Posts Tagged ‘pattern’

The head and shoulders pattern is formed at the top of an uptrend. It is a bearish reversal pattern. The market forms the first high, which is the left shoulder. It is followed by a higher high, which is the head of the pattern. It is then followed by a lower high, which is the right shoulder of the pattern. The important thing to note is that you need to pay attention to the neckline, which is the support level. To trade […]

A hammer candlestick appears at the end of a downtrend. It indicates a potential reversal to the upside. It consists of a small body with a lower wick twice the size of the actual body. The longer the lower wick, the more reliable the reversal is. The pattern becomes complete when the following candlestick closes above the close of the hammer candlestick. You can take a long position using this pattern. Your stop-loss can be placed before the low of the hammer […]

The bearish engulfing pattern is a reversal pattern, which signals a potential reversal to come. This pattern consists of a bullish candlestick and is followed by a bearish candlestick, which completely eclipses or engulfs the body of the first candlestick. It indicates that the sellers have overtaken the buyers. For this pattern to form, you need an existing uptrend. This pattern becomes more reliable when the bearish candlestick opens above the close of the bullish candlestick and closes […]

The hammer is a single candlestick pattern and implies a bullish reversal. It is found at the bottom of a downtrend. Normally, price reverses to the upside after the formation of this pattern. However, this pattern fails sometimes, and this is what this video is about. The hammer candlestick consists of a small real body and a long lower wick. The buying pressure causes the candlestick to close near the upper range. And the price reverses to the upside. However, consider […]

Double top is a popular chart pattern in technical analysis. It is very easy to spot at the top of an uptrend. This is a bearish reversal pattern. It consists of two highs and followed by a decline in prices. After the second peak is formed, there is a loss of momentum, and buying pressure. A neckline or a support level is formed below and between the two peaks. To trade this pattern, you need to wait for the break of the neckline. […]

In this video, you will learn about fractals, and how to use them in your trading strategy. It may sound unpredictable for you to forecast price movements in forex trading. But candlesticks produce a series of patterns, called fractals. The bearish fractal consists of a candlestick with highest high and two candlesticks with lower highs on both sides. The bullish fractal consists of a candlestick with lowest low and two candlesticks with higher […]

In this video, you will learn about the heikin-ashi candlesticks, and increase your profits by identifying the trend strength. It means an average bar in the Japanese language. You can use this indicator in technical analysis to predict future price movements. You can use these candlesticks in various timeframes such as the 5-min, 1-hour, etc. It gives more definitive trend signals. The candlesticks are red in color in a downtrend and green color […]

A pinbar is candlestick with a small body and a long upper or lower wick. The four types of pinbar candlesticks are hammer, shooting star, inverted hammer, and hanging man. The hammer is a bullish reversal pattern. It consists of single candlestick with a small real body and a long lower wick. You can spot the hammer at the end of a downtrend. You also have the inverted hammer candlestick, with a small real body, and a long […]

In this video, you will learn how to identify the shooting star candlestick pattern, and use it as a reversal signal in your trading. Shooting star is the bearish counterpart of the hammer candlestick. This candlestick consists of a long upper wick, which must be at least two times the length of the real body. This pattern becomes more reliable with a long upper wick. The body of the candlestick can be bullish or bearish. A bearish […]

In this video, you will learn about how to identify the bullish engulfing pattern, and how to use it as a reversal signal. This pattern consists of two candlesticks. The first candlestick is a bearish candlestick. The second candlestick is a bullish candlestick. The body of the second candlestick completely engulfs the body of the first candlestick. The market must be in a downtrend. The second candlestick must fully engulf the first one. The long trade can be initiated […]