Posts Tagged ‘candlestick’

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Shooting Star — Candlestick Pattern

The shooting star is a bearish reversal pattern, which you can locate at the top of an uptrend. The body can be either bullish or bearish. When the price closes below the open price, then it becomes a more reliable reversal pattern, as bears appear to be stronger than the bulls to push price lower. The upper wick is twice the length of the real body. For example, look at this chart. At the end of the bull run, you […]

Hanging Man — Candlestick Pattern

The hanging man is a single candlestick reversal pattern. The body of the candlestick can be bullish or bearish. It is a bearish reversal pattern, found at the top of an uptrend. It indicates a potential reversal. It consists of a small body with a long lower wick, which should be twice the length of the real body. This pattern is similar to a hammer candlestick and the open price, the low price, and the close price are roughly the same. […]

Doji — Candlestick Pattern

The doji candlestick pattern is formed at the end of an uptrend as well as downtrend. The doji candlestick has the same open and the close price with no real body. The length of the upper and lower wick need not be equal and resembles the shape of a cross. It represents indecision in the market. For example, look at this chart. As you can see, you have this nice uptrend. Then the formation of this doji candlestick and it is followed […]

Hammer — Candlestick Pattern

The hammer is a single candlestick pattern, located at the bottom of a downtrend. For this pattern to form, the open, the high, and the close price are roughly the same. The lower shadow is twice the length of the real body. The pattern is more reliable when the high price and the close price are the same. For example, look at this chart. The market is a downtrend. When the trend slows down, you have the formation of this hammer candlestick. This shows […]

Abandoned Baby Bottom

The abandoned baby bottom is a bullish reversal pattern. It is a very rare pattern to observe. You can locate this pattern at the end of the downtrend. The first candlestick is bearish. It is followed by a doji candlestick gapping lower and its shadow must fill the gap. The third candlestick is bullish gapping higher on open. You can enter a long position after the formation of this pattern with your stop-loss […]

Bearish Doji Star

The bearish doji star is a bearish reversal pattern. It consists of three candlesticks and you can locate this pattern at the end of an uptrend. The first candlestick is a bullish candlestick. It is followed by a doji candlestick opening higher. The third candlestick is bearish and closes below the midpoint of the first candlestick. You can enter a short position with your stop-loss above the highs. Do not rely on candlesticks alone for making […]

Bearish Harami — Candlestick Reversal Pattern

The bearish harami pattern is a bearish reversal pattern and consists of two candlesticks. It occurs at the top of an uptrend. The first candlestick is a bullish candlestick. It is followed by a smaller bearish candlestick contained within the range of the first candlestick. You can enter a short position with your stop-loss above the highs. Use technical indicators for additional confirmation. For example, look at this chart. At the end of this significant uptrend, you have […]

Bearish Engulfing — Candlestick Reversal Pattern

This is a bearish reversal pattern occurring at the end of an uptrend. It consists of two candlesticks. The first one is a bullish candlestick. It is followed by a larger bearish candlestick, which completely engulfs the body of the first one. You can enter a short position after the formation of this pattern with your stop-loss above the highs. Use technical indicators for additional confirmation.

Evening Star — Candlestick Reversal Pattern

The evening star is a bearish reversal pattern and consists of three candlesticks. You can locate this pattern at the end of an uptrend. The first candlestick is bullish. The next candlestick can be either bullish or bearish and gaps up on open. The third candlestick sees a sell off to confirm the pattern. You can enter a short position with your stop-loss above the highs. Do not trade using candlestick patterns only. Use […]

Dark Cloud Cover — Candlestick Reversal Pattern

The dark cloud cover is a bearish reversal pattern occurring at the end of an uptrend. It consists of two candlesticks. The first candlestick is a bullish candlestick. It is followed by a bearish candlestick gapping up on open and closes below the midpoint of the first candlestick. You can enter a short position with your stop-loss above the highs. Use technical indicators for additional confirmation. For example, look at this chart. As you can see on the chart, […]

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