, they’re tools that can help traders gauge the probability of outcomes in the price movement. They can be useful as they enable traders and investors to form their own ideas based on their analysis of the market. The following price points are needed to create each candlestick: Open — The first recorded trading price of the asset within that particular timeframe. High — The highest recorded trading price of the asset within that particular timeframe. Low — The lowest recorded trading price of the asset within that particular timeframe. Close — The last recorded trading price of the asset within that particular timeframe. Collectively, this data set is often referred to as the OHLC values. The relationship between the open, high, low, and close determines how the candlestick looks. The distance between the open and close is referred to as the body, while the distance between the body and the high/low is referred to as the wick or shadow. The distance between the high and low of the candle is called the range of the candlestick. Being able to read candlestick charts is vital to almost any investment style, learn different candlestick patterns and you will be surprised how accurate they are.
OANDA:XAUUSDEducation
by TopTradingSignals
8
Pinbar Forex Trading SystemPinbar Forex Trading System — a popular strategy for entering and exiting positions that is based on the particular candlestick pattern and the following price action. The Pinbar (also known as "Pin-bar" or "Pin bar") pattern was first introduced by Martin Pring in his Pring on Price Patterns. Features -Conservative strategy offers low-risk high-yield opportunities. -No-loss rate is pretty high if break-even is applied. -Rare occurrence. -Timing is critical. -Support/resistance is difficult to formalize. Strategy Set-Up Any currency pair and timeframe should work, but longer-term timeframes (such as H4, D1 and W1) should work better. Pattern consists of three bars: the left eye, nose and right eye. The left eye should be a bar up for the bearish Pinbar pattern or a bar down for bullish pattern. Nose bar should open and close inside left eye, but its high (or low, for the bullish set-up) should protrude much farther than left eye's high (or low). Both nose bar's open and close should be located in the bottom (top, for the bullish set-up) 1/4 of the bar. The right eye is where the trading happens. An additional condition for the good pattern set-up is the strong support/resistance level formed either behind the eyes or near the point of the nose. The stronger are the support/resistance levels you incorporate into this pattern, the more accurate it will be. Entry Conditions Aggressive entry option is to enter a position when in the right eye price retreats behind the left eye's close level. Conservative entry point is below (above for bullish set-up) the nose bar. Exit Conditions Conservative stop-loss can be set behind the nearest support/resistance level behind the eyes. A less conservative approach would be to set stop-loss to immediately behind the nose bar point (in this case, your reward/risk ratio may suffer). Conservative take-profit can be set immediately after the left eye low (high for the bullish set-up). Aggressive take-profit level may be placed farther — to the next strong support (resistance for bullish positions) level.
Education
by Anbat
FREE 12 WEEKS INTENSIVE TRADING PROGRAM 📚 Hey traders, For those who just started to trade, I suggest a 12 weeks intensive training program. Each week will be dedicated to a specific topic. Starting from the basics you will gradually mature and by the end of the intensive you will have a complete trading strategy. ✔️Week 1 - Practice market trend identification Learn to identify the direction of the trend. Master the recognition of a bullish trend, bearish trend and sideways market. ✔️Week 2 - Practice support and resistance. Learn to identify key levels. Master support & resistance recognition. ✔️Week 3 - Learn candlestick pattern. Study classic candlestick formations and practice their recognition. ✔️Week 4 - Learn price action patterns. Study classic price action patterns: trend-following patterns, reversal patterns and consolidation pattern and learn to recognize them. By the end of the first month, you will mature the basics of candlestick chart analysis. ✔️Week 5 - Practice supply and demand zones. Learn to identify supply and demand zones. Learn to combine candlestick analysis with support and resistance to identify the potential reversal zones. ✔️Week 6 - Practice multiple time frame analysis. Master top-down analysis. Learn to apply all the techniques studied previously on multiple time frames. ✔️Week 7 - Learn different entry strategies. With all the knowledge being obtained, you can practice different entry techniques. You can try trading candlesticks patterns or price action patterns, or simply key levels. Search what works for you. ✔️Week 8 - Learn risk management. Of course, entry strategies are not enough for profitable trading. Learn how to set stop loss and how to manage your risks properly. By the end of the second month, you will have a foundation for a strategy building. ✔️Week 9 - Practice trade management. Knowing how to enter the trade and how to manage the risks, the next step is to learn how to manage the active position (stop loss trailing, position protection, manual closing, etc.) ✔️Week 10 - Create a trading plan. Combine all the knowledge that you gained in a structured trading plan. ✔️Week 11 - Follow the strategy. Be disciplined and follow your rules. Test them and learn to be consistent. ✔️Week 12 - Review your plan. Following your strategy, you will inevitably find its flaws. Learn to constantly improve it. By the end of the third month, you will have a complete rule-based trading strategy. Of course, that won't be a perfect strategy, but you will have broad knowledge in technical analysis. The next 3 months alone should be sacrificed on polishing and improvement of your trading plan. Try this intensive, traders. I strongly believe that you will see a dramatic improvement in your trading upon its completion. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
15
🔥Almost 1 month after the MERGE! WHY ETH DOESN'T PUMP?!Hi friends! Almost a month has passed since the Merge, and Ethereum still has not grown. What is the reason? What are my targets for Ethereum? ✅ As i mention in the last idea, the merge is like the Halving for BTC. A lot of retailers expect the HUGE pump with x10-100 profit. But in the real life it doesn't work. ✅ If a lot of people expect something, it has lower chance to happen. Take a look on BTC after the Halving. Usually BTC start to consolidate for 2-3 month or DUMP for 20-30% after this. The same happen now. It's force weak hodlers to sell their ETH and it's good for the future growth. ✅ My recommendation is to be prepared for strong price movements in the near future. 📊 Preconditions to open a long: 🔥 squeeze to the trendline 🔥 bullish BTC pull the altcoins to the new highs and it`s highly expected. At least local pump to $25-32k 🔥 whales orders to buy on DOM and Footprint scalping tools. They help me to identify the big g uys and open a trade with them 🚩 According to second scenario that shown on the chart, the volumes should grow if the liquidity collection will happen. Pay your attention to this scenario too. 📊 The targets for the long: 1. $1540-1650 - the closest value area 2. $2030 - the key level, vale 🔥 Usually, I recommend you to book at least 50% of profit but according to the fundamental expectations, you can hold this long trade a little bit longer. Especially, if BTC become local bull market. 💻Friends, press the "boost"🚀 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade
Education
by Yuriy_Bishko
7
HOW-TO: Adjust Default Parameters in MLC for Intraday TradingThe default parameters in Master/Last Candle (MLC) indicator are used for the standard timeframe 1D. Due to the difference in nature between bars of intraday timeframes and bars of day-and-above timeframes, some settings could be changed as below to make the indicator tailored to your case. • Increase default Max Volume Drop % from 25 to 30. We have seen a case in timeframe 30m that requires deeper volume drop than 25% to catch the big move. If you also find a big move that is not captured by MLC, try to adjust this measure as we do. If it is not your case, ignore this item and keeping the old default value as 25. Before After • Other parameters: Percentile % , Min Price Breakout % . Before After increasing Percentile % of Cx candles from 50 to 60 After increasing Min Price Breakout % from 20 to 25
Education
by SupersafeTrader
Bullish and bearish engulfing candles concept Educational Series Price Action concept series Engulfing pattern Engulfing means to coverup small thing with larger thing. It is a pattern which shows counter attack made by bulls or bears. Bullish Engulfing Whenever the entire of body red candles(Bear) is covered by Big green candle(Bull) then it is called Bullish engulfing candle. This pattern shows presence of bulls in market and bear are completely trapped. Significance of this candles generally seen when instrument is at crucial support or in bull territory where price has bottomed. Bearish Engulfing Whenever the entire of body green candles(Bull) is covered by Big red candle(Bear) then it is called Bearish engulfing candle. This pattern shows presence of bears in market and bulls are completely trapped. Significance of this candles generally seen when instrument is at crucial resistance or in bear territory where price has top. Please Like,share and follow my profile for more such educational tutorials.
NSE:APLAPOLLOEducation
by Darshan_Panchal
The ABC pattern: One of the Traders’ FavoritesTrading ABC pattern is one of the most frequently used trading strategies by Forex/financial traders. The chart is a Bearish ABC Pattern. Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. Demonstrate an example of an ABC pattern trading. The chart shows that the price after being bullish has a double bounce at a level of resistance. It produces a bearish engulfing candle followed by another bearish candle. However, the price starts having consolidation. Since it is double top support, the sellers may keep their eyes on the chart. The chart produces another bearish candle followed by a long bearish one. The price usually makes a correction after such a move. The sellers are to wait for the price to make a bullish correction and produce a bearish reversal candle to go short in the pair below the last lowest low. As expected, the price starts having the correction. It produces two bullish candles. The sellers hope that the chart produces a bearish engulfing candle closing below the last lowest low to trigger a short entry. This is what pushes the price with more momentum. Let us find out what happens next. The chart produces an inside bar. This is not a strong bearish reversal candle. However, the price finds its resistance. This is called the C point. If the price makes a breakout at the last lowest low, the ABC pattern traders trigger a short entry. The price makes a breakout closing well below the last lowest low. The sellers may trigger a short entry right after the candle closes by setting stop loss above the last support (C point). Take Profit is to be set with 1R. Let us look at the chart and find out how the trade goes. The price heads towards the South with good bearish momentum. It produces two consecutive bearish candles and hits the target (1R). Here is an important point to remember. The ABC pattern is a widely used trading strategy. Thus, the price often reverses once it hits the target. Thus, the traders are recommended that they close the whole trade and enjoy the profit. Trailing Stop Loss and partial profit-taking do not work well in this pattern. Do some back testing and get well acquainted with this pattern. It may bring you a handful of pips. Keep retail Forex trading as simple as possible, it is the best way to trade. Risk management always. Have Plan & Trade Plan.
Education
by Anbat
1
Candlestick Rejection Strategy! What it is? Candlestick rejection strategy is a pure price action swing trading strategy. It makes use of the concept of price rejection or candlestick rejection patterns to invalidate counter-trend momentum for a trade continuation. By applying such candlestick rejection strategy onto swing trading, it allows trades to capture spots at which market prices are at rest during retracements before rejoining back the existing dominant trend. How to use? Some trade recommendation for such candlestick rejection strategy is to use it as a candlestick rejection pattern on counter-trend moves. This means that we pick candlestick rejection pattern only for the sake of searching for breakout continuation with the dominant trend at counter trend waves.Entry can be made after the breakout occurs at the high or low of The Mother Bar and stop loss order can be placed at the opposing breakout side's high or low. Further trade help can also be incorporated to help increase the trade's probability of success. For instance, it can be used together with other technical tools such as dynamic moving averages and Fibonacci retracement tool. Some may even want to consolidate other trading strategies to further increase trade’s probability of success. Thank you for reading, we hope you enjoyed our educational effort!
OANDA:XAUUSDEducation
by UnitedSignals
5
Why Learn Candlestick Patterns? Explained!👨‍🏫 1. Candlestick Chart Patterns Signal Earlier Because its patterns constitute one candle or multiple, it signals much faster than classical technical analysis such as Moving Average (MA) and chart patterns such as triangles. Early signals inform us to close our open positions or initiate a new one, and both cases are beneficial. 2. Low risk In candlestick charting techniques, the bottom of the top of the pattern acts as a support or resistance line. Compared to other charting techniques, such as classical chart patterns, the risk is much lower because you have to wait until the price breaks the support or resistance line.But, in candlestick patterns, you do not have to wait. Thus, using a candlestick chart, you can profit more by closing earlier and entering earlier. 3. Reading Candlestick Chart Is Easy Every candle or combination of candles has something to say.For example, a doji means indecision. If it appears at the end of an extended trend, it implies that the current trend has lost strength. And market participants are in an indecision moment. Thus, a counterattack is enough to change the direction. 4. Candlestick Chart Patterns Are Reliable Candlestick chart patterns are reliable if used properly. I mean that traders should look at broader pictures to make a decision on what a candlestick pattern says.For example, supporting signals should confirm a pattern. And if there is no confirmation, it is better to avoid trading. 5. Learning Candlestick Charting Is Easy Learning candlestick chart techniques is easy due to the body and shadows of candles. Any size of tails and candles transfers a meaning. For example, a long body without shadows indicates that drivers are potent, and 4-price doji means that bulls and bears are equal in power. 6. Candles Can Help Other Techniques You can use candles with every other tool and technique. It is complementary to technical indicators and confirms their signals. 7. Studying Charts Become Easier Learning history is easy with candlesticks. For example, if you want to study the GDP impacts on a specific financial asset, you can find all of them and conclude. 8. Candlestick Charting Is the Best Option For Day traders Day traders open and close their position on the same day. So, they need technical analysis that triggers signals quicker to initiate a new one or close their current position.Candlestick patterns signals faster than any other. The disadvantage of Candlestick Chart Patterns Everything has good and bad sides. Candlestick chart is no exception. Probably the biggest disadvantage of candlestick chart patterns is that they do not define take-profit level. However, you offset it by using other tools such as Fibonacci retracement. As mentioned earlier, you can combine candles with other techniques to validate your analysis. Final Words Candlestick chart analysis is a great method for the examination of financial assets.The best way to use it is to combine it with other tools and experiences.
Education
by TopTradingSignals
8
One Hour Strategy- Engulfing candle entry to short trade!The 1 hour Forex strategy that most intraday traders use as part of their strategy. The 1-hour trading strategy is a very popular trading strategy, as there are so many ways that you can utilize the one-hour period. Rules: Right pair, Right Price, Right Session & Right Time. KEY TAKEAWAYS The 1-hour forex trading strategy is a popular strategy amongst beginners and intraday traders due to the variety of ways a forex pair can be analyzed during this period. The one-hour timeframe captures a lot of market movement and can be a good way to gauge the latest sentiment. Many traders use this strategy in conjunction with technical tools such as RSI, MACD, Bollinger Bands and Moving Averages. What is the 1 hour forex strategy? The one-hour trading strategy is simply the timeframe that you conduct your analysis on any forex pair. The intraday strategy is popular due to the number of ways a forex pair can be analyzed during the one-hour timeframe. To take advantage of the 1-hour forex strategy, you need three things: 1: Analysis – Your analysis should form part of every single trade you take. It is crucial that you conduct thorough analysis, which may involve certain technical or fundamental factors. For technical analysis, consider using a range of tools such as MACD, Bollinger Bands, Moving Averages or Price Action. For fundamental analysis, you might consider paying close attention to the release of important financial data such as interest rates, CPI, or Labor numbers. 2: Entry – Getting your entry right can potentially mean the difference between more or less profit, and in some cases, it can mean the difference between a win or a loss. Your entry should be confirmed by your analysis. For instance, if you are a fan of using Price Action, then you might wait for confirmation until a particular candle presents itself – such as the morning star for a potential sell. 3: Exit – Your exit is just as important as your entry, although some might argue that it is more important depending on the circumstances of your trade. Planning your exit correctly can mean locking in profits, but more importantly it could minimize losses. Your exit should again have some sort of alert based on your analysis; this is to lock in profits as well as minimize losses. RULES: Trade right pair, at the right price, during the right session & during the right session. Was noted RSI below under 50 & yellow line above purple line? Yes. The attached trade had all of the four checked off (which gives you high probabilities of success doing this short trade for up to a 237 pips) of profit on your trade. Only three candlestick setups you ever need to know and use which are Engulfing (two candles), Harami (two candles) and/or Pinbar (three candles)<-- they are the one's I use exclusively in trading forex.
Education
by Anbat
1
What Is Imbalance Of Price Action Orders?What Is an Imbalance of Orders? An forex imbalance of orders exists when there are too many (either buy or sell) orders of a listed pair that cannot be fully matched by the opposite order on an exchange. This applies to either buy, sell, or limit orders. An imbalance of orders is also referred to as an "order imbalance." Good news would increase the demand (buy orders) for a certain pair and would also make it attractive to hold onto. Likewise, unexpected negative news can bring a large sell-off (sell orders) and little demand for a pair that does not look promising. HIGH impact news can leave imbalances on charts- especially on 1hr or 4hr charts during a trading session. These are in my top five easy scalps or day trading trades to do during my trading. << Should be yours too!!! Things to be aware of with Forex imbalances area: 1) Order imbalances exist when there is an excess of buy or sell orders for a specific Forex pair. 2) Most order imbalances are short-lived but can exist for hours and even the entire day. 3) Using limit orders rather than market orders can help mitigate some of the problems with buying or selling during order imbalances. Some traders trade before or during high impact news hits certain pairs- SMART play is to wait for that one hour candle to close- and IF you see an either buy or sell imbalance in 1 hour candlestick (no price action either right or left of that candlestick and zero WICKS either)- wait for price action to reverse current trend to negate the imbalance (either buy or sell)- the opposite way. Those are easy trades- but always use risk management on all trades you do. High impact news can leave these areas of imbalance on any timeframes (yes, gaps in price actions are considered imbalances in price too). Look for big huge candlesticks or gaps left on charts (big banks are buying or selling). A reversal point happens when filling of big orders changes the price behavior. I look and trade these price reversals when price action closely consulates around major quarter point levels ).000 or .500 levels. Then shows me one of the three following candlestick set ups (only ones I trade and need in trading): Harami (2 candles), Engulfing (2 candles) and/or Pinbar (3 candle) setups. Look for: Large candlesticks, with no candlesticks left or right on candlestick and have zero WICKS/SHADOWS in that area either. (this is a clue/hint). RSI line (purple) when up thru BASE line (yellow) and above 50 on RSI- so only trade noted had liquidity, momentum & volume to rock price action up or visa versa.
Education
by Anbat
10
Strong Trading Strategy, Do not trust all the pin barsThe pin bar pattern is one of the best signals on any market for predicting the next move. But should you trust all pin bars? In my humble opinion, NO, and I’m explaining this idea below and the approach I take to distinguish valid pin bars from invalid ones. I suppose you already know what is a pin bar, so I’ll not explain its basic details here. If you don’t know please, do a search and read its basics first. I have 3 filters for my pin bars. Find them below and boost the idea if you liked it :) 1- What should it look like? In my opinion, having a candle with a shadow (wick) longer than the other and a small body is not the only factor to call it a pin bar. I filter pin bars by expecting some pre-defined proportions and ratios between body size and shadow lengths. Here are my rules: The body must be at least 2% of the candle height. The long shadow must be at least 4 times bigger than the body. The long shadow must be at least 2 times bigger than the short shadow. I know you are rightly thinking about how to calculate them, but do not! There is a simple indicator that does this calculation and highlights the pin bars for you, the Abnormal Pin Bar indicator . You just need to set it up with your values. You can even set up an alert to let you know when a pin bar is shaped. These are my rules and values that fit my strategy, you can use them. Also you can do your own tests to find the values that fit your psychology and your strategy. You can say you prefer a pin bar that has a bigger body than yours! it’s okay, just do your own tests to make sure it works for you. 2- What is behind that? Always inspect the smaller timeframe to check if the sub-candles that shaped the pin bar confirm its bearishness or bullishness. Yes, you should always see the big picture but remember, all the moves start from smaller timeframes. You shouldn't expect too much from a movement with bad groundwork. For a bullish pin bar, its bullish sub-candles must overcome the price action and volumes of its bearish ones, and on the other hand, for a bearish pin bar, its bearish sub-candles must surpass the price action and volumes of its bullish sub-candles. It would be nice to write a long and detailed article about bearish and bullish sub-candles competition and when they overcome each other. It's not something you decide just by comparing the number of bullish and bearish sub-candles! Long story short, it’s all Price Action and Volume Analysis. and my favorite one is when the volume of sub-candles in one direction surpasses the volume of the candles in the opposite direction. Or you can look for volume and price anomalies. What is the volume and price anomaly? The volume and price anomaly is a simple pattern that occurs in two consecutive candles. Assuming two descending candles or two ascending candles in a row, if the body of one candle is bigger than the other one, we expect its volume to be larger, or if the body of one of them is smaller, we expect its volume to be small. Now, if this pattern is not observed for two consecutive candles, we call it a volume and price anomaly. For example, a candle has a larger body than the previous candle, but its volume is smaller than the previous candle. Or a candle that has a smaller body than the previous candle, but its volume is greater than the volume of the previous candle! Anomaly Confirmation Candle: In most cases, after the volume anomaly, I wait for a confirmation candle. This candle will be a bearish candle for a bullish anomaly and will be a bullish candle for a bearish anomaly. The volume of the confirmation candle is very important in anomaly, and in addition to its shape and size, you should also pay attention to its volume. I just explained the anomaly here to give you a point of view and perspective. I don't want to make this idea overlong so I do not go into more details. Maybe it would be a subject for another idea ;) In which timeframe should the inspection be done? You will understand which timeframe you should choose to inspect a pin bar sub-candles by experiencing it over time, but I personally consider two things: 1- The timeframe must be well-known and be used by not only me but also by most traders. 2- It must contain at least 4 sub-candles. e.g. for a daily pin bar, 12h reveals only 2 sub-candles while 4h reveals 6. For example, for a closed daily pin bar, it would be a good check to inspect candles for the 4h timeframe. or after a weekly pin bar close, you can check the candles of the last 7 days. Consider this instruction and practice on the chart to see the result. If one of the pin bars in sub-candles is also a pin bar, do the same inspection for it. 3- On there any key level around? A pin bar is an important pattern but one that touches a trend line or any important level is leading! The combination of a key level and a valid pin bar is something very valuable and instructive. It's definitely not to be missed, provided you do your own analyses. Prioritising trend lines and important levels always makes my decision easier when a pin bar spawns near to more than one significant level. Check twice if you face a pin bar in peaks, troughs, resistance or support areas, supply and demand zones, or as a rejection from a trend line. You can use the Trend Key Point indicator to highlight important levels. Additionally, there is a guide about its usage . Bonus Tips: Pin bars on bigger timeframes are more reliable. If there are lots of pin bars shaped on a chart, think twice, select a bigger timeframe, or do not use this strategy on that specific asset. For two valid pin bars in a row, the one with a bigger volume is more important to me. Check twice if the volume of a pin bar is bigger than the volume average. Check twice if the volume of a pin bar is bigger than the volume of its previous candle. Do you have any questions? ask in the comments. Do not hesitate to write your opinion about this idea. I'd appreciate if you share this idea with your network.
Education
by bhnmzm
1
The Inside Bar ConceptThe Inside Bar is a lovely pattern that shows consolidation in a valuable way. As you can see the candle parent candle creates the high and low that will low key to know the consolidation is over. Price staying inside this area tells you so many things ! 1. The Market volume is low in terms of trades being executed on the instrument. 2. Where price is at fair value 3. When price action is ready to leave fair value. Take a look at your chart and back test this. You will be amazed !
TVC:DXYEducation
by CandlesofKarma
1
[Candlestick Patterns] Just need to know these three!#Candlestick #CandlePattern #Tocademy #Tutorial Hello traders from all over the world, this is HAMZA_ZDH=) I was unexpectedly surprised by many of you who liked and supported my last post about the basic concept of TA( Technical Analysis ). Today I prepared a brief lecture about the Candlestick Pattern, one of the most fundamental phenomenon and behaviors that traders must be well-informed. In fact, we should be very familiar with these textbook contents and interpret it in a glimpse on the technical chart unconsciously. Just like we don't pay direct attention about each breathes when breathing, like we don't care each and all of the alphabets when we speak, or like we don’t perceive location of each keyboards every moment as we type, this very technique should be performed automatically and quickly by observing dominant formations of candlestick bars. As a matter of fact, comprehending market trends and price actions only by referring to the candlesticks is yet too spurious. It should be used in such a way to weight on certain scenarios in a macroscopic view, rather than deriving precise and specific PRZ(Potential Reversal Zone)s and distinguish the accurate market trend. It’s never like ‘The price must go up because this pattern just appeared’. Furthermore, I strongly believe that the reliability of the candlestick pattern strategy is declining especially in recent financial market, where we encounter countless non-traditional and abnormal situations that were not very common in the past. Hence among the existing ‘Textbook’ candlestick pattern strategies that can easily be found on Google , there are particular patterns that are still very reliable on current market and there are ones that are not as reliable as it used to be. So here, I will organize everything very clearly for you guys.
BITSTAMP:BTCUSDEducation
by Mr_HaMza_
Shooting Star Candlestick What is the Shooting Star Pattern? 1. A shooting star is a type of candlestick pattern which forms when the price of the security opens, rises significantly, but then closes near the open price. 2. The distance between the highest price of the day and the opening price should be more than twice as large as the shooting star’s body. What does Shooting Star tells you? 1. Shooting stars signals a potential downside reversal and is most effective when it forms after 2-3 consecutive rising candles having higher highs. 2. A shooting star opens and rises strongly during the trading session, showing the same buying pressure that is seen over the last trading sessions. 3. At the end of the trading session, the sellers push the price down near the open. 4. This shows that the buyers have lost control by the end of the day, and the sellers have taken over. 5. The long upper shadow indicates that the buyers are losing position as the price drops back to the open. 6. The candle after the shooting star gaps down and then moves lower on heavy volume. 7. This candle helps in confirming the price reversal and indicates that the price will continue to fall. Trading Scenario 1. Trade Entry: Before you enter a shooting star trade, you should confirm that the prior trend is an active bullish trend. 2. Stop Loss: You should always try to use a stop-loss order when trading the shooting star candle pattern. 3. Taking Profits: The price target for this trade should be equal to the size of the shooting star pattern. Limitations of Shooting Star 1. One should not only rely on a candle pattern like in a shooting star for making trading decisions. 2. This is why confirmation is required, one can confirm by the next candle or other technical analysis indicators. 3. One should also use stop losses when using candlesticks to control the losses. 4. A candlestick pattern is more significant when it occurs near an important level signaled by other forms of technical analysis.
BINANCE:ETHUSD.PEducation
by yaser_rahmati
OXY, A TRUE example of FALSE break out !Regardless of what legendary investors (Like Warren Buffett ) or famous traders do, we always should trade our own strategy. OXY was fighting with a strong static resistance and finally lost the battle. We have 9 hits to this static line which shows how powerful it is. False break outs are among the most common traps in trading . Although the concept is very simple , many traders fall simply into the trap just because of lack of patience or weak risk management strategy. Please keep this words in mind and I promise you will be the winner in long term : " Be sure about a break out before jumping into a trade " . True break outs have three conditions: 1. Break out should be done by a strong high volume bullish candle and at least 50 % of body of such candle should be placed above the valid resistance. 2. A pull back to broken resistance and rotation is necessary to be sure about true break out. Please note sometime we may not see a complete pull back ( if there is a support before broken resistance) but who can accept the risk of false break out? 3. Continuation of movement in direction of break out. Occidental Petroleum fulfilled first condition in it's last attempt ( if we close our eyes to volume) with a gap up bullish candle above the resistance. It made also a pull back but no rotation and continuation of the upside movement came after that. It means we had a false break out. I investigated false break outs of a dynamic resistance in my previous publication on BTC and here I showed an example of false break out of static resistance. Regardless of type of resistance (dynamic or static) , concept is the same. True break out setup has been shown on the chart. As you see the concept is very simple. Please keep this concept in mind and believe me you won't regret. Wish you huge profits and good luck.
NYSE:OXYEducation
by SaeedSajedi
5
Pro Traders Take Profits on EarningsWhat happened today on the earnings announcement by PEP? Pro traders took profits against the retail crowd's buying on the news headlines that suggested an earnings "beat" for Q2. The retail buying causes the gap up at open, which is a prime cue to take profits on swing trades. This was what we call a pre-earnings run. The earnings results don't matter as much as the technical setup a few weeks ahead of the earnings release. Swing trades were initiated at the reversal from the support at 155, confirmed by price and volume patterns at that time. Now, with resistance overhead, where the initial target for this earnings play was, and the retail crowd causing a gap up at open on the earnings announcement, this is where professional short-term traders close long positions. This should not be construed as a good opportunity to short swing-style, however. It is an example of the execution of a long swing-style earnings strategy. This is an example of TechniTrader's Relational Technical Analysis techniques for planning better trades.
NASDAQ:PEPEducation
by MarthaStokesCMT-TechniTrader
2