www.ForexPowerTradingSystem.com – Trading Candlestick Patterns. Candlestick Trading Series video 1 – Understanding and trading candlesticks as they apply to the Forex market. We will cover the most basic to advanced trading patterns.
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Teaching the fundamentals of Candlesticks and how they could be used to enhance your trading activity. In the second video you will learn Patterns that Candlesticks form. Those included are: » Spinning Top » Doji » Bearish Engulfing Pattern » Bullish Engulfing Pattern » Dark Cloud Cover » Piercing Pattern » Bearish Harame » Bullish Harame » Hammer » Hanging Man » Morning Star – To download more Candlestick Videos, please go to: www.capitalor.com
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There are a lot of chart patterns that you can learn out there. There are so many of them. Some which I think is well known are:
Hanging man
Shotting star
Inverted hammer
Bullish and Bearish Engulfing
Bearish and Bearish Harami
Pearsing Line
Dark cloud
Abondoned Baby
Three White Soldiers and Three Black Crows
There are so much of them. How would you be able to master all of them? Trading should be simple right? They should be, so I created my own rule, which is quite conservative. Here are they:
Enter Buy position:
Break resistance.
Bullish Engulfing, when the white candlestick body is much bigger then the previous black candlestick body.
Close the Buy position:
Price is near the next resistance. I better quit near the next resistance because you wouldn’t know what will happened. It’s a 50:50 change, so I better close my position.
Candlestick closing price is lower than previous candlestick closing price.
Long upper tail, because this is signs that traders are pushing price lower.
Enter Sell position:
Break support.
Bearing Engulfing, when the black candlestick body is much bigger then the previous white candlestick body.
Close the Buy position:
Price is near the next support. I better quit near the next support because you wouldn’t know what will happened. It’s a 50:50 change, so I better close my position.
Candlestick closing price is higher than previous candlestick closing price.
Long lower tail, because this is signs that traders are pushing price higher.
Candlestick charts shows sets of data consist of open, high, low, and close values of each period. The hollow and filled section is called “the body”. The lines above or below “the body” is called shadows or tails. If the stock is closed higher than opening price, then a hollow candlestick is drawn. In addition, if the stock closed lower than the opening price, a filled candlestick is drawn. In a hollow candlestick where closing price is higher than opening price, the lower body slows opening price and the upper body shows closing price. In a filled candlestick where closing price is lower than opening price, the lower body slows closing price and the upper body shows opening closing price. Hollow means stock up and filled means stock down.
Various variation of candlestick are:
Marubozu is a candlestick that shows the high and low price represented by open and close price. When closing price is higher than opening price, then closing price is equal to high price. In addition, when closing price is lower than opening price, opening price is equal to high price. This candlestick indicates that the buyer controlled the price action from the opening to the closing.
Doji is a candlestick that shows the same opening price virtually equals to closing price. This pattern is a neutral signs, thus need future confirmation.
Dragon fly doji is a candlestick which shows the same open, high, close price. This pattern shows that seller dominated trading at first that drove the price lower. However, buyer then dominated the trading makes the price back to the opening level.
Gravestone doji is a candlestick which shows the same open, low, close price. This pattern shows that buyer dominated trading at first that drove the price higher. However, seller then dominated the trading makes the price back to the opening level.
