2 Candlestick Patterns That Actually Work — when used right !Intro:
Most traders learn candlestick patterns from cheat sheets —
Engulfing, doji, hammer, shooting star…
But not all patterns are created equal.
The key isn’t memorizing names — it’s understanding which ones hold real weight when used with structure.
Here are 2 powerful candlestick patterns that can shift the game — if you know when to trust them.
⸻
1. The Rejection Wick with Body Close Inside Structure (a.k.a. Rejection Candle)
What It Looks Like:
• A long wick that pierces above/below a key zone
• Candle body closes back inside the range
• Usually forms at OB, FVG, or liquidity sweep zones
Why It Works:
• It shows trapped traders and smart money rejection
• Confirms a false breakout and reclaim of intent
• Often leads to strong reversals or clean follow-throughs
When To Use It:
• After liquidity sweep
• Near HTF zone (OB / supply-demand)
• When followed by structure shift or BOS
Pro Tip: Combine with session awareness (NY / London open) for killer confluence.
⸻
2. The Inside Bar (Breakout Continuation Bar)
What It Looks Like:
• A small candle completely inside the range of the previous candle
• Price consolidates within one bar’s high-low range
• Often signals coiled pressure
Why It Works:
• It shows price resting before continuation
• When it forms near structure (OB or demand), the breakout that follows is often explosive
• Stop-loss is easy to place (above/below the mother bar)
When To Use It:
• After a BOS or clean impulse
• As a continuation signal on HTF
• Inside compression → expansion zones
Pro Tip: Trade the breakout of the inside bar with bias confirmation — not in both directions.
⸻
Final Word:
Candlestick patterns don’t work on their own.
They work when:
• Context is clear
• Liquidity has been handled
• Market structure aligns
If you trade candles without logic, you’re reacting to emotion.
But when you pair them with narrative and zones?
They become weapons.
Candlestickpattern
Reliance - Price action channel + Candlestick + RSIKey Observations from the Chart
Channel Structure -
Both resistance and support lines have been tested multiple times with precise reactions
The most recent price action shows a strong rejection at the lower channel boundary
Candlestick Formation-
This month printed a textbook strong lower wick rejection candle:
Long lower wick indicates buyers aggressively stepping in at support
RSI Confluence-
The RSI tells a compelling complementary story:
Recently retested COVID-era levels (historic oversold territory)
Has since established higher highs and higher lows (bullish structure)
Shows positive divergence with price (RSI making HHs while price tests support)
MOL | One more time - trying to take position with stoplossMOL | One more time - trying to take position with stoploss
As this is my favorite stock, but its under performing for a long time. This setup looks good for 50-60% for short term.
Trendline + Small channel breakout
CMP : 70
SL : 65
Target : 110
XAUUSD Next Move 2800 ? 🪙 FUNDAMENTALS:
✅China on Friday struck back at the U.S tariffs imposed by Trump with a slew of counter-measures including extra levies of 34% on all U.S. goods and export curbs on some rare-earths, deepening the trade war between the world's two biggest economies.
✅ More than 50 nations have reached out to the White House to begin trade talks since Trump rolled out sweeping new tariffs, top officials said on Sunday as they defended levies that wiped out nearly $6 trillion in value from U.S. stocks last week.
✅ Federal Reserve Chairman Jerome Powell said tariffs increased the risk of higher inflation and slower growth, highlighting the difficult path ahead for policymakers at the U.S. central bank
________________________________________
🔍 4H Hour Timeframe Analysis
📊 Trend & Price Action :
• Previous Trend: Clear uptrend inside a rising channel (marked by red lines).
• Recent Price Movement: Price broke down below the ascending channel, signaling trend weakness or possible reversal.
• Strong bearish candles show increased selling pressure recently.
📉 Key Technical Levels:
• Support Zone: Around $2,979–$2,957 (green and grey lines) — price bounced here, showing buyer interest.
• Resistance Zone: Around $3,057–$3,077 — a previous support zone now acting as resistance after the breakdown.
• Moving Averages:
o Red Line (likely 50 EMA): Recently broken down, now acting as dynamic resistance.
o Blue Line (likely 200 EMA): Around $2,990, price tested and bounced — this is often a key support in a trend.
🧠 Interpretation:
• Price broke structure (channel and EMAs), signaling a shift from bullish to bearish bias.
• The bounce from the 200 EMA and support zone suggests a potential short-term retracement or consolidation.
• If price fails to reclaim $3,057–$3,077, sellers may re-enter.
________________________________________
🔍 15-Minute Timeframe Analysis
📊 Trend & Price Action:
• Sharp intraday recovery from the low of around $2,957 to the current $3,033.
• But price is now facing resistance from a supply zone (highlighted in red).
• You’ve marked an Order Block (OB) around $3,125–$3,140 — a zone where institutional selling might have started.
📉 Key Levels:
• Resistance Zones:
o $3,076 (blue line) – likely 200 EMA, strong resistance.
o $3,057–$3,076 – supply area and previous breakdown zone.
o Order Block (OB) near $3,125–$3,140 – strong institutional resistance zone.
• Support Zones:
o $3,000, $2,978, and $2,957 – these are lower supports where price previously bounced.
🧠 Interpretation:
• Short-term, the price is retracing from a heavy drop.
• Watch how price behaves at $3,057–$3,076:
o Rejection = possible short setup.
o Break & close above = retracement could continue toward OB ($3,125).
• The OB is a potential reversal zone, where price could get heavily rejected if tested.
________________________________________
📌 Beginner Takeaways:
Trend is weakening – the uptrend broke, and the market is forming lower highs and lower lows.
Price is trying to recover from key support zones but facing resistance overhead.
Volume is increasing near support — shows interest from buyers but not a confirmed trend reversal yet.
The Order Block is a great place to watch for reversal trades (supply zone = potential sell).
________________________________________
✅ Suggested Actions for Practice:
Mark key support/resistance zones on your own chart to develop your structure-reading skills.
Scenario 1: Short if price rejects at $3,057–$3,076 zone.
Scenario 2: Long only if price closes above $3,077 and holds support.
Observe how price behaves near moving averages and OB zones
.
________________________________________
👉 Always follow TP/SL to protect your capital and maximize profits!
Disclaimer: This is for educational purposes only.
Always trade responsibly and manage your risk effectively
Gold Next Move 3100?4-Hour Chart (Mid-Term View)
🔑 Key Observations:
Uptrend Remains Intact:
Price is still above the 50 EMA, indicating continued bullish strength.
Key Resistance at $3,038:
A break above this level could trigger further upside momentum.
Support Levels:
$3,011 and $3,007: First support zone.
$2,983: Stronger support.
Potential Scenario:
Bullish Breakout: If price breaks above $3,038 , the next target would be $3,048 and beyond.
🔸 Failure to Breakout : If rejected at resistance, price might retrace to $3,011 or lower.
1-Hour Chart (Short-Term View)
🔑Key Observations:
✅ Ranging Market: Gold is consolidating within a horizontal range between $3,009 and $3,037, forming a sideways movement.
✅ Ascending Trendline : The price is gradually increasing with a rising trendline acting as dynamic support.
🔸Key Resistance Levels:
$3,037-$3,048: Strong resistance zone.
All-Time High Above $3,057.5: Major resistance if the price breaks above $3,048.
✅Support Levels:
🔹$3,021 - 3,009: Key intraday support zone.
🔹$3,004 and $2,985: Stronger support zones below.
Moving Averages:
Price is above the 50 EMA (red line), indicating bullish strength.
The 200 EMA (blue line) is far below, showing overall long-term bullish sentiment.
💡 Potential Trade Setup:
🔹Breakout Strategy: A breakout above $3,037-$3,048 could lead to new highs.
Range Trading: If the price remains within the range, traders can buy near support ($3,009) and sell near resistance ($3,037-$3,048).
15-Minute Chart (Intraday/Scalping View)
🔑Key Observations:
Recent Breakout Attempt: Price has tested the $3,030-$3,038 resistance zone.
200 EMA & 50 EMA Cross:
The red (50 EMA) is above the blue (200 EMA), signaling bullish sentiment.
Support Zone Identified (~$3,007-$3,022):
Price reacted strongly from this level, indicating strong buyer demand.
Trade Plan for Scalpers:
✅ Long Entrie s: Look for pullbacks near $3,022 with stop-loss below $3,007.
✅ Short Entries : If price rejects $3,038, look for short trades targeting $3,022 or lower.
🌟 Final Conclusion & Trading Plan:
📌 Bullish Scenario:
🔹A break above $3,038 will confirm a bullish breakout.
🔹Potential target = $3,048, then all-time high $3,060+.
🔹Best strategy: Buy the breakout with proper stop-loss below $3,022.
📌 Bearish Scenario:
If price fails to break $3,038, expect a pullback to $3,011 - $3,007.
Possible short opportunities below $3,007 targeting $2,983.
📌 Neutral/Ranging Market:
Until price breaks $3,038 or drops below $3,007, expect sideways movement.
🔹 Recommended Trading Approach:
✅ Breakout traders: Watch for a confirmed break and retest above $3,038.
✅ Range traders: Buy near $3,009-$3,022 and sell near $3,038.
✅ Scalpers: Look for quick trades within the range of $3,007 - $3,037.
📉 Risk Management:
🔸 Keep a stop-loss below $3,007 if buying.
🔸 Keep a stop-loss above $3,038 if shorting.
👉 Always follow TP/SL to protect your capital and maximize profits!
Stay tuned for updates once the confirmations are in place!
Please support me with your likes and comments to motivate me to share more analysis with you and share your opinion about the possible trend of this chart with me !
📢Best Regards , Silver Wolf Traders Community
Disclaimer: This is for educational purposes only.
Always trade responsibly and manage your risk effectively
Max Financial Services Ltd – Trend Reversal in Play?🚀 Technical Analysis Breakdown:
The yellow trendline shows a long-term support, which has held well despite recent corrections.
The red downtrend line indicates a recent bearish phase, which has now been broken with a strong bullish candle.
The stock has bounced from the trendline support, showing signs of strength.
Above all the strong Pinbar candle looks amazing for a candle close .
🔎 Your Take? Do you see further upside or a pullback? Comment below! 👇
Candlesticks PatternCandlesticks Pattens - Part -2
*SkyTradingZone* is your go-to source for educational content on trading, covering market insights, strategies, and in-depth analysis. Our goal is to empower traders with knowledge to navigate the markets effectively.
---
# *Candlestick Patterns: The Key to Understanding Market Psychology*
Candlestick charts are one of the most *powerful tools in trading, providing valuable insights into **market sentiment, reversals, and continuation patterns. They help traders make informed decisions by visualizing **price action* in a structured way.
---
## *1️⃣ Understanding Candlestick Basics*
A candlestick represents *price movement within a specific time frame* (e.g., 1 minute, 5 minutes, 1 hour, 1 day). Each candle contains *four key price points*:
📌 *Open* – The price at which the candle starts.
📌 *High* – The highest price reached during the time frame.
📌 *Low* – The lowest price reached during the time frame.
📌 *Close* – The price at which the candle ends.
### *Candlestick Structure:*
A *bullish (green)* candle forms when the closing price is higher than the opening price.
A *bearish (red)* candle forms when the closing price is lower than the opening price.
🕯 *Wicks (Shadows):* The thin lines above and below the candle body indicate the highest and lowest prices reached during that period.
---
## *2️⃣ Types of Candlestick Patterns*
### *📍 Single Candlestick Patterns*
These patterns consist of a *single candle* and indicate potential reversals or continuations.
✅ *Hammer (Bullish Reversal)*
- A small body with a long lower wick.
- Appears after a downtrend.
- Signals strong *buying pressure*.
✅ *Shooting Star (Bearish Reversal)*
- A small body with a long upper wick.
- Appears after an uptrend.
- Indicates *selling pressure* from institutions.
✅ *Doji (Indecision Candle)*
- Open and close prices are almost the same.
- Indicates *market indecision* and possible reversal.
✅ *Marubozu (Strong Trend Candle)*
- No wicks, just a full body.
- *Bullish Marubozu* → Strong buying pressure.
- *Bearish Marubozu* → Strong selling pressure.
---
### *📍 Double Candlestick Patterns*
These patterns involve *two candles* and suggest trend continuation or reversal.
✅ *Bullish Engulfing (Strong Uptrend Signal)*
- A small *red* candle followed by a large *green* candle.
- The green candle *completely engulfs* the red one.
- Indicates *buying pressure* and a potential reversal.
✅ *Bearish Engulfing (Strong Downtrend Signal)*
- A small *green* candle followed by a large *red* candle.
- The red candle *engulfs the previous green one*.
- Signals *strong selling pressure*.
✅ *Tweezer Bottom (Bullish Reversal)*
- Two candles with the *same low price*.
- Suggests *strong support* and buying interest.
✅ *Tweezer Top (Bearish Reversal)*
- Two candles with the *same high price*.
- Indicates *resistance* and selling pressure.
---
### *📍 Multi-Candlestick Patterns*
These patterns involve *three or more candles* and provide strong trade signals.
✅ *Morning Star (Bullish Reversal)*
- A *red candle, followed by a **small indecisive candle, and then a **big green candle*.
- Shows *trend reversal from bearish to bullish*.
✅ *Evening Star (Bearish Reversal)*
- A *green candle, followed by a **small indecisive candle, and then a **big red candle*.
- Indicates a *trend reversal from bullish to bearish*.
✅ *Three White Soldiers (Bullish Continuation)*
- Three *consecutive green candles* with higher closes.
- Indicates *strong buying momentum*.
✅ *Three Black Crows (Bearish Continuation)*
- Three *consecutive red candles* with lower closes.
- Signals *strong selling pressure*.
---
## *3️⃣ How to Use Candlestick Patterns in Trading?*
Candlestick patterns alone *are not enough; you must **combine them with other factors* for high-probability trades.
### *🔹 Combine with Support & Resistance*
- A *bullish engulfing at support* is a strong *buy signal*.
- A *shooting star at resistance* is a strong *sell signal*.
### *🔹 Use Volume Confirmation*
- *High volume* with a reversal pattern increases its reliability.
- *Low volume* means the pattern might fail.
### *🔹 Look for Confluence with Indicators*
- *RSI Oversold + Hammer Candle = Strong Buy Signal*.
- *Bearish Engulfing + MACD Crossover = Strong Sell Signal*.
### *🔹 Trade with Trend for Best Results*
- *Bullish patterns work best in an uptrend*.
- *Bearish patterns work best in a downtrend*.
---
## *4️⃣ Common Mistakes Traders Make with Candlestick Patterns*
🚫 *Trading Without Confirmation* – Always wait for the next candle or volume confirmation before entering.
🚫 *Ignoring Market Context* – A single pattern doesn’t guarantee a trend reversal; check the overall trend.
🚫 *Forcing Trades* – Don’t take a trade just because you see a candlestick pattern; wait for confluence with other signals.
---
## *5️⃣ Best Candlestick Strategies for Profitable Trading*
### *📌 Strategy 1: Engulfing Pattern + Support/Resistance*
🔹 Identify a *strong support or resistance level*.
🔹 Wait for a *bullish engulfing pattern at support* or a *bearish engulfing at resistance*.
🔹 Enter a trade with *stop-loss below support (for buy)* or *above resistance (for sell)*.
### *📌 Strategy 2: Hammer Candle + RSI Oversold*
🔹 Find a *hammer candle near a key support zone*.
🔹 Check if *RSI is below 30 (oversold zone)*.
🔹 Enter a *buy trade* when the next candle confirms the reversal.
### *📌 Strategy 3: Marubozu Breakout*
🔹 Find a *marubozu candle breaking a key level*.
🔹 Enter in the *direction of the breakout* after confirmation.
🔹 Place a *stop-loss below the breakout candle*.
---
# *Final Thoughts – Mastering Candlestick Patterns for Profitable Trading*
Candlestick patterns are an *essential tool for traders* to analyze price action effectively. However, *using them in combination with volume, support & resistance, and technical indicators will increase accuracy*.
📌 *Key Takeaways:*
✔ *Master single, double, and multi-candlestick patterns.*
✔ *Use them with support, resistance, and trendlines for best results.*
✔ *Avoid common mistakes like overtrading or ignoring confirmation.*
✔ *Follow price action and volume to validate trade setups.*
By understanding *candlestick psychology, traders can **predict market movements and improve profitability*.
---
🔹 *Disclaimer: This content is for educational purposes only. *SkyTradingZone is not SEBI registered and does not provide financial or investment advice. Please conduct your own research before making any trading decisions.
Candlesticks PattensCandlesticks Pattens - Part -1
*SkyTradingZone* is your go-to source for educational content on trading, covering market insights, strategies, and in-depth analysis. Our goal is to empower traders with knowledge to navigate the markets effectively.
---
# *Candlestick Patterns: The Key to Understanding Market Psychology*
Candlestick charts are one of the most *powerful tools in trading, providing valuable insights into **market sentiment, reversals, and continuation patterns. They help traders make informed decisions by visualizing **price action* in a structured way.
---
## * Understanding Candlestick Basics*
A candlestick represents *price movement within a specific time frame* (e.g., 1 minute, 5 minutes, 1 hour, 1 day). Each candle contains *four key price points*:
📌 *Open* – The price at which the candle starts.
📌 *High* – The highest price reached during the time frame.
📌 *Low* – The lowest price reached during the time frame.
📌 *Close* – The price at which the candle ends.
### *Candlestick Structure:*
A *bullish (green)* candle forms when the closing price is higher than the opening price.
A *bearish (red)* candle forms when the closing price is lower than the opening price.
🕯 *Wicks (Shadows):* The thin lines above and below the candle body indicate the highest and lowest prices reached during that period.
---
## * Types of Candlestick Patterns*
### *📍 Single Candlestick Patterns*
These patterns consist of a *single candle* and indicate potential reversals or continuations.
✅ *Hammer (Bullish Reversal)*
- A small body with a long lower wick.
- Appears after a downtrend.
- Signals strong *buying pressure*.
✅ *Shooting Star (Bearish Reversal)*
- A small body with a long upper wick.
- Appears after an uptrend.
- Indicates *selling pressure* from institutions.
✅ *Doji (Indecision Candle)*
- Open and close prices are almost the same.
- Indicates *market indecision* and possible reversal.
✅ *Marubozu (Strong Trend Candle)*
- No wicks, just a full body.
- *Bullish Marubozu* → Strong buying pressure.
- *Bearish Marubozu* → Strong selling pressure.
---
### *📍 Double Candlestick Patterns*
These patterns involve *two candles* and suggest trend continuation or reversal.
✅ *Bullish Engulfing (Strong Uptrend Signal)*
- A small *red* candle followed by a large *green* candle.
- The green candle *completely engulfs* the red one.
- Indicates *buying pressure* and a potential reversal.
✅ *Bearish Engulfing (Strong Downtrend Signal)*
- A small *green* candle followed by a large *red* candle.
- The red candle *engulfs the previous green one*.
- Signals *strong selling pressure*.
✅ *Tweezer Bottom (Bullish Reversal)*
- Two candles with the *same low price*.
- Suggests *strong support* and buying interest.
✅ *Tweezer Top (Bearish Reversal)*
- Two candles with the *same high price*.
- Indicates *resistance* and selling pressure.
---
### *📍 Multi-Candlestick Patterns*
These patterns involve *three or more candles* and provide strong trade signals.
✅ *Morning Star (Bullish Reversal)*
- A *red candle, followed by a **small indecisive candle, and then a **big green candle*.
- Shows *trend reversal from bearish to bullish*.
✅ *Evening Star (Bearish Reversal)*
- A *green candle, followed by a **small indecisive candle, and then a **big red candle*.
- Indicates a *trend reversal from bullish to bearish*.
✅ *Three White Soldiers (Bullish Continuation)*
- Three *consecutive green candles* with higher closes.
- Indicates *strong buying momentum*.
✅ *Three Black Crows (Bearish Continuation)*
- Three *consecutive red candles* with lower closes.
- Signals *strong selling pressure*.
---
## * How to Use Candlestick Patterns in Trading?*
Candlestick patterns alone *are not enough; you must **combine them with other factors* for high-probability trades.
### *🔹 Combine with Support & Resistance*
- A *bullish engulfing at support* is a strong *buy signal*.
- A *shooting star at resistance* is a strong *sell signal*.
### *🔹 Use Volume Confirmation*
- *High volume* with a reversal pattern increases its reliability.
- *Low volume* means the pattern might fail.
### *🔹 Look for Confluence with Indicators*
- *RSI Oversold + Hammer Candle = Strong Buy Signal*.
- *Bearish Engulfing + MACD Crossover = Strong Sell Signal*.
### *🔹 Trade with Trend for Best Results*
- *Bullish patterns work best in an uptrend*.
- *Bearish patterns work best in a downtrend*.
---
## * Common Mistakes Traders Make with Candlestick Patterns*
🚫 *Trading Without Confirmation* – Always wait for the next candle or volume confirmation before entering.
🚫 *Ignoring Market Context* – A single pattern doesn’t guarantee a trend reversal; check the overall trend.
🚫 *Forcing Trades* – Don’t take a trade just because you see a candlestick pattern; wait for confluence with other signals.
---
## * Best Candlestick Strategies for Profitable Trading*
### *📌 Strategy 1: Engulfing Pattern + Support/Resistance*
🔹 Identify a *strong support or resistance level*.
🔹 Wait for a *bullish engulfing pattern at support* or a *bearish engulfing at resistance*.
🔹 Enter a trade with *stop-loss below support (for buy)* or *above resistance (for sell)*.
### *📌 Strategy 2: Hammer Candle + RSI Oversold*
🔹 Find a *hammer candle near a key support zone*.
🔹 Check if *RSI is below 30 (oversold zone)*.
🔹 Enter a *buy trade* when the next candle confirms the reversal.
### *📌 Strategy 3: Marubozu Breakout*
🔹 Find a *marubozu candle breaking a key level*.
🔹 Enter in the *direction of the breakout* after confirmation.
🔹 Place a *stop-loss below the breakout candle*.
---
# *Final Thoughts – Mastering Candlestick Patterns for Profitable Trading*
Candlestick patterns are an *essential tool for traders* to analyze price action effectively. However, *using them in combination with volume, support & resistance, and technical indicators will increase accuracy*.
📌 *Key Takeaways:*
✔ *Master single, double, and multi-candlestick patterns.*
✔ *Use them with support, resistance, and trendlines for best results.*
✔ *Avoid common mistakes like overtrading or ignoring confirmation.*
✔ *Follow price action and volume to validate trade setups.*
By understanding *candlestick psychology, traders can **predict market movements and improve profitability*.
---
🔹 *Disclaimer: This content is for educational purposes only. *SkyTradingZone is not SEBI registered and does not provide financial or investment advice. Please conduct your own research before making any trading decisions.
Abandoned Baby Pattern: A Powerful Reversal Tool for TradersHello Traders!
Today, let’s dive into the Abandoned Baby Pattern , an exciting and reliable candlestick pattern that can provide powerful reversal signals. Known for its ability to mark trend reversals, this pattern is a must-know for traders looking to enter at the right moment after a trend shift.
What is the Abandoned Baby Pattern?
The Abandoned Baby is a three-candle pattern that signifies a potential trend reversal. It occurs after a strong price move, usually at the end of an uptrend or downtrend. The pattern consists of the following candles:
A strong price movement in the trend direction (either bullish or bearish).
A gap down (for bullish reversal) or gap up (for bearish reversal) candle that opens and closes outside the previous candle’s range, signaling indecision.
A gap in the opposite direction , completing the pattern, and signaling a trend reversal.
Key Characteristics of the Abandoned Baby Pattern
Gap Down or Gap Up: The second candle gaps away from the first one, showing indecision and setting the stage for a reversal.
Trend Reversal: The Abandoned Baby pattern typically indicates that the trend is about to reverse.
Confirmation Candle: The third candle is the confirmation of the reversal, showing the direction of the new trend.
Volume Surge: Look for a spike in volume on the third candle to confirm the reversal.
How to Trade the Abandoned Baby Pattern?
Entry Point: Enter a position once the third candle closes, confirming the reversal direction.
Stop Loss: Place your stop loss just below (for a bullish reversal) or above (for a bearish reversal) the third candle to manage risk.
Profit Targets: Use a risk-to-reward ratio to set your profit targets, or measure the distance from the base to the top of the pattern for a more precise target.
Real-World Application: Nifty 50 Case Study
Looking at the Nifty 50 chart, we can clearly see the Abandoned Baby Pattern signaling a strong trend reversal. After the gap down and the formation of the three candles, the price broke out in the new direction, with clearly marked targets for potential trades.
Risk Management Considerations
Position Sizing: Always adjust your position size according to your risk tolerance and the volatility of the pattern.
Stop Loss Placement: Properly place the stop loss to avoid getting caught in false breakouts.
Patience & Confirmation: Wait for the third candle to close before entering the trade for confirmation of the reversal.
What This Means for Traders
The Abandoned Baby pattern is a great tool for spotting trend reversals. Combining it with other technical analysis tools like volume and support/resistance levels will make it even more effective.
Look for the pattern at the end of a strong trend to increase the probability of a successful reversal.
Confirm with volume for added reliability.
Use stop losses to minimize potential losses while targeting favorable risk-to-reward ratios.
Conclusion
The Abandoned Baby Pattern is a powerful tool for traders, signaling a strong trend reversal. By understanding its structure and how to trade it effectively, you can spot high-probability setups for profitable trades.
Have you traded using the Abandoned Baby pattern?
Share your experiences in the comments below! Let’s learn and grow together as traders.
Three Black Crows: How to Spot and Profit from Bearish ReversalsHello Traders!
I hope you’re all doing great! Today, we’ll discuss the Three Black Crows candlestick pattern, one of the most reliable bearish reversal patterns you can find in technical analysis. If you're serious about identifying potential trend reversals, understanding this pattern is essential.
The Three Black Crows is a powerful bearish signal that typically marks the end of an uptrend. It consists of three consecutive long red (or black) candles that close progressively lower, showing strong selling pressure and a shift in momentum. This pattern is particularly effective when it forms at a key resistance level, and it can lead to significant price declines.
What is the Three Black Crows Pattern?
The Three Black Crows candlestick pattern signals the reversal of an uptrend. The pattern forms when:
The first candle is a large red candle, closing near the low of the day.
The second candle opens below the first one and closes lower.
The third candle opens lower than the second one and closes near its low.
Each candle in the sequence is characterized by strong bearish price action, and their alignment suggests that bears are gaining control.
Key Characteristics of the Three Black Crows Pattern
Bearish Trend Reversal: Three long red candles following an uptrend suggest a shift in momentum from buyers to sellers.
Strong Resistance Zone: The pattern is more reliable when it forms near a strong resistance level, where the price has struggled to move past in the past.
Closing at the Low: Each of the three candles closes near their respective lows, showing increasing selling pressure.
Volume Confirmation: Volume should ideally increase with each successive candle, confirming that bears are taking control.
How to Trade the Three Black Crows Pattern
Entry Point: After the formation of the third candle, consider entering a short position once the price breaks the low of the third candle. This confirms the bearish trend.
Stop Loss: Place your stop loss just above the high of the third candle to minimize risk in case of a false breakout.
Profit Target: Measure the distance from the high of the pattern to the low of the third candle. Project this distance downward from the breakout point to estimate your profit target.
Real-World Application: Tata Consultancy Services Case Study
In the chart of Tata Consultancy Services (above), we can see a classic example of the Three Black Crows pattern. The price formed a resistance zone and then saw the three consecutive bearish candles break the support, confirming the bearish trend reversal. The huge fall after the pattern’s confirmation indicates the power of this candlestick formation.
Risk Management Considerations
Position Sizing: Adjust your position size based on your risk tolerance and make sure it fits within your overall portfolio strategy.
Stop Loss Placement: Place your stop loss above the third candle to avoid potential losses from a false breakout.
Confirmation with Volume: Always wait for volume confirmation before entering the trade. Volume should increase as the pattern forms.
What This Means for Traders
The Three Black Crows is an excellent pattern to spot potential trend reversals, especially after an uptrend. This pattern works best when combined with other technical indicators like trendlines, support and resistance, and moving averages to confirm the trend reversal.
Look for the pattern at resistance levels to identify high-probability bearish reversals.
Confirm with volume to increase the reliability of the pattern.
Use proper stop loss placement to manage your risk and ensure a favorable risk-to-reward ratio.
Conclusion
The Three Black Crows candlestick pattern is a reliable bearish reversal signal that can help traders capitalize on price declines. By identifying the pattern correctly, waiting for confirmation, and applying solid risk management strategies, you can improve your trading success.
Have you traded using the Three Black Crows pattern?
Share your experiences in the comments below! Let’s keep learning and growing together!
Long in GOLDVery short target Buy side trade based on a Bullish Engulfing pattern in Gold 1hr time frame.
Entry- 77100-77110
Target- 77250 ( or take 150 points 150 to 130 point from entry)
SL- 77000 (strict SL)
Disclaimer- This is just for educational purpose please take advice from your own financial advisor before taking any decision.
JAI SHREE RAM.
GSPL - Gujarat State Petroleum Corporation Bullish ViewGSPL charts have formed a bullish engulfing candlestick pattern.
You can use this opportunity because it has a very good risk to reward ratio.
Entry: Long above ₹389.80 (the high of the bullish engulfing candle)
Stop-Loss: Short below ₹368 (the low of the bearish candlestick before the bullish engulfing pattern)
Take-Profit: This will depend on your risk tolerance and trading goals. based on a 1:2 or trailing basis 1:3 Risk to reward Ratio
Risk Management: Always remember to practice good risk management. Only risk a small percentage of your capital on each trade.
Disclaimer: This is not financial advice. Please do your own research before making any trading decisions.
Remember, trading involves risk. I can't guarantee that this trade will be successful.
Also dont forget to share and boost, thank you for all your love and keep supporting like you do, helps me work harder..
Tata Communication | Breakouts or Fakeouts ? ⭕️ Swing Trading opportunity: Price Action Analysis Alert !!!⭕️
💡✍️Technical Reasons to trade or Strategy applied :-
✅Inverted Head & Shoulder Chart Pattern Bull Breakout
✅Breakout confirmed
✅Rise in Volume
✅Good 3 touches Trendline Breakout with volume
✅Clear uptrend with HH & HLs sequence
✅ Order block as potential Supports
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Exide Industries Breakout & Retest | Swing Trade IdeaExide Industries has recently broken a counter trendline and is currently retesting the breakout level. The stock has also breached the mother candle, but it remains inside a parallel channel that could act as resistance. Keep an eye on how the price reacts within the channel – a breakout above could open up new opportunities, but the channel resistance may cause hesitation. Manage your risk and stay aware of the overall market structure before making a move.
GRANULES INDIA - Downtrend BreakoutGRANULES INDIA
1) Time Frame - Monthly.
2) Previous month candle strong breakout follwoed by current month cancle close with strong rejection / Retracement of the previous breakout & looking bullish.
3) Downtrend strong triangle pattern breakout.
4) Next target would be Previous All Time High - 437.95 followed by the primary trend target / resistance at around 192 in the long term.
5) Recommendation - Strong Buy
Bajaj Consumer - Rounding PatternThe "Rounding Bottom" or "Saucer Bottom" chart pattern is a technical analysis indicator that can signal a potential bullish reversal in the price of a stock. When observed in Bajaj Consumer's stock chart, this pattern suggests that the stock may have reached its lowest point and is poised for an upward trend.
Key points to note that when bullish curve started, started with Morning star then bullish piercing and finally bullish engulfing. Lows of the bullish candle indicate that the market has bottomed out.
Key Characteristics:
Shape: The pattern resembles a "U" shape, indicating a gradual shift from a downtrend to an uptrend.
Duration: It typically forms over a longer period, often several weeks to months, reflecting a slow shift in market sentiment. Here it takes more a year
Volume: Volume tends to decrease at the bottom of the pattern and increases as the price begins to rise, confirming the potential reversal.
Implications for Bajaj Consumer:
Market Sentiment: The pattern reflects a shift from bearish to bullish sentiment among traders and investors.
Entry Point: Investors might consider entering a long position as the stock breaks out from the rounding bottom pattern, signaling the start of a potential uptrend.
Target Price: The expected target price after the breakout can often be estimated by measuring the depth of the rounding bottom and projecting it upward from the breakout point.
How to Trade:
If Bajaj Consumer's stock shows a rounding bottom with the lowest point at ₹200 and the breakout occurs at ₹260, the depth is ₹60. Hence, the target price could be around ₹320 (₹260 + ₹60).
Regards
Arvind Yadav, Cfa
Arvind Share Academy