Now let's talk about candlestick. One of my favorite indicator. Here I will describe it and I will update it until all pattern that i use in my trading explained.So don't forget to check it back later.I will explain it from candlestick pattern, then to money management, next to mental trading, then I will introduce a system, then finally how to wrap all of the ingredients of trading.Enjoy mate.
Japanese Candlesticks
Intro-Repeatable Japanese Candlestick Patterns to ExploitJapanese candlesticks offer a better visual perspective to predict future market action than bar. Intraday charts with clear Japanese candlestick pattern are invaluable for entr and exit strategy.
Candlestick patterns are reliable on all time frame. Some patterns such as morning stars, evening stars, and haramis are rarely seen in intraday trading because they require a gap between the close of one candle and the opening of another. With electronic forex trading and fluid price movements, gaps rarely occur between intraday candlesticks. Gaps are found where the OPEN of the following candle does not equal in the CLOSE of the preceding candle.
CANDLE GAPHowever, we can still use morning stars and evening without the gaps, since in reality there we do not always get ideal patterns. So play it smart !!!
DOJI
The doji is a reversal signal. The opening and closing prices are at or near the same price. The lack of a real body means the bulls and the bears are fighting and the balance of power may be shifting. The doji is a warning sign of a pending reversal. Proceed with caution. The doji NEED A CONFIRMATION CANDLESTICK before you can act on it, and when found with in other candle patterns the doji candle add strength and reliability to the formation. If there is a doji in an up trend, we need a close below of the doji as confirmation that trend has changed.
Dragonfly Doji (BUllish)
This doji is sometimes seen at the bottom of a move. The open and close prices are the same. The long wick (shadow) below indicates a reversal.THIS PATTERN IS MORE BULLISH THAN A HAMMER
Gravestone Doji (Bearish)
The gravestone doji is often seen at tops. The open and close prices are the same. There is a tall wick (shadow). THIS PATTER IS MORE BEARISH THAN A SHOOTING STAR. Technically, it should not have a body.
Spinning Top
The spinning top can be a very good reversal signal and can be any colour. The smaller the real body, the less the direction the market has.
Bullish Engulfing Pattern
The market must be in a clearly definable downtrend, not in sideways consolidation. The first candle is the colour of the short trend (down) or a doji.The second candle is the colour of the reversal (up).The second candle body engulds the previous body. Ignore the wick. An even stronger signal occurs when a candle body engulf the bodies of 2 or 3 previous candles.
Bearish Engulfing Pattern
The market must be in a clearly definable uptrend. The first candle is the colour of the short term trend (up) or a doji. The second candle is the colour of the reversal (down). The second candle body engulf the previous candle body. Ignore the wick. The size of the candle body being engulfed does not matter. A strong signal occurs when 2 or more candle bodies are engulfed by one candle body.
Tweezer Bottom
Two or more candlesticks with matching bottoms. They can be composed of real bodies, wick and/or dojis.
Tweezer Top
Two or more candlesticks with matching tops. They can be composed of real bodies, wick and/or dojis.These occur on consecutive or nearby candles.
Tweezer Top and Bottom candlestick patterns are good reversal signals. The wick or the body must be in the same level. Look for the 2 types of tweezer bottoms and 2 types of tweezer tops.
More candle pattern later (dont forget to check the latest update)
Dragonfly Doji (BUllish)
This doji is sometimes seen at the bottom of a move. The open and close prices are the same. The long wick (shadow) below indicates a reversal.THIS PATTERN IS MORE BULLISH THAN A HAMMER
Gravestone Doji (Bearish)
The gravestone doji is often seen at tops. The open and close prices are the same. There is a tall wick (shadow). THIS PATTER IS MORE BEARISH THAN A SHOOTING STAR. Technically, it should not have a body.
Spinning Top
The spinning top can be a very good reversal signal and can be any colour. The smaller the real body, the less the direction the market has.
Bullish Engulfing Pattern
The market must be in a clearly definable downtrend, not in sideways consolidation. The first candle is the colour of the short trend (down) or a doji.The second candle is the colour of the reversal (up).The second candle body engulds the previous body. Ignore the wick. An even stronger signal occurs when a candle body engulf the bodies of 2 or 3 previous candles.
Bearish Engulfing Pattern
The market must be in a clearly definable uptrend. The first candle is the colour of the short term trend (up) or a doji. The second candle is the colour of the reversal (down). The second candle body engulf the previous candle body. Ignore the wick. The size of the candle body being engulfed does not matter. A strong signal occurs when 2 or more candle bodies are engulfed by one candle body.
Tweezer Bottom
Two or more candlesticks with matching bottoms. They can be composed of real bodies, wick and/or dojis.
Tweezer Top
Two or more candlesticks with matching tops. They can be composed of real bodies, wick and/or dojis.These occur on consecutive or nearby candles.
Tweezer Top and Bottom candlestick patterns are good reversal signals. The wick or the body must be in the same level. Look for the 2 types of tweezer bottoms and 2 types of tweezer tops.
More candle pattern later (dont forget to check the latest update)
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