Sabtu, 24 April 2010

Candlestick patterns

Content of Candlestick patterns section:

* Basic patterns
* Reversal patterns
* Continuation patterns
* Single candle patterns

Japan gave birth to candlestick charts more than five hundred years ago. The technical analysis was first used by the Japanese in late 1600s at Dojima Rice Exchange while trading rice. The first trader who has reached the fortune by forecasting prices using the past price data was Munehisa Homma, a famous trader of this exchange. Homma has created a number of principles that are used in Japan nowadays. The set of data containing open price, high price, low price, and close price is traced in the chart as a candlestick.

The candlestick turns hollow (white or in some cases green) if the close price exceeds the open price. A filled (black or red) candlestick is seen when the open price exceeds the close one. The body (either filled or hollowed) of the candlestick is formed out of the difference between the open price and close price whether the shadows, which are thin lines at the top and at the bottom of the candlestick, give the information about the trading range during the candlestick's period. The upper shadow ends at the level showing the high price of the period and the lower shadow ends at the level of low price.

Technicians use candlesticks. Such popularity of candlesticks can be explained by their pleasant and comfortable outlook unlike any other techniques using bar or line charts. Candlestick chart can give some additional info about the prices concerning the correlation between the high and low and the open and close. Candlestick charts uncover the data of the possible market strength as well as of its overall structure. You should remember only 12 general patterns concerning Candlesticks. There are about 40 patterns of reversal and continuation that can be trading signals for you while using Japanese Candlesticks. Any of these patterns may possibly predict future price movement. This dozen signals are the ones you are likely to remember.

Most investors consider only these signals of Japanese Candlesticks usage enough for planning profitable trading decisions. They are the ones that watched by most of the traders most of the time. But reading this you shouldn't think that other patterns don't worth your attention. You can effectively make profits in case you follow these other signals. But they occur really seldom in actual trading. Their showings are thought to be not as reliable as of the major ones despite they can show very strong possibility of reversal. The pattern when open and close prices are equal of very close is called Doji. In this situation shadows length is not taken into consideration. Japanese explain this situation as the conflict of bears and bulls. Doji indicates the general hesitation of investors. The Gravestone Doji appears when both close and open become the low of the day. This is the sign of possible tops despite it's located in the market bottoms. This signal looks like a gravestone, that's why it is called Gravesone Doji.

When the candlestick has one or two very long shadows, the situation is called the Long-legged Doji. It signalizes that the market has reached its tops. The Rickshaw Man occurs when the open and close are located in the session's trading range middle. It is thought that this situation shows the trend losing its direction. The end of the downtrend forms the Bullish Engulfing Pattern. The white candlestick has its open price below and the close price above the ones of the previous day black candle body. This total exceeding of the previous day's values says that that the enormous pressure of the buyers overcomes the one of the sellers. The Bearish Engulfing Pattern is an opposite process to the bullish one. It occurs when an uptrend comes to an end. The black body of an actual candlestick gets longer than the white body of the previous day one. This process is the sign of the bears winning. When a bearish pattern lasts for two days and reaches the end of an upturn as well as the highest level of an overloaded are of trading, then the Dark Cloud Cover occurs. In this case the first day gives a reliable white candlestick and the second day opening price exceeds any of the values of the previous day.

The bottom reversal may be accompanied by the Piercing Pattern. It consists of two candlestick patterns that are located at the declining market end. The candlestick of the first day is black whether the one of the second day corresponds a long white candlestick. This day has an extreme low opening price that is even lower that any price traded the day before. The patter closes at a price which is higher than the middle of the "black day" candle.

If candlesticks have long shadows at their bottom along with the small size of real bodies, it is called Hammer and Hanging-man. These bodes form high price of the session. A Hammer occurs when the pattern described here takes place when the market trends down. This shows the trends looking for the base. Japanese call this process "trying to gauge the depth" or takuri.

In case the market is trending down, the Shooting Star Formation is a signal of bullish market approaching. This is also called an inverted hammer. Still, you should be patient until the bullish market gets verified. Now after we have learnt about some major signals, it is time to see how useful some other formations may be.

--

Candlestick Charting Potential Risks

* by Maestro in Forex Trading
*


Read this shocking 40 page FRWC Brutal Truth FREE Report that exposes everything about forex robots. Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade. Master these Candlestick Patterns with this 82 page FREE PDF Candlestick Guide. Candlestick charts is a visual representation of the battle between the bulls and the bears that takes place in the market. It takes time for this battle to take shape. Candlestick patterns on the very short timeframes used for scalping and some other day trading strategies may not give signals that can be properly interpreted and traded.

In the last decade electronic trading has become highly popular. What this means is that significant volume of the trading takes place outside of the regular market hours. This trading can cause patterns that don’t reflect the full picture to appear on a candlestick chart.

For example, stock ABC trades on NYSE. NYSE officially opens at 9:30 AM EST for trading. Stock ABC open price is $60 per share. However, this stock had been trading on the electronic network in the pre-market hours as low as $59. Now the open on the NYSE may not be a true reflection of where the stock had been trading initially on that day.

What this means is that the open recorded on the candlestick chart is not accurate. Now, suppose the stock ABC never trades down to $59 during the day. So, the low on the candlestick chart may not be an accurate depiction of the day’s price action.

So candlestick charts on very short time frame may not be able to produce accurate trading signals. Couple this with the fact that most of the trading now also takes place on the electronic networks makes them somewhat inaccurate sometimes. These are the two risks or what you may call limitations that you need to keep in your mind.

Apart from that candlestick chart is a powerful tool in the hands of an experienced trader. When an experienced trader combines these charts with technical indicators, this combination can produce highly accurate trading signals.

There are many candlestick patterns that can be used to produce buy and sell signals. Some of these candlestick patterns are simple while others are complex. Single stick candlestick patterns can be easily spotted while double stick and three stick candlestick patterns can take two to three days to develop. Mastering these candlestick patterns is what you need to do as a serious trader.

Now Yahoo Finance is an excellent free resource that you can use to create candlestick charts for any stock by just entering the stock ticker symbol. You should play around with the options available for Yahoo Finance. This will help you to learn a lot of new things about candlestick charts.

--

Dragonfly Doji Candlestick Pattern Is Highly Profitable!
Edit Article | Posted: Mar 04, 2010 | Comments: 0 | Views: 98 | Bookmark and Share
Ads by Google

Start Forex Trading
Begin Trading The Forex Market with a Free $50k Practice Account.
www.FXDD.com

Chart Analysis For Free
Articles predicting movements before they happen!
ShadowEquities.com

Serius Bertrading Forex ?
Pilihlah perusahaan yg Benar+Aman. Masuk ke ECNpro.com u/ dibandingkan
www.ECNpro.com

Learn Price Action Forex
Learn Price Action with Nial Fuller Free Videos, Forum, Tutorials
www.LearnToTradeTheMarket.com
Syndicate this Article
Copy to clipboard

Dragonfly Doji Candlestick Pattern Is Highly Profitable!

By: Ahmad Hassam

About the Author

Mr. Ahmad Hassam has done Masters from Harvard. Read this 49 page Quantum Swing Trading FREE Report plus the shocking Profit Button FREE Report that applies no matter what you trade-stocks, forex, futures or options! Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade!

(ArticlesBase SC #1940237)

Article Source: http://www.articlesbase.com/ - Dragonfly Doji Candlestick Pattern Is Highly Profitable!



A Doji Candlestick Pattern is very easy to spot but it forms rarely when the opening and the closing prices of a security or a currency pair are the same. So there is no stick on the Doji Candlestick Pattern. It is all wicks with no candle body. In essence, a Doji Pattern looks like a cross. There are a few variation to this important pattern. Read this article to know more how profitable this pattern can be.

For a Doji to be created, a trading day must begin and end with the same price. A whole lot of trading takes place during the day but when it is all said and done, the security price is right back where it had started in the morning.

When a Doji is formed with the opening and the closing prices equal or the same, it is a signal that the battle between the bulls and the bears had beena draw during the trading day. Soon, either the bulls or the bears are going to previal. In other words, a trend reversal is about to take place.

A Dragonfly Doji pattern is unique in the sense that the opening, closing and the high prices are all the same or equal. A Dragonfly Doji is formed when the stocks opens, trades down during first part of the day. During some part of the day, the price starts to climb again and eventually closing on the high which is the same as the open.

When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.

The low of the Dragonfly Doji can be considered a near term support level because it is clear that the buyers stepped in at that level and turned the trend from down to up. Dragonfly Doji is a bullish candlestick pattern.

A bearish Gravestone Doji Pattern is formed when the open and close of the day is equal to the low of the day. This is the most bearish of the Doji patterns. A bearish Gravestone Doji pattern signals the start of a prolonged downtrend in the security price.

A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.

Read more: http://www.articlesbase.com/finance-articles/dragonfly-doji-candlestick-pattern-is-highly-profitable-1940237.html#ixzz0m1jg9rXq
Under Creative Commons License: Attribution


--

Doji Candlestick Pattern-Something Unique And Highly Profitable!
Thursday, April 1st, 2010

Learn this powerful Fibonacci Retracement method FREE that pulls 500+ pips per trade. Download this 1 Minute Forex Trading System FREE that makes money instantly anytime. Master these Candlestick Patterns with this 82 page FREE PDF Candlestick Guide. A Doji Candlestick Pattern is formed when the opening and the closing prices are the same. So, there is no stick on the candlestick. There are some variations but essentially a Doji is almost all wicks with no body. A Doji looks more like a cross rather than a candlestick pattern.

For a Doji to be created, a trading day must begin and end with the same price. A whole lot of trading takes place during the day but when it is all said and done, the security price is right back where it had started in the morning.

What’s so special about the Doji pattern? The special thing about this pattern is that it is a signal that the market is about to turn. Doji is an indication that the battle between the bulls and the bear has been equal. The day ended with a draw between the bulls and bears but the next day one side is going to overpower the other.

A Dragonfly Doji pattern is unique in the sense that the opening, closing and the high prices are all the same or equal. A Dragonfly Doji is formed when the stocks opens, trades down during first part of the day. During some part of the day, the price starts to climb again and eventually closing on the high which is the same as the open.

When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.

The low of the Dragonfly Doji can be considered a near term support level because it is clear that the buyers stepped in at that level and turned the trend from down to up. Dragonfly Doji is a bullish candlestick pattern.

A bearish Gravestone Doji Pattern is formed when the open and close of the day is equal to the low of the day. This is the most bearish of the Doji patterns. A bearish Gravestone Doji pattern signals the start of a prolonged downtrend in the security price.

A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.


--

Dragonfly & Gravestone Doji Candlestick Patterns- A Rare But Highly Profitable Patterns!
By Ahmad Hassam
Mar 8, 2010
A Doji Candlestick Pattern is very easy to spot but it forms rarely when the opening and the closing prices of a security or a currency pair are the same. So there is no stick on the Doji Candlestick Pattern. It is all wicks with no candle body. In essence, a Doji Pattern looks like a cross. There are a few variation to this important pattern. Read this article to know more how profitable this pattern can be.

So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.

What's so special about the Doji pattern? The special thing about this pattern is that it is a signal that the market is about to turn. Doji is an indication that the battle between the bulls and the bear has been equal. The day ended with a draw between the bulls and bears but the next day one side is going to overpower the other.

Now, a Dragonfly Doji is a unique variation to the Doji Candlestick Pattern. It is formed when the opening, the closing and the high prices are all equal. Something quite rare and unique. So how is a Dragonfly Doji is formed? It is formed when the security price opens. It is traded down during the early part of the day. At some point in the trading day, the price action starts to recover and climb. It eventually closes at the high which happens to equal the open of the day. Something unique!

When a Dragonfly Doji is formed, bears initially decide to rule the market. But at some point the bulls step in and decide to buy again. When the bulls step in, they start pushing the price up. As the bulls dominate the trading day, the security price ends up right where it had started.

The low of the Dragonfly Doji can be considered a near term support level because it is clear that the buyers stepped in at that level and turned the trend from down to up. Dragonfly Doji is a bullish candlestick pattern.

A bearish Gravestone Doji Pattern is formed when the open and close of the day is equal to the low of the day. This is the most bearish of the Doji patterns. A bearish Gravestone Doji pattern signals the start of a prolonged downtrend in the security price.

A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.

--

Understanding Candlestick Patterns (Part II)

* by Maestro in Forex Trading
* Leave a Comment


Understand candlestick patterns.The Bearish Gravestone Doji: A Doji is created when the opening and closing prices of the day are the same. However, when the opening and closing prices of the day are equal to the low of the day, the most bearish of Doji, the Gravestone Doji is formed.Learn forex trading and develop your own forex trading system.

These were some single stick patters that were most basic and easy to identify. Not all single stick patterns are straightforward. Some extremely useful single stick patterns rely heavily on their location on a chart.

A variety of single stick patterns can provide some terrific trading opportunities if you can spot them in the right market environment. Making yourself familiar with these candlestick patterns and how to identify and trade based on them is another way that you can add a versatile weapon to your trading arsenal.

We have talked about Dojis. Dojis are often associated with the reversal of the trend. Dojis can serve as outstanding reversal indicators. It could very well indicate that the trend maybe changing to a downtrend soon if a Doji appears in an uptrend, especially if it is a Gravestone Doji. Similarly for a downtrend!

The Long Legged Doji: A long legged Doji features a small stick with very long wicks on either side. The small candle on a long legged Doji is normally located very close to the center of the candlestick.

A long legged Doji is considered a reversal signal when appearing in an uptrend or a downtrend. This Doji indicates that there was a lot of uncertainty in the market after a period of directional certainty. This change of conviction often results in the change of trend.

The Spinning Top: A spinning top is formed when a candlestick has a small body and wick stick out on both ends. The body should appear to the center of the range of the day’s price action. The wicks should also be as wide as the candle section of the candlestick.

The spinning top is another pattern that depends on the market context and reveals a tight battle between the bulls and the bears like Doji. Eventually one side have to give in whenever, there is a close battle between the bulls and the bears. An explosive move in one direction is possible when this happens.

The spinning tops make frequent appearances. Dojis appear very rarely. However, like Dojis, the spinning tops are nice indicators that the trend is about to end and reverse itself.

Belt Holds: There are two types of belt holds: bullish belt hold and bearish belt hold pattern. Bullish belt hold pattern features an open equal to the low and a close near the high which leaves a small wick near the top of the candle.

Bearish belt holds on the other hand opens on their highs and close near their lows, thus leaving a small wick near the bottom of the candle. Belt holds also depend on market context and are excellent trend reversal signals.
Tags: bearish candlestick patterns, bullish candlestick patterns, dragonfly doji candlestick patterns, gravestone doji candlestick pattern, japanese candlestick patterns
Jul 10 2009
Candlestick Patterns (Part III)

* by Maestro in Forex Trading
* Leave a Comment


Understand candlestick patterns.Hanging Man & the Hammer: The hammer or the hanging man is identified by the small candle that appears at the very top of the pattern! There is usually a pretty long wick at the bottom. If you see this pattern at the bottom of a downtrend, you are looking at a hammer. If it appears at the top of the uptrend, it is considered a hanging man. Learn forex trading and develop your own forex trading system.

If a hammer appears in a downtrend, you wouldn’t trade on it if the opening price on the next trading day is higher than the hammer’s close. Similarly, if you think you have a hanging man appearing in an uptrend, you wouldn’t trade on it unless it is confirmed the next day with an opening price lower than the previous close.

Double stick patterns depend on two days. The first day is called the set up day and the second day is called the signal day. Compared to single stick patterns, double stick patterns are difficult to come by. But these patterns can be very powerful and profitable if you put in the time and effort to monitor them.

Bullish Engulfing Pattern: The first double stick pattern is the bullish engulfing pattern. The name comes from the fact that the signal day engulfs the pattern day. Both the wick and the body of the second day completely cover the same ground as the first day. The setup day candle should be bearish and the signal day candle should be bullish bigger than the last day bearish candle.

Bullish Harami: A Harami is a two day pattern with the candle of the setup day than the candle of the signal day. The first day is very bearish and occurring in a downtrend. However, on the second day bulls take over. This signals reversals of a downtrend that culminated in a downtrend.

Harami Cross: Harami Cross is a special variant of the Harami. It involves a Doji pattern and should always be considered an indicator of the potential reversal. A Harami Cross can also be bullish or bearish. Bullish Harami Cross appears during a downtrend. Its setup date is a black long candle. Its signal day is a Doji. Similarly, a bearish Harami is considered to indicate end of an uptrend.

Inverted Hammer: Inverted hammer can be bullish or bearish. A bullish inverted hammer pattern occurs in a downtrend. The first day is a bearish candle. The signal day is an inverted hammer. The bullish inverted hammer is a fairly rare pattern.

Bullish Doji Star: The bullish doji star is very similar to a bullish inverted hammer. It occurs in a downtrend and signals that the bulls have had enough. A bullish doji pattern is a two day pattern with the doji appearing on the signal day during a downtrend.

Meeting Line: This pattern is another signal that a trend reversal is about to take place. In case of a bullish meeting line, the setup day is a long black candle and the signal day is a long white candle.

Piercing Line: A piercing line can be bullish or bearish! The bullish piercing line consists of a long black candle on the setup day followed by a long white candle on the signal day. The open of the signal day should be lower than the low of the setup day. Likewise, in case of a bearish piercing line a white candle is followed by a black candle.

--

Candlestick Charting is one of the most powerful tools in the trading arsenal of any trader. Candlestick Charts apply to any market no matter what you trade-stocks, forex, futures, options, ETFs, commodities, bonds and others. With one simple glance on the chart, you can figure out the sentiment of the buyers and sellers in the market. There are many candlestick patterns that are used as trading signals. Some are simple while others are complex. Doji Candlestick Pattern is a simple pattern that is very easy to spot. It has no body. It is formed when the opening and the closing prices are the same. So, this pattern is all wicks with no stick. It literally looks like a Cross on the chart. So you can easily spot it. But it is very rare as the security opening and closing prices are seldom equal! Doji has some variations. We will discuss these variations in this article!

So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.

When a Doji is formed with the opening and the closing prices equal, it is a signal that the battle between the bulls and the bears had been a draw during the trading day. Soon, either the bulls or the bears are going to previal. In other words, a trend reversal is about to take place.

Now, a Dragonfly Doji is a unique variation to the Doji Candlestick Pattern. It is formed when the opening, the closing and the high prices are all equal. Something quite rare and unique. So how is a Dragonfly Doji is formed? It is formed when the security price opens. It is traded down during the early part of the day. At some point in the trading day, the price action starts to recover and climb. It eventually closes at the high which happens to equal the open of the day. Something unique!

So when a Dragonfly Doji Pattern is formed, the bears had been in control of the market at the start. But at some point in the trading day, the bulls become active and step in. Bulls start buying. This takes the prices up and at the end of the day, the security price ends up right where it had started. In other words, the open, the close and the high for the day are the same.

Dragonfly Doji is considered to be a bullish candlestick pattern. The low on this pattern can be taken as the support level because this was the level at which the bears entered the market and started buying.

When a Bearish Gravestone Doji Pattern is formed, it is a signal that a prolonged downtrend is about to start in the market. The second important variation to the Doji is the Bearish Gravestone Doji. This pattern is formed when the open and close of the day is equal to the low of the day. This is something opposite to the Dragonfly Doji where the open, the close and the high were equal.

When Doji Pattern does form, get ready for a trend change! As said before, this pattern is rare but very easy to spot on the chart.

--

Understanding Online Forex Trading Candlestick Charts

In candlestick charts, as in many other charts, you get the open, close, high and low (OHLC) of the online Forex prices, for the time frame you chose earlier.

Forex trading Candlestick charts are possibly the most readable charts available for technical analysis in the online Forex, and they have been in operation, since they were invented in Japan, during the 18th century.

Real Body - The broad part of the candlestick chart figure is called the real body. This part displays the range between the open and the close price. If the Forex currency's close is lower than the open, then the real body appears in the color red. Otherwise, if the close price is higher than the open price, the real body appears in blue.

Shadows - These are the thin lines that come out of the real body of the candlestick chart figure. The shadows represent the extreme prices. The upper shadow, which is above the real body, has a peak that signifies the session's high. The bottom of the lower shadow, that appears below the real body, is the Forex session's low.

One of the biggest advantages of candlestick charts, is that with only one glance, you can observe a lot of information about the online Forex trading currency movement. This information would not be otherwise available to you using other charts. Most importantly, you can notice the difference between the open and close prices of the online Forex. If you notice a red candlestick, it can serve as a warning about the direction of the currency price. Traders of the online Forex market need to pay special attention to such changes of direction in currency price, in order to protect their investment.

Doji - A Candlestick chart figure with no real body is called Doji. A Doji means the open and close prices for that timeframe are the same, and the supply and demand forces are in balance in the online Forex market.

Following are other basic candlestick chart behaviors that can give you insight into how to act next with your Forex trading order.

* A long green real body signifies the bulls are in charge.
* A long red real body means the bears are in charge in the candlestick chart.
* A small real body means there is a tug of war between the bulls and the bears, and could signify a change in market direction.
* A long upper shadow displays the market has rejected higher prices.
* A long lower shadow is a candlestick chart, that shows the market has rejected lower prices.

It is very important to analyze as many candlestick charts before placing you Forex trading order. This has been the basic information every trader of online forex should know before making currency trades, and you can now move on and read more about candlestick chart patterns and more advanced topics.
-
Learning About the Stock Market Using The Hammer Signal



Learning about the stock market for personal stock market investing can be very costly if not approached in the right manner. Attributes built into candlestick charts greatly reduce the potential of losses while learning about the stock market. The knowledge conveyed in just one of the 12 major signals helps investors understand the dynamics of what makes price move. This is true for investors that are just learning about the stock market all the way up to experienced traders. The candlestick charts are in use today because they have worked effectively throughout the centuries. Japanese Rice traders recognized that investor sentiment operates in reoccurring patterns. They recognized candlestick charts provided patterns that would reoccur as a trend was about ready to reverse. This became valuable information. The psychological elements that are incorporated into the major candlestick signals makes learning about the stock market easier and more profitable.

Out of a universe of 50 to 60 candlestick reversal signals, it has been found that only 12 of the signals require attention. These 12 major signals will provide more trade situations than most investors will be able to utilize. The insights gained from dissecting each of the 12 major signals becomes a valuable tool for learning about the stock market. The common complaint for most investors learning to read candlestick charts was there were too many candlestick signals. When learning the stock market, an investor wants a proven investment technique. Candlestick charts produces a very strong trading platform the candlestick signals have proven themselves to work. The question is not whether they work or not, the question is whether somebody can learn how to use them correctly. The Candlestick Forum is a stock market education site that takes candlestick charts and individual candlestick signals and reduces the information down to the basic elements. If each signal is dissected and studied, the information that the signal conveys will become a powerful investment tool for the rest of your life. The knowledge presented in Candlestick Charts makes learning the stock market, or any other trading market, much easier to understand. Each signal provides an immense amount of information.

One of the most visually compelling signals is the Hammer signal. The hammer signal is easily recognized by the lower shadow ( the tail ) protruding to the downside after an extended downtrend.

HAMMERS AND HANGING MAN



Description

The Hammer is comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. Found at the bottom of a downtrend, this shows evidence that the bulls started to step in. The color of the small body is not important but a white candle has slightly more bullish implications than the black body. A positive day is required the following day to confirm this signal.

Criteria

1. The lower shadow should be at least two times the length of the body.
2. The real body is at the upper end of the trading range. The color of the body is not important although a white body should have slightly more bullish implications.
3. There should be no upper shadow or a very small upper shadow.
4. The following day needs to confirm the Hammer signal with a strong bullish
day.


Signal Enhancements

1. The longer the lower shadow, the higher the potential of a reversal occurring.
2. A gap down from the previous day's close sets up for a stronger reversal move provided the day after the Hammer signal opens higher.
3. Large volume on the Hammer day increases the chances that a blow off day has occurred.

Pattern Psychology

After a downtrend has been in effect, the atmosphere is very bearish. The price opens and starts to trade lower. The bears are still in control. The bulls then step in. They start bringing the price back up towards the top of the trading range. This creates a small body with a large lower shadow. This represents that the bears could not maintain control. The long lower shadow now has the bears questioning whether the decline is still intact. A higher open the next day would confirm that the bulls had taken control.

-

Understanding Bearish Candlestick Charting for the Forex Trading Market

A Bearish market happens when prices for the online Forex market are declining. In bearish candle charting we try to foresee when the market will drop.
The Shooting Star

The shooting star is a bearish signal that can be identified by the following characteristics:

* It has an upward trend preceding the shooting star.
* It consists of a candle line with a long upper shadow, and a small red or green upper body. The line either has a very small lower shadow, or has no shadow at all.

After noticing a shooting star, you can expect a bearish market to appear.
The Bearish Engulfing Pattern

This pattern is recognizable when you notice a long red body that follows a small green body, and engulfs it. This pattern can point to the fact that the bullish trend has tired, and that a bearish trend is nearing.
The Dark Cloud Cover

This reversal pattern consists of two candle lines.

* The first candle line of the dark cloud cover is a line with a long green body.
* The second line opens above the previous candle's high price.
* The closing price for the second candle line is close to the market's low point, and it is also within the range of the prior candle line's green body.

The Evening Star

This is a top reversal pattern, made out of three candle lines, and is the opposite of the bullish morning star. The evening star occurs when there is a bullish market. This is followed by a long green candle. Then appears a small real body of red or green color, which is out of the range of the previous green body. The third candle has a red body that closes inside the range of the first candle.
Windows in Candlestick Charts

The window is similar to the gap in bar charts. There could be rising windows or falling windows.

A rising window occurs when the top of the previous upper shadow is lower than the next lower shadow.

A Falling window occurs when the previous low shadow is above the top of the next candle's upper shadow.

both types of windows suggest that the market may have exhausted its rising/falling trend, and is going to change direction.

Trudy Bates - Market Expert

--

Japanese Candlestick Patterns
Descriptions and explanations of the japanese candlestick patterns, with examples of how each of the patterns are used in trading.
Long Belt Hold
Description of the japanese candlestick pattern known as a long belt hold, with an explanation of what the candlestick pattern means in trading.
Short Belt Hold
Description of the japanese candlestick pattern known as a short belt hold, with an explanation of what the candlestick pattern means in trading.
Sponsored Links

Candlestick ChartsAnalyze the Market Like a Pro. VIP Service for Professional Traders! www.Easy-Forex.com

Forex Day TradingFully Regulated Broker.Demo Account Deposit from $10. Forex Analytics. www.AtlaseForex.com/Indonesia

DayTrade Futures and moresimple, easy, profitable method Let us make you a better trader BlooMoonTrading.com
Doji
Description of the japanese candlestick pattern known as a doji, with an explanation of what the candlestick pattern means in trading.
Dragonfly Doji
Description of the japanese candlestick pattern known as a dragonfly doji, with an explanation of what the candlestick pattern means in trading.
Gravestone Doji
Description of the japanese candlestick pattern known as a gravestone doji, with an explanation of what the candlestick pattern means in trading.
Hammer
Description of the japanese candlestick pattern known as a hammer, with an explanation of what the candlestick pattern means in trading.
Hanging Man
Description of the japanese candlestick pattern known as a hanging man, with an explanation of what the candlestick pattern means in trading.
Long Day
Description of the japanese candlestick pattern known as a long day, with an explanation of what the candlestick pattern means in trading.
Short Day
Description of the japanese candlestick pattern known as a short day, with an explanation of what the candlestick pattern means in trading.
Long Marubozu
Description of the japanese candlestick pattern known as a long marubozu, with an explanation of what the candlestick pattern means in trading.
Short Marubozu
Description of the japanese candlestick pattern known as a short marubozu, with an explanation of what the candlestick pattern means in trading.
Spinning Top
Description of the japanese candlestick pattern known as a spinning top, with an explanation of what the candlestick pattern means in trading.
Bearish Abandoned Baby
Description of the japanese candlestick pattern known as a bearish abandoned baby, with an explanation of what the candlestick pattern means in trading.
Bullish Abandoned Baby
Description of the japanese candlestick pattern known as a bullish abandoned baby, with an explanation of what the candlestick pattern means in trading.
Bearish Advance Block
Description of the japanese candlestick pattern known as a bearish advance block, with an explanation of what the candlestick pattern means in trading.
Bearish Dark Cloud Cover
Description of the japanese candlestick pattern known as a bearish dark cloud cover, with an explanation of what the candlestick pattern means in trading.
Bearish Deliberation
Description of the japanese candlestick pattern known as a bearish deliberation, with an explanation of what the candlestick pattern means in trading.
Bearish Doji Star
Description of the japanese candlestick pattern known as a bearish doji star, with an explanation of what the candlestick pattern means in trading.
Bullish Doji Star
Description of the japanese candlestick pattern known as a bullish doji star, with an explanation of what the candlestick pattern means in trading.
Bearish Engulfing
Description of the japanese candlestick pattern known as a bearish engulfing, with an explanation of what the candlestick pattern means in trading.
Bullish Engulfing
Description of the japanese candlestick pattern known as a bullish engulfing, with an explanation of what the candlestick pattern means in trading.
Bearish Evening Doji Star
Description of the japanese candlestick pattern known as a bearish evening doji star, with an explanation of what the candlestick pattern means in trading.
Bearish Evening Star
Description of the japanese candlestick pattern known as a bearish evening star, with an explanation of what the candlestick pattern means in trading.
Bearish Harami
Description of the japanese candlestick pattern known as a bearish harami, with an explanation of what the candlestick pattern means in trading.
Bullish Harami
Description of the japanese candlestick pattern known as a bullish harami, with an explanation of what the candlestick pattern means in trading.
Bearish Harami Cross
Description of the japanese candlestick pattern known as a bearish harami cross, with an explanation of what the candlestick pattern means in trading.
Bullish Harami Cross
Description of the japanese candlestick pattern known as a bullish harami cross, with an explanation of what the candlestick pattern means in trading.
Inverted Hammer
Description of the japanese candlestick pattern known as an inverted hammer, with an explanation of what the candlestick pattern means in trading.
Bullish Homing Pigeon
Description of the japanese candlestick pattern known as a bullish homing pigeon, with an explanation of what the candlestick pattern means in trading.
Bearish In Neck
Description of the japanese candlestick pattern known as a bearish in neck, with an explanation of what the candlestick pattern means in trading.
Bearish Kicking
Description of the japanese candlestick pattern known as a bearish kicking, with an explanation of what the candlestick pattern means in trading.
Bullish Kicking
Description of the japanese candlestick pattern known as a bullish kicking, with an explanation of what the candlestick pattern means in trading.
Bullish Matching Low
Description of the japanese candlestick pattern known as a bullish matching low, with an explanation of what the candlestick pattern means in trading.
Bearish Meeting Lines
Description of the japanese candlestick pattern known as a bearish meeting lines, with an explanation of what the candlestick pattern means in trading.
Bullish Meeting Lines
Description of the japanese candlestick pattern known as a bullish meeting lines, with an explanation of what the candlestick pattern means in trading.
Bullish Morning Doji Star
Description of the japanese candlestick pattern known as a bullish morning doji star, with an explanation of what the candlestick pattern means in trading.
Bullish Morning Star
Description of the japanese candlestick pattern known as a bullish morning star, with an explanation of what the candlestick pattern means in trading.
Bearish On Neck
Description of the japanese candlestick pattern known as a bearish on neck, with an explanation of what the candlestick pattern means in trading.
Bullish Piercing Line
Description of the japanese candlestick pattern known as a bullish piercing line, with an explanation of what the candlestick pattern means in trading.
Bearish Separating Lines
Description of the japanese candlestick pattern known as a bearish separating lines, with an explanation of what the candlestick pattern means in trading.
Bullish Separating Lines
Description of the japanese candlestick pattern known as a bullish separating lines, with an explanation of what the candlestick pattern means in trading.
Shooting Star
Description of the japanese candlestick pattern known as a shooting star, with an explanation of what the candlestick pattern means in trading.
Bearish Three Black Crows
Description of the japanese candlestick pattern known as a bearish three black crows, with an explanation of what the candlestick pattern means in trading.
Bullish Three White Soldiers
Description of the japanese candlestick pattern known as a bullish three white soldiers, with an explanation of what the candlestick pattern means in trading.
Bearish Thrusting
Description of the japanese candlestick pattern known as a bearish thrusting, with an explanation of what the candlestick pattern means in trading.
Bullish Tri Stars
Description of the japanese candlestick pattern known as a bullish tri stars, with an explanation of what the candlestick pattern means in trading.
Bearish Tri Stars
Description of the japanese candlestick pattern known as a bearish tri stars, with an explanation of what the candlestick pattern means in trading.
Bearish Two Crows
Description of the japanese candlestick pattern known as a bearish two crows, with an explanation of what the candlestick pattern means in trading.
Bullish Unique Three River Bottom
Description of the japanese candlestick pattern known as a bullish unique three river bottom, with an explanation of what the candlestick pattern means in trading.
Bearish Upside Gap Two Crows
Description of the japanese candlestick pattern known as a bearish upside gap two crows, with an explanation of what the candlestick pattern means in trading.


--

1 komentar:

  1. I would like to suggest that you go with the most recommended Forex broker: AvaTrade.

    BalasHapus