There are many candlestick patterns but
only a few are really worth necessary linkage. Here are 10 candlestick
patterns that you are better to know. Remember that these patterns are
only useful if you understand what is happening in each pattern.
They must be combined with other forms
of technical analysis to really be useful. For example, when you see one
of the patterns on the daily chart, move down to the hourly chart. Does
the hourly chart agree with your expectations on the daily chart? If
so, then it is likely to be an increase reversal.
The following pattern is divided into
two parts: Bullish patterns and bearish patterns. This is a reversal
pattern that emerged after the pullback (bullish patterns) or a rally
(bearish patterns).
Bullish candlestick pattern
Ok, let’s start with the first
Engulfing
It is one of the favorite candlestick pattern. This pattern consists of two candles. The first day is a narrow range candle / slim. The sellers still control the stock but because it has a variety of narrow range / slim and low volatility, sellers are not very aggressive. The second day candlestick chart is a rod that moves opposite from the first day and had to “swallow” the body of the first candle and closed chart near the top of the range of first’s chart. This indicates that the demand has been greater than the supply. Buyers are ready to take over these shares.
It is one of the favorite candlestick pattern. This pattern consists of two candles. The first day is a narrow range candle / slim. The sellers still control the stock but because it has a variety of narrow range / slim and low volatility, sellers are not very aggressive. The second day candlestick chart is a rod that moves opposite from the first day and had to “swallow” the body of the first candle and closed chart near the top of the range of first’s chart. This indicates that the demand has been greater than the supply. Buyers are ready to take over these shares.
Hammer
As discussed in the previous pages, the stock opened, and then at some point the sellers took over and pushed stocks lower. At the end of the day, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a bunch of stop loss orders are hit. That’s when professional traders come to pick up stocks at lower prices.
As discussed in the previous pages, the stock opened, and then at some point the sellers took over and pushed stocks lower. At the end of the day, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a bunch of stop loss orders are hit. That’s when professional traders come to pick up stocks at lower prices.
Harami
When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On the first day you see a wide range candle that closes near the bottom of the range. The sellers still controlthe stock. Then on the second day, there is only a narrow candle that closes for the day. Note: Do not confuse this pattern with the engulfing pattern. The candles are opposite!
When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On the first day you see a wide range candle that closes near the bottom of the range. The sellers still controlthe stock. Then on the second day, there is only a narrow candle that closes for the day. Note: Do not confuse this pattern with the engulfing pattern. The candles are opposite!
Piercing
It is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near the bottom of the range. The sellers are in control. On the second day you see a wide variety of candle should close at least halfway into the prior candle. Those who shorted the stock on the first day are now sitting at a loss on the rally that occurred on the second day. It can make a strong reversal.
It is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near the bottom of the range. The sellers are in control. On the second day you see a wide variety of candle should close at least halfway into the prior candle. Those who shorted the stock on the first day are now sitting at a loss on the rally that occurred on the second day. It can make a strong reversal.
Doji
Doji candlestick pattern is probably the most popular. Stocks open and everywhere throughout the day and closes right at or near the opening price. Quite simply, it is the confusion and causes traders to question the current trend. This can often trigger reversals in the opposite direction. Learn more about how to trade candlestick doji pattern.
Doji candlestick pattern is probably the most popular. Stocks open and everywhere throughout the day and closes right at or near the opening price. Quite simply, it is the confusion and causes traders to question the current trend. This can often trigger reversals in the opposite direction. Learn more about how to trade candlestick doji pattern.
Bearish candle stick pattern
You will notice that the entire bearish
pattern is the opposite of the bullish pattern. These patterns come
after a rally and signify a reversal of the possibility of such a
bullish pattern.
Ok, now it’s your turn! I will let you know what is happening in each
pattern at the top of this cause is considered bearish. Look at every
candle and try to get into the minds of the traders involved in the wax.
kickers
There is one more pattern worthy of mention. A “kicker” is sometimes referred to as the most powerful candlestick pattern of all.
There is one more pattern worthy of mention. A “kicker” is sometimes referred to as the most powerful candlestick pattern of all.
You can see in the chart above why this pattern is so explosive. As
most candle patterns there are bullish and bearish versions. In the
bullish version, the stock moves down and the last red candle closes at
the bottom of the range.
Then, the next day, the stock gaps open above the previous days high
and close. This “shock event” forces short sellers to cover and bring
new traders on the long side.
This was reversed in the bearish version.
Is it necessary to wait for confirmation?
Most traders are taught to “awaiting confirmation” candlestick
pattern. This means that they have to wait until the next day to see if
the stock reversed afterwards. This is absolutely ridiculous!
I can not wait ‘no sting’ confirmation!
If stocks pull back to the area of demand (support) and I have a
candlestick pattern that told me that the buyer is taking a controlling
stake, then it is all the confirmation I need.
As a swing trader I have to go before the crowd’s pile, not when they
are already entered! In other words, I want to be one of the merchants
that make up the pattern yourself! It is low risk, but it has a high
possibility to play.
From http://hikamirzan.com
1 komentar:
Thank you for this article. I found this very interesting. I've been working with a related approach using classification algorithms based on the three parts of the candlestick (upper /lower shadow and body). Your text triggered some ideas... candlesticks chart
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