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Candlestick Analysis

what is The symmetrical triangle patternThe symmetrical triangle pattern is a technical analysis chart pattern that forms when the price of an asset is moving within a range, with the highs and lows converging towards each other. it is characterized by two trend lines that converge toward each other, forming a triangle. It is confirmed when the price breaks out of the triangle, either above the upper trend line (bullish) or below the lower trend line (bearish). Traders often look for a price target that is equal to the height of the triangle at its widest point, projected in the direction of the breakout. The symmetrical triangle pattern can be a reliable indicator of future price movement, but it should be used in conjunction with other technical analysis tools and market indicators. one can support the work by simply following BACTIFY and sharing the same with their friends all the best and happy trading
NSE:BPCLEducation
by pratik2358
dual top pattern explained in simple form The dual top pattern is a popular technical analysis pattern that can signal a potential trend reversal. This pattern is formed when the price of an asset reaches a resistance level twice and fails to break above it. The two peaks of the pattern look like two mountain tops that are approximately equal in height, with a dip or valley in between them. The neckline of the pattern is drawn by connecting the lows between the two peaks. A breakdown below the neckline is considered a sell signal, as it suggests that the price is likely to continue to decline. The dual top pattern is an important tool for traders because it can help to identify potential trend reversals. However, it's important to confirm the pattern with other indicators and analysis before making trading decisions. For example, traders might look for other technical signals such as a bearish divergence or a break below a key support level to confirm the dual top pattern. Additionally, traders may use fundamental analysis to gain insight into the underlying factors that are driving the price movement of the asset. Overall, the dual top pattern is a powerful tool for traders to identify potential trend reversals, but it's important to approach it with caution and to use other analysis techniques to confirm the signal before making trading decisions. In the below example, a newbie too would be able to learn and practice trend reversal using double top pattern Dual top pattern = potential trend reversal. Look for two mountain tops with a valley in between. The resistance level was reached twice but was not broken Draw the neckline by connecting lows between the peaks. A breakdown below the neckline = sell signal. Remember, the dual top pattern can be a powerful tool for traders to identify potential trend reversals, but it's important to confirm with other indicators and analysis before making trading decisions.
NSE:HDFCLIFEEducation
by pratik2358
1
SMC 2 trades 7.5 RR and 3.75 RR1 trade buy : I was looking for an order block on the 1 hour timeframe, I found a buy position, I waited for choch or bos to do it, then I entered the trade, it happened as expected, then I waited for an order block in the demand itself on the 1 minute timeframe as seen in the picture. 2 trade sell: In basically the same principle, I found an order block on a 1-hour timeframe, I waited for bos or choch to do it, when the price returned to the demand, I looked for an order block on a 1-minute timeframe and entered the trade.
Education
by ElonMusk555
1
Proximal and Distal Line Plotting For Supply and Demand ZonesProximal and Distal lines are important components of any Supply and Demand zone. One needs to plot two horizontal lines to mark Supply and Demand Zones. To know How to draw these lines, you need to understand Supply and Demand Zone formations. Proximity means nearest to the current price, while distal means farthest from the current price. What is the need to draw Proximal and Distal lines on a zone? As a Supply and Demand trader, one needs to know which price point to enter and where to exit. The proximal line is used to define the entry point into a trade, and the Distal line defines the Stopping Point. We place our stop losses slightly beyond the distal lines of the zones. Have a look at the above image Supply zones are located above the current market price and Demand zones are located below the current market price. In the illustration above, CMP is Rs.1668.3 The green-shaded zone below CMP is the Demand zone. It has two horizontal lines one at Rs.1607.65 which is nearer to the current price, and it forms the proximal line, whereas the other horizontal line is at Rs.1588.75 which is far away as compared to Rs.1607.65, so it constitutes the distal line of the demand zone The pink-shaded zone above CMP is the Supply zone. It has two horizontal lines one at Rs.1688 which is nearer to the current price, and it forms the proximal line, whereas the other horizontal line is at Rs.1702.4 which is far away as compared to Rs.1688, so it constitutes the distal line of Supply zone. How to Draw Proximal and Distal Lines for a Demand Zone A Demand zone is a designated area on a chart where Demand exceeds Supply, and there is a high likelihood of having pending Institutional Buy Orders. We look to enter long trades when the price retraces back to the demand zone, in doing so we also participate along with the Institutions which increases the probability of the trade working in our favour. So it's important to correctly identify the Proximal line and Distal line of a Demand Zone. Let u see how to mark the Proximal and Distal line of a Demand Zone Proximal Line Marking For A Demand Zone Irrespective of whether it’s a DBR or RBR Demand zone, the proximal line marking method remains the same. There are multiple ways to mark proximal lines, I will discuss the one that I follow and is widely used. While marking the proximal line we look at only the Base Candles, Proximal line is plotted at the Highest Wick of the base candles. Distal Line Marking For A Demand Zone There is a slight variation while marking distal lines, depending upon whether it’s a DBR or RBR Demand Zone Distal Line For DBR Demand Zone We need to consider all three components, Leg In, Base Candles & Leg Out. The distal line is plotted at the lowest point of the entire formation. Distal Line For RBR Demand Zone We need to ignore the Leg In and focus only on the Base candles and the Leg Out. The distal line is plotted at the lowest point of either the Base candles or the Leg Out, whichever is lower. How to Draw Proximal and Distal Lines for a Supply Zone A Supply zone is a designated area on a chart where Supply exceeds Demand, and there is a high likelihood of having pending Institutional Sell Orders. We look to enter Short trades when the price retraces back to the supply zone, in doing so we also participate along with the Institutions which increases the probability of the trade working on our favour. So it's important to correctly identify the Proximal line and Distal line of a Supply Zone. Let u see how to mark the Proximal and Distal lines of a Supply Zone Proximal Line Marking For A Supply Zone Irrespective of whether it’s an RBD or DBD Supply zone, the proximal line marking method remains the same. There are multiple ways to mark proximal lines, I will discuss the one that I follow and is widely used. While marking the proximal line we look at only the Base Candles, Proximal line is plotted at the Lowest Wick of the base candles. Distal Line Marking For A Supply Zone There is a slight variation while marking distal lines, depending upon whether it’s an RBD or DBD Supply Zone Distal Line For RBD Supply Zone We need to consider all three components, Leg In, Base Candles & Leg Out. Distal line is plotted at the highest point of the entire formation. Distal Line For DBD Supply Zone We need to ignore the Leg In, focus only on the Base candles and the Leg Out. Distal line is plotted at the Highest point of either the Base candles or the Leg Out, whichever is Higher. Conclusion In conclusion, the Proximal and Distal lines are critical components of the Supply and Demand Trading Strategy. Knowing how to properly place them is essential for the correct identification of zones. Supply and Demand Zone formations when combined with other factors like Trend, Location, and Quality attributes of the zone form a very sound rule-based Price Action Trading Strategy.
NSE:HDFCBANKEducation
by MAKTradingSchool
13
Rally Base Drop – Supply ZoneUnlike conventional Price Action Analysis, which relies on countless chart patterns, Supply Demand Strategy focuses only on four high-probability price formations. Rally Base Drop (RBD) is one of the four price formations which lay the foundation of the Supply Demand Trading Strategy. Rally Base Drop Pattern RBD is a reversal price pattern, which one can generally locate at market turning points. At areas where uptrends get exhausted and begin a new downward move. RBD occurs when prices have been rising, and peaking, followed by a sharp drop. This indicates that the sellers are now more aggressive and have overwhelmed the buyers to form a Supply Zone. Components of a Rally Base Drop Pattern This formation comprises three parts: 1. Leg-In Candle - Bullish Candle to the left-hand side of the base structure. It need not be an explosive candle. 2. Base Candles - Narrow range small-bodied candles which indicate that orders are potentially being accumulated by the institutions. 3. Leg-Out Candle – Huge Explosive Red candle with a sharp drop in price, which indicates the footprint of Institutional Selling activity. Steps to Identify a Rally Base Drop Pattern 1. Start with the Current Price on the Chart and go from Right to left 2. Look up and left until you find a strong Drop in the Price 3. Identify whether the formation is an RBD 4. Mark the Zone When marking the Zone, we need to watch for freshness and the strength of the Leg-Out Candle. Fresh Supply Zones are those where the price has never retraced after formation, they have the highest probability of having unfilled sell orders. Strong Explosive Red Leg-Out Candle indicates that supply and demand are totally out of balance and institutions have been aggressive sellers at that price zone. Trade Action at a Rally Base Drop Supply Zone RBD pattern is the footprint of Institutional selling activity, formed due to the sheer size of their sell orders. This implies that, when prices retrace back to the area, there is a strong likelihood that there will be a large number of pending sell orders. After identifying the supply zone, we as retail traders must wait for the price to retrace to the zone. The first retracement to the RBD supply zone is a high-probability sell opportunity. We can initiate a short trade on the pullback to the zone and in doing so participate along with the Institutions to the short side. Some past examples: Although RBD is a very powerful supply zone formation, it is highly recommended that one mustn’t trade it in isolation. Combining it with factors like a trend, trend exhaustion and location will improve the odds of the zones working in our favour.
NSE:POLYCABEducation
by MAKTradingSchool
How to trade doji candle like a legendhello everyone, It's been a long that we haven't discussed anything here.. so our today's topic of discussion is how to trade/play with signs similar to Doji/ dragonfly/hanging-man etc so we know the sign very well. we are referring here to the candlestick pattern, where there is some conflict between buyers & sellers & both keep trying to push/pull each other resulting in forming a candle where we usually see a small body candle having wicks on both sides. so our next question is how to trade them.. 1. Trend: before trading such patterns the trend should be known very well. 2. Once we have got the trend then wait for the small body candle. 3. Once we have got the candle, mark the high/low of the prior candle of the doji candle. 4. Wait for the next candle to form after the formation of doji candle. 5. once, the marked candle high/ low is breached on a closing basis you are all set to go! examples shared Example -1 Example-2 Example-3 Example-4 Example-5 Example-6 Example-7 Example-8 Example-9 I have shared multiple examples regarding the same & hope I be able to add some logic also.. Please note time frame must be kept the same while analyzing this setup. I have shared entry & stop-loss levels only. will share stop loss technique in another post Thanks for reading!!
NSE:WHIRLPOOLEducation
by ShubhamKatiyar
13
Bullish MarubozuThe bullish Marubozo candle (open equals low, high equals close) can signal a reversal when it is found at the end of a downtrend because it shows that the sentiment has changed and that the bulls are likely to continue pushing the asset higher. Take High and Low of Candle . Take Position at Close. Target ( Total Length of Candle/2), SL : Low of Candle. Risk Reward Ratio: 0.5 Feel free to share your feedback and queries. If you want to know about your stock please mention in comment. Note: This is not Paid only for Educational purpose.
NSE:BANKNIFTYEducation
by vahabsheikh
1
Gap Trading Combined With Supply & Demand ZonesWhat Are Gaps? Gaps are nothing but Price of a Stock moving up and down sharply with no or little trading happening between the previous days close and current days open. Gaps show an ultimate picture of imbalance between supply & demand. Gap formations are due to many fundamental and technical reasons. Most common example, when there is an announcement of company earnings. Gap Up or Gap Down is imminent the next trading day due to positive or negative news. A trader can profit from gaps provided he/she can identify the type of gap and its location with perspective to Institutional Supply & Demand Zones. Gap Trading Strategy using Supply and Demand Zones A lot of traders are fearful of Gaps and see it as a threat & aren’t comfortable carrying positions overnight. However, for a professional Supply Demand Trader, these Gaps aren’t threats on the contrary they provide high probability trading opportunities, when combined with Supply & Demand Zones. Four Gap Structures That We Look At: 1. Inside Gaps 2. Outside gaps 3. Novice Gaps 4. Professional Gaps 1.How to Identify & Trade Inside Gaps? Inside gaps are created when Price Opens between the prior Day’s High and low. Often these gaps fill quickly on the same day. Inside gaps can be mainly used for quick intraday trades, provided they happen at strong supply & demand zones. Gap Up into a strong Supply Zone provides a good short opportunity, whereas Gap Down into a strong Demand Zone presents a good long opportunity. Let’s see an example: 2.How to Identify & Trade Outside Gaps? Outside gaps are created when Price opens beyond the Prior days High and low. These gaps generally do not fill on the same day. They indicate the establishment of a new Trend or the continuation of the existing one. One must wait for quality Supply & Demand Zones to form after the gap and wait for a pullback to join the new move. Let’s see an example: 3.How to Identify & Trade Novice Gaps? When price gaps in the same direction of the current trend, then it is called a Novice Gap. Novice gaps as the name suggests are created by novice trader emotions and are excellent opportunities to find high probability trade setups. Gap Up or Gap Down after extended moves into quality areas of Supply & Demand, offer us high probability Short & Long opportunities respectively. Let’s see an example: 4.How to Identify & Trade Professional Gaps? When price gaps up in the Opposite direction of the current trend, it is called a Professional Gap or a Pro gap. Pro gaps represent a significant imbalance between Supply & Demand. Pro Gaps generally occur after extended moves in one direction, taking the amateur traders completely by surprise. They generally bring about trend change. Pro Gap Down & Pro Gap Up form high probability Supply & Demand Zones. Pull back to these zones provide us with opportunities to enter at trend change points. Let us see with an example:
NSE:CUBEducation
by MAKTradingSchool
16
INSIDE BAR STRATEGYAn “inside bar” pattern is a two-bar price action trading strategy in which the inside bar is smaller and within the high to low range of the prior bar, i.e. the high is lower than the previous bar’s high, and the low is higher than the previous bar’s low. Its relative position can be at the top, the middle or the bottom of the prior bar. So now come to the theory of inside bar of how to take trade is The classic entry for an inside bar signal is to place a buy stop or sell stop at the high or low of the mother bar, and then when price breakouts above or below the mother bar, your entry order is filled. It’s worth noting that these are the ‘classic’ or standard entry and stop loss placements for an inside bar setup, in the end, experienced traders may decide on other entries or stop loss placements as they see fit. Stop loss placement is typically at the opposite end of the mother bar, or it can be placed near the mother bar halfway point (50% level), typically if the mother bar is larger than average. So I am sharing the entry and the Stop loss through the pictures I am sharing below.
NSE:RELIANCEEducation
by AMIT-RAJAN
2
How to set an alert for BankNifty Intraday Strategy [5min TF] ? Set Alert on 77% Profitable Bank-Nifty Back-tested Intraday Strategy with FREE TRIALS Trend Follower Intraday for 5 minute Time-Frame (Adjustable) , that has the time condition for INDIAN | CRYPTO | FOREX Markets // ══════════════════════════════════════════════════════════════════════════════════════ // Unlike the Free Scripts - Risk Management , Position Sizing , Partial Exit etc. are also included . Send us a Message to know more about the strategy. // ══════════════════════════════════════════════════════════════════════════════════════ // The Timing can be changed to fit other markets, scroll down to "SQUARE-OFF TIME" to know more. The commission is also included in the strategy . The basic idea is when , 1) EMA1 crosses above EMA2 , is a Long condition. 2) EMA1 crosses below EMA2 , is a Short condition. 3) Green Section indicates Long position. 4) Red Section indicates Short position. 5) Allowed hours specifies the trade entry timing . 6) ATR STOP is the stop-loss value on chart , can be adjusted in INPUTS. 7) Target 1 is the 1st target value on chart , can be adjusted in INPUTS. 8) RISK is Maximum Risk per trade for the intraday trade can be changed . 9) Total Capital used can be adjusted under INPUTS. 10) ATR TRAIL is used for trailing after entry , as mentioned in the inputs below. 11) Check trades under the list of trades . 12) Trade only in liquid stocks . 13) Risk only 1-5% of total capital. 14) Inputs can be changed for better back-test results, but also manually check the trades before setting alerts 15) SQUARE OFF TIME - As you change the time frame , also change the square-off time to the candle's closing time. Eg: For 3min Time-frame , Hour = 2Hrs | Minute = 57min 16) Strategy stops for the day if you have a loss . 17) COMMISSION value is set to 10Rs and SLIPPAGE value is set to 1 . Go to properties to change it . Apply it to your charts Now ! Send us a message for FREE TRIALS | Instant Access Thank You ☺
NSE:BANKNIFTYEducation
by The_Algo_Engineer
1
How the hammer candle stick pattern is formed ??Educational Post Hammer candle stick pattern is important pattern shows counter attack of bulls. This pattern has significance when price is near crucial support or near long term moving average. Hammer shows that bears are unable to beat the bulls and not able to make close in bulls territory. Bulls also shows their presence when price enters in their territory. Please like, share and folloew for more such educational posts. Have a Happy Trading :) !!!
TVC:SILVEREducation
by Darshan_Panchal
One candlestick pattern - The MarubozuHey everyone! In this post, we are going to talk about a candlestick pattern known as Marubozu, along with a few exhibits that may help you solidify your understanding of this pattern. Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading! The candlestick charts offer a quick picture into the psychology of buyers and sellers. Before proceeding further, a few things to keep in mind: → A bearish candlestick indicates the opening price of the session being higher than the closing price. → Similarly, a bullish candlestick indicates the opening price of the session being lower than the closing price. → The shadow at the top and bottom represent the high and low for the session. → The size of the real body is indicative of the strength of the trend. What is a Marubozu pattern? A Marubozu is a candlestick with a full real body and no shadows. This solid body indicates a strong trend, be it in any direction. The name Marubozu comes from the Japanese and means "close-cropped", indicating a candle with no shadow. Marubozu can be divided into two types, depending on the bias. ∎ Bullish marubozu ∎ Bearish marubozu A Marubozu can appear anywhere in the chart irrespective of the prior trend; the trading implication remains the same. ⚠️ Please notice the textbook definition of a Marubozu is a candle with no shadows. However, in practice, the ideal setups rarely occur. Hence, there is a little bit of wiggle room on either side. 🟩 Bullish Marubozu → In a bullish Marubozu, the lack of the upper and lower shadow indicates that the low and high are equal to the open and close, respectively. However, there may be some shadows in reality, therefore we must be versatile within limits. → A bullish Marubozu indicates that market participants are willing to buy the stock at any price point throughout the day. As a result, the stock closes near the session's high. → In general, the occurrence of a bullish Marubozu indicates that the sentiment has strongly shifted to the upside and we can see higher prices in the coming sessions. Hence a trader should look for buying opportunities whenever the price pulls back to lower levels. Exhibit 1: Bullish Marubozu Exhibit 2: Bullish Marubozu with subsequent uptrend 🟥 Bearish Marubozu → In a bearish marubozu, the open price is almost equal to the high whereas the session closes near the low price. → A bearish Marubozu indicates a strong bearish sentiment because the market participants are willing to sell the stock at any price point throughout the day. → In general, the occurrence of a bearish Marubozu indicates that the sentiment has strongly shifted to the downside and we can see lower prices in the subsequent sessions. Hence a trader should look for selling opportunities whenever the price pulls back to higher levels. Exhibit 1: Bearish Marubozu Exhibit 2: Bearish Marubozu with subsequent down trend Thanks for reading! Hope this was helpful! See you all next week. 🙂 – Team TradingView Feel free to check us out on Instagram , Telegram , and YouTube for more awesome content! 💘
NSE:TITANEducation
by TradingView
8
Some Major Candlestick Pattern Bullish Engulfing: The bullish engulfing pattern is a two-candle reversal pattern. The second candle completely ‘engulfs’ the real body of the first one, without regard to the length of the tail shadows. This pattern appears in a downtrend and is a combination of one dark candle followed by a larger hollow candle. On the second day of the pattern, the price opens lower than the previous low, yet buying pressure pushes the price up to a higher level than the previous high, culminating in an obvious win for the buyers. Bearish Engulfing: A bearish engulfing pattern is a technical chart pattern that signals lower prices to come. The pattern consists of an up (white or green) candlestick followed by a large down (black or red) candlestick that eclipses or "engulfs" the smaller up candle. The pattern can be important because it shows sellers have overtaken the buyers and are pushing the price more aggressively down (down candle) than the buyers were able to push it up (up candle). Tweezer Top: A tweezers top is when two candles occur back to back with very similar highs. A tweezers bottom occurs when two candles, back to back, occur with very similar lows. The pattern is more important when there is a strong shift in momentum between the first candle and the second Tweezer Bottom: A Tweezer Bottom occurs during a downtrend when sellers push prices lower, often ending the session near the lows, but were not able to push the bottom any further. Tweezer Bottoms are considered to be short-term bullish reversal patterns that signal a market bottom Doji: A Doji is a candlestick pattern that looks like a cross as the opening and closing prices are equal or almost the same. The word Doji is of Japanese origin which means blunder or mistake that refers to the rarity of having the open and close price be exactly the same Evening Star: An evening star is a stock-price chart pattern used by technical analysts to detect when a trend is about to reverse. It is a bearish candlestick pattern consisting of three candles: a large white candlestick, a small-bodied candle, and a red candle. Morning Star: An evening star is a stock-price chart pattern used by technical analysts to detect when a trend is about to reverse. It is a bearish candlestick pattern consisting of three candles: a large white candlestick, a small-bodied candle, and a red candle. Hammers: The hammer candlestick is a bullish trading pattern that may indicate that a stock has reached its bottom, and is positioned for trend reversal. Specifically, it indicates that sellers entered the market, pushing the price down, but were later outnumbered by buyers who drove the asset price up. Inverted Hammers: The inverted hammer is a type of candlestick pattern found after a downtrend and is usually taken to be a trend-reversal signal. The inverted hammer looks like an upside-down version of the hammer candlestick pattern, and when it appears in an uptrend is called a shooting star: What Does the Shooting Star Tell You? Shooting stars indicate a potential price top and reversal. The shooting star candle is most effective when it forms after a series of three or more consecutive rising candles with higher highs. Spinning Top: A spinning top is a candlestick pattern that has a short real body that's vertically centered between long upper and lower shadows. The candlestick pattern represents indecision about the future direction of the asset. It means that neither buyers nor sellers could gain the upper hand. Three Black Crows: What Are the Three Black Crows? Three black crows is a phrase used to describe a bearish candlestick pattern that may predict the reversal of an uptrend. Candlestick charts show the day's opening, high, low, and closing prices for a particular security. For stocks moving higher, the candlestick is white or green. Three White Soldiers: Three white soldiers is a bullish candlestick pattern that is used to predict the reversal of the current downtrend in a pricing chart. The pattern consists of three consecutive long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high Three inside up: the pattern is a bullish reversal pattern composed of a large down candle, a smaller up candle contained within the prior candle, and then another up candle that closes above the close of the second candle Three Inside Down: The three inside down pattern is a bearish reversal pattern composed of a large up candle, a smaller down candle contained within the prior candle, and then another down candle that closes below the close of the second candle.
NSE:WIPROEducation
by TECHDARSHRESEARCHER
Reversal candlestick patterns1.Bullish Engulfing : The first candlestick is a red one, and the second is green. A green one “engulfs” the red one because the body has a lower opening price and a higher closing price 2. Evening Star : You need three candlesticks to see this Evening Star pattern, a green candle with a long body, a short green or red candle, and a red candlestick. 3. Dark Cloud : The price gaps higher and then sells off, creating a candlestick that shows a closing price lower than the midway point in the previous candle. 4. Spinning Top : A spinning top is a candlestick pattern having a short real body with long upper and lower shadows. 5. Tweezzer Bottom : The Tweezer Bottom candlestick pattern is a bullish reversal candlestick pattern that is formed at the end of the downtrend. It consists of two candlesticks, the first one being bearish and the second one being bullish candlestick. 6. Two Black Gapping : The bearish two black gapping continuation pattern appears after a notable top in an uptrend, with a gap down that yields two black bars posting lower lows.
NSE:NIFTYEducation
by OK_Rane
4
CANDLE PATTERN 2 - BEARISH ENGULFINGPattern name: Bearish Engulfing Pattern Type : Bearish Reversal No. of Candles : 02 How to Identify it ? 1)There must be a preceding Uptrend. 2)A short Green candle followed by a long Red candle. 3)The Red candle should opens higher & closes lower than the Green candle. 4)The Green candle should be completely engulfed by the Red candle. Psychology behind it : 1)The Bulls lose momentum & the Bears take charge and managed to close below the Green candle. 2)It implies the bears have fully override the bulls. How to trade it ? 1)Look for the Bearish Engulfing at the Top of the Uptrend. 2)Upon confirmation, open a Short position in the 3rd Candle. 3)Place a Stoploss above the high of the Red candle.
HEducation
by Divyaapugal
7
Shooting Star - Complete GuideWhat is the Shooting Star candlestick pattern? A shooting star candlestick pattern is a chart formation that occurs when an asset’s market price is pushed up quite significantly, but then rejected and closed near the open price. This creates a long upper wick, a small lower wick and a small body. The upper wick must take up at least half of the length of the candlestick for it to be considered a shooting star. And, it must appear at the top of an uptrend. As a result, the shooting star candlestick pattern is often thought to be a possible signal of bearish reversal. This means an uptrend might not continue (prices may fall). Traders should be careful not to confuse the shooting star pattern with an inverted hammer candlestick pattern. They both have a longer upper wick and small body. But the inverted hammer indicates bullish as opposed to bearish reversal. Also, the inverted hammer is often seen at the bottom of a downtrend. How to recognize it: i) Little to no lower shadow ii) The price closes at the bottom ¼ of the range iii) The upper shadow is about 2 or 3 times the length of the body What does Shooting Star tells you ? i) Shooting stars signals a potential downside reversal ii)A shooting star opens and rises strongly during the trading session, showing the same buying pressure that is seen over the last trading sessions. At the end of the trading session, the sellers push the price down near the open. or At the buying climax, huge selling pressure stepped in and pushed price lower. The selling pressure is so strong that it closed below the opening price. In short, a Shooting Star is a bearish reversal candlestick pattern that shows rejection of higher price. Before trading with the shooting star, one should remember the following points: Trade Entry: Before you enter a shooting star trade, you should confirm that the prior trend is an active bullish trend. Entry is below the Shooting Star candle low. Stop Loss: Place Stop Loss just above the high of Shooting Star candle or above recent high. Taking Profits: Minimum target is the size of the Shooting Star candle. I generally prefer 1:2 as first target. Best way to ride the move is to sit till any bullish signal is sensed. You can target previous swing lows or support zone. Examples- TATAMOTORS NIFTY NAUKRI High Probability Scenario:- i)Focus on the major Resistance levels, that’s where traders get trapped When you trade The Shooting Star candlestick pattern, you want to focus on trading the major Resistance levels (the ones which can be seen on the higher timeframe).When a level is obvious and the price breaks out of it, many traders will hop on the bandwagon and buy the breakout (hoping to catch a piece of the move).However, if the price makes a false breakout, this group of traders is trapped, and their stops will trigger strong selling pressure. Now, this is to your advantage because The Shooting Star candlestick pattern allows you to trade the false breakout and profit from “trapped” traders. So the more obvious the level, the more traders will get trapped — and you make more money. Conclusion So here’s what you’ve learned today: The Shooting Star candlestick is a bearish reversal pattern that shows rejection of higher prices. Just because you a spot a Shooting Star candlestick pattern doesn’t mean you go short immediately because you must also consider the context of the markets. Confirmation to go short is always below shooting star candle's low. Set your stop loss slightly above shooting star candle or above previous highs.
NSE:NIFTYEducation
by Omahto
8
RELIABLE CANDLESTICK PATTERNPattern Name: Bullish Engulfing Pattern Type: Bullish Reversal No. of Candles: 02 How to Identify it? 1)There must be a preceding Downtrend. 2)A short Red candle followed by a long green candle. 3)The Green candle should open lower & closes higher than the Red candle. 4) The Green candle should completely engulf the Red candle. The psychology behind it : 1)The Bears lose momentum & the Bulls take charge and manage to close above the red candle. 2)It implies the bulls have fully overridden the bears. How to trade it? 1)Look for the Bullish Engulfing at the bottom of the Downtrend. 2)Upon confirmation, open a Long position in the 3rd Candle. 3)Place a Stoploss below the low of the Green candle.
NSE:HDFCBANKEducation
by farhanf7867
MOST RELIABLE CANDLESTICK PATTERN Pattern name: Bullish Engulfing Pattern Type : Bullish Reversal No. of Candles : 02 How to Identify it ? 1)There must be a preceding Downtrend. 2)A short Red candle followed by a long Green candle. 3)The Green candle should opens lower & closes higher than the Red candle. 4)The Red candle should be completely engulfed by the Green candle. Psychology behind it : 1)The Bears lose momentum & the Bulls take charge and managed to close above the red candle. 2)It implies the bulls have fully override the bears. How to trade it ? 1)Look for the Bullish Engulfing at the bottom of the Downtrend. 2)Upon confirmation, open a Long position in the 3rd Candle. 3)Place a Stoploss below the low of the Green candle. Happy Trading :) -Divyaa Pugal
HEducation
by Divyaapugal
35
'Inside' Story of 'Inside' Candle !!!! -> Definition of Inside Candle As the name suggests, an inside bar chart pattern engulfs the inside of a large candle, some call it a mother bar. It’s a pattern that forms after a large move in the market and represents a period of consolidation. The inside bar pattern can be a very powerful price action signal if you understand how to trade it properly. Matching lows and highs are acceptable, however, the inside bar’s range must not be outside of the mother candle by even 1 point. -> Facts about Inside Candle Inside bar pattern within the trading range (or shadow) of the preceding bar. It is at least a two candlestick formation. Mother candlestick can be either bullish(green) or bearish(red). The inside bar chart pattern can be bullish or bearish. Inside bar setup. -> Procedure to trade Inside Candle Entering: – When the price action completes an inside candlestick chart pattern, you should mark the low and high of the Inside Bar consolidation range. These two levels are used to trigger a potential trade. Remember, the inside candle clues us into the eventual breakout and likelihood of a continuation outside the range in the direction of the break, however, it doesn’t give us information about the direction of the breakout through the range, prior to the actual move. In simple terms, if the price action interrupts the range upwards, then you should go long. If the price action breaks the range downwards, then you should trade the short side. Exiting: – Projecting the potential move with Inside Bar Breakouts can be challenging. Often inside bar trades can lead to a prolonged impulse move after the breakout, so employing a trailing stop loss after the price has moved in your favor is a smart trade management strategy. Stop Loss: – In either case (If you are Long or short), your stop should be located below the bottom of the range, as stated in the picture below. There can be a buffer of 1% below the range. -> Inside Candle helps to identify change in trend The inside bar candlestick pattern is such a valuable tool because it tells us that the market is not as bullish or bearish as it was in the preceding period. Being able to identify periods of market expansion and contraction will help any trader improve their odds of finding a winning trade because we know from history that expansion and contraction can only last so long. When either of those market phases ends, the resulting moves can be explosive! My OBSERVATION -> It is more effective if used with RSI i.e. when RSI is greater then 70 and inside candle is formed , that spot is best for shorting, and if RSI is less then 30 and inside candle is formed , that spot is best to go long.
NSE:NIFTYEducation
by Chaser30
27