Saturday, 5 April 2014
CANDLESTICK PATTERN - TRADE FOR DREAM
Abandoned Baby Top
Abandoned Baby Top
Definition:
An Abondoned Baby Top is a rare bearish three bar reversal pattern that develops after an up leg. This pattern begins with an up gap followed by a doji or similar smaller candlestick. A down gap then occurs on the next bar leaving the doji "abandoned" at the high.
Background:
In the classic version of this pattern, the doji bar shadows are completely above the shadows of the first and third bars of this candlestick pattern. The two gaps in this pattern are often called "open windows."
Practical Use:
Technical analysts often use Abandoned Baby Tops as a sell signal. Additional confirmation in the form of a bearish tradable setup is often needed before the trader will open a short position.
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Inverted Hammer
Inverted Hammer
Definition:A Inverted Hammer is a single candlestick (regardless of real body color) bullish reversal signal that develops after a down leg. It opens lower, then trades higher, but closes back near its open.Background:
Conversely, if the candlestick is formed after an up leg where it opens higher, trades much higher, but then returns to close near its open, it is considered a Shooting Star.
Practical Use:
Technical analysts use Inverted Hammers as a potential buy signal. Additional confirmation is often needed in the form of another longer term bullish trade setup if needed.
 Bullish Doji Star
Bullish Doji Star
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Spinning Top High Wave
Spinning Top High Wave
Definition:
A Spinning Top Wave, also called a High Wave candle, is candlestick that has an open and close price near each other which produces a small real body and color is of no importance. They also have long upper and lower shadows that significantly exceed the length of the body. These types of candlesticks indicate indecision and subsequent consolidation.
Practical Use:
Technical analysts will often watch for Spinning Top High Wave candlesticks and then "join the sidelines". After such a volatile session, traders will often wait for additional confirmation of an upward or downward price movement.
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Evening Star
Evening Star
Definition:
An Evening Star is a three candlestick bearish candlestick pattern that occurs after an up leg and starts out with an up bar with a large real body. The second candle has a narrow range and gaps up on the open. The last bar opens with a gap down and then closes as a bearish candlestick below the midpoint of the body of the first bar.
Practical Use:
Technical analysts will often use the Evening Star Candlestick pattern as a bearish signal for selling opportunities. Additional confirmation in the form of a bearish trade setup is typically necessary before the trader will sell into a position.
 Bearish Engulfing
Bearish Engulfing
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Hammer-CANDLESTICK PATTERN - TRADE FOR DREAM
Hammer
Hammer
Definition:
A Hammer candlestick is formed when the price moves lower after the open, and then comes back to close above the intraday low and near the open.
This candlestick typically has a small real body (regardless of color) with a lower shadow that is at least two times the measure of the real body.
Background:
A classic Hammer has little to no upper shadow. Conversely, if this candlestick is formed after an up leg, it is considered a Hanging Man candlestick.
Practical Use:
Technical analysts often use Hammers as the beginning of buy signals especially when in context of another tradable buy pattern.
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Dark Cloud Cover-CANDLESTICK PATTERN - TRADE FOR DREAM
Dark Cloud Cover
Dark Cloud Cover
Definition:
The Dark Cloud Cove is a two bar formation developing after an up leg, with the first bar continuing a move up and producing a long white body. The next bar forms by opening at a new high then closes below the midpoint of the body of the first bar which produces a red down bar.
Practical Use:
Technical analysts often use the Dark Cloud Cover candlestick pattern to start working their way into a short trade. Most traders need this to form in context with another bearish trade setup as additional trade confirmation.
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Bullish Engulfing-CANDLESTICK PATTERN - TRADE FOR DREAM
Bullish Engulfing
Bullish Engulfing
Definition:
Bullish Engulfing is a two bar bullish reversal pattern and develops after a down leg. The first bar has a small real body and is followed by a second bullish bar with a white real body that completely engulfs the previous bar's range.
Practical Use:
Technical analysts will often use the Bullish Engulfing candlestick pattern as a buying opportunity when in context of another bullish chart pattern.
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Morning Star-CANDLESTICK PATTERN - TRADE FOR DREAM
Morning Star
Morning Star
Definition:
Morning Star is a three candlestick bullish candlestick pattern that occurs after a down leg and starts out with a down bar with a relatively large real body. The second candle has a narrow range and gaps down on the open. The last bar gaps up and then closes as a bullish candlestick above the midpoint of the body of the first bar.
Practical Use:
Technical analysts will often use the Morning Star candlestick pattern as a bullish signal for buying opportunities. Additional confirmation in the form of a bullish trade setup is typically necessary before the trader will buy into a position.
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CANDLESTICK PATTERN - TRADE FOR DREAM
Hanging Man
Hanging Man
Definition:
A Hanging Man is a bearish candlestick pattern that develops after an up leg and has the exact appearance of a hammer. This candlestick opens bullish but sells off dramatically. After the sell off, the price rallies and closes near the high of the bar and well off the lows. This candlestick has an open and close near each other with a long lower shadow.
Background:
The real body's color is of no importance, but in the classic version of this candlestick, the lower shadow must be two times or more the length of the real body with little to no upper shadow.
Conversely, if this candlestick is formed after a down leg, it is considered a Hammer candlestick.
Practical Use:
Technical analysts often use Hanging Man candlestick patterns as the beginning of sell signals especially when in context of another tradable sell pattern.
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CANDLESTICK PATTERN - TRADE FOR DREAM
Bearish Harami
Bearish Harami
Definition:
A Bearish Harami is a two bar bearish candlestick pattern where each candlestick has the opposite color. After a run-up in price, this pattern is formed when the real body of the second candlestick trades completely within the range of the real body of the previous candlestick.
Practical Use:
Technical analysts often use a Bearish Harami as a way to begin working their way into a short position. Additional confirmation in the form of a bearish chart pattern is often necessary before opening a trade.
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