ADVANCED Forex Scalping Strategy
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SELL
Candlestick Patterns & Price Action
In technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick
chart that some believe can predict a particular market movement. The recognition of the pattern is
subjective and programs that are used for charting have to rely on predefined rules to match the pattern.
There are 42 recognized patterns that can be split into simple and complex patterns, in this chapter we’ll
see only the important and most accurate patterns.
In technical analysis, transitions between rising and falling trends are often signaled by price patterns. By
definition, a price pattern is a recognizable configuration of price movement that is identified using a
series of trend lines and/or curves. When a price pattern signals a change in trend direction, it is known as
a reversal pattern; a continuation pattern occurs when the trend continues in its existing direction
following a brief pause. Technical analysts have long used price patterns to examine current movements
and forecast future market movements.
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Candlestick Patterns
Dojis:
A doji is a name for a session in which the candlestick has an
open and close that are virtually equal and are often
components in patterns. Doji candlesticks look like
a cross, inverted cross or plus sign. Alone, doji are neutral
patterns that are also featured in a number of important
patterns. A doji candlestick forms when open and close
are virtually equal for the given time period and generally signals
a reversal pattern for technical analysts.
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Hammer & Hanging Man :
A hammer is a type of bullish reversal candlestick pattern, made up of just one candle,
as it has a long lower wick and a short body at the top
of the candlestick with little or no upper wick. When you see the hammer form in a
downtrend this is a sign of a potential reversal in the market.
A Hanging Man candlestick is the same as Hammer but form in a Uptrend and it sign
A potential market reversal.
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Inverted Hammer & Shooting Star :
The inverted hammer is a type of candlestick pattern found after a downtrend and is
usually taken to be a trend-reversal signal.
The Shooting star is the same candlestick as Inverted Hammer Candlestick pattern
But found after an Uptrend and is usually taken to be a trend-reversal signal.
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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. The Bullish Engulfing pattern appears
in a downtrend.
Bearish 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. The Bearish Engulfing pattern appears
in a Uptrend.
SELL Price Action
In technical analysis, transitions between rising and falling trends
are often signaled by price patterns. By definition, a price
pattern is a recognizable configuration of price movement that is
identified using a series of trend lines and/or curves.
When a price pattern signals a change in trend direction, it is
known as a reversal pattern; a continuation pattern occurs when
the trend continues in its existing direction following a brief
pause. Technical analysts have long used price patterns to
examine current movements and forecast future market
movements.
Continuation Patterns:
Are geometric shapes found in the price data that
can help a trader understand the price action, as well as make
predictions about where the price is likely to go.
Continuation patterns, when they occur, indicate that a price trend
is likely to continue.
SELL Price Action
Reversal Patterns:
A reversal pattern is a transitional phase that marks the
turning point between a rising and a falling market.
1- Double Top .
2- Double Bottom.
SELL Chart Example
See you in the next
episode…
