26/11/2010 12:01:44
forum
Administrator
Posts: 387
|
Characteristics of the Pin Bar Formation
• The open and close of the pin bar are within the price range of bar 1 and bar 3 of the formation, or very close to being within their range.
• The open and close of the pin bar are very close together, the closer the better.
• The open and close of the pin bar are near one end of the bar, the closer to the end the better.
• The nose or tail of the pin bar sticks out from the surrounding price bars, the longer the nose of the pin bar the better.
Bearish Reversal Pin Bar Formation
In a top or bearish reversal pin bar formation the pin bar sticks out noticeably in between bar 1 and bar 3 and has a long protruding tail.
Bullish Reversal Pin Bar Formation
The bullish or bottom reversal pin bar formation is the opposite of the top reversal pin bar formation. Here again, we see the pin bar has a long protruding tail that has obviously rejected a certain price level.
|
|
0
• permalink
|
06/04/2010 21:03:48
Tom Leeson
Administrator
Posts: 661
|
Cande Sticks are very important --- but need to be looked in context...as soon as you see a doji exit or enter
no
look at the context of it....
ok
watch this video
http://www.nisoncandlesticks.com/?p=65
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 05:08:00
Tom Leeson
Administrator
Posts: 661
|
Hanging Man
The Hanging Man produces some very important attributes when analyzing a potential reversal. It is considered one of the 12 major signals. Learn how to use a Hanging Man signal correctly. The probabilities of being in a correct trade when utilizing this signal becomes extremely high.
HANGING MAN
Description
The Hanging Man is also comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. It is found at the top of an up trend. The Japanese named this pattern because it looks like a head with the feet dangling down.
Criteria
1. The upper shadow should be at least two times the length of the body.
2. The real body is at the upper end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
3. There should be no upper shadow or a very small upper shadow.
4. The following day needs to confirm the Hanging Man signal with a black candle or better yet, a gap down with a lower close.
Signal Enhancements
1. The longer the lower shadow, the higher the potential of a reversal occurring.
2. A gap up from the previous days close sets up for a stronger reversal move provided the day after the Hanging Man signal trades lower.
3. Large volume on the signal day increases the chances that a blowoff day has occurred although it is not a necessity.
Pattern Psychology
After a strong up-trend has been in effect, the atmosphere is bullish. The price opens higher but starts to move lower. The bears take control. But before the end of the day, the bulls step in and take the price back up to the higher end of the trading range, creating a small body for the day. This could indicate that the bulls still have control if analyzing a Western bar chart. However, the long lower shadow represents that sellers had started stepping in at these levels. Even though the bulls may have been able to keep the price positive by the end of the day, the evidence of the selling was apparent. A lower open or a black candle the next day reinforces the fact that selling is going on.
When identifying the Hanging Man signal under the correct conditions, with stochastics in the overbought conditions, at the top of an uptrend, provides the information needed for identifying the possibility of a trend reversal. When learning to play the stock market, being able to put all the probabilities in ones favor is very important. When will an uptrend reverse? When indications start appearing that demonstrate that the sellers are starting to take control! The Hanging Man signal provides the elements that indicate the sellers stepping into a trend. Use this information to your advantage.
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:18:26
Tom Leeson
Administrator
Posts: 661
|
The Evening Star is the exact opposite of the morning star. The evening star, the planet Venus, occurs just before the darkness sets in. The evening star is found at the end of the uptrend.
edited by tom on 04/03/2010
EVENING STAR
( Sankawa Yoi No Myojyo )
Description
The Evening Star pattern is a top reversal signal. It is exactly the opposite of the Morning Star signal. Like the planet Venice , the evening star, it foretells that darkness is about to set or that prices are going to go lower. It is formed after an obvious uptrend. It is made by a long white body occurring at the end of an uptrend., usually when the confidence has finally built up. The following day gaps up, yet the trading range remains small for the day. Again, this is the star of the formation. The third day is a black candle day and represents the fact that the bears have now seized control. That candle should consist of a closing that is at least halfway down the white candle of two days prior. The optimal Evening Star signal would have a gap before and after the star day.
Criteria
The uptrend has been apparent.
The body of the first candle is white, continuing the current trend. The second candle is an indecision formation.
The third day shows evidence that the bears have stepped in. That candle should close at least halfway down the white candle.
Signal Enhancements
The longer the white candle and the black candle, the more forceful the reversal.
The more indecision that the star day illustrates, the better probabilities that a reversal will occur.
A gap between the first day and the second day adds to the probability that a reversal is occurring.
A gap before and after the star day is even more desirable. The magnitude, that the third day comes down into the white candle of the first day, indicates the strength of the reversal.
Pattern Psychology
A strong uptrend has been in effect. The buyers can't imagine anything going wrong, they are piling in. However, it has now reached the prices where sellers start taking profits or think the price is fairly valued. The next day all the buying is being met with the selling, causing for a small trading range. The bulls get concerned and the bears start taking over. The third day is a large sell off day. If there is big volume during these days, it shows that the ownership has dramatically changed hands. The change of direction is immediately seen in the color of the bodies.
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:17:53
Tom Leeson
Administrator
Posts: 661
|
The Morning Star is a bottom reversal signal. Like the morning star, the planet Mercury, it foretells the sunrise, or the rising prices. The pattern consists of a three day signal.
edited by tom on 04/03/2010
MORNING STAR
Description
The Morning Star is a bottom reversal signal. Like the planet Mercury, the morning star, it foretells that brighter things - sunrise, is about to occur, or that prices are going to go higher. It is formed after an obvious downtrend. It is made by a long black body, usually one of the fear-induces days at the bottom of a long decline. The following day gaps down. However, the magnitude of the trading range remains small for the day. This is the star of the formation. The third day is a white candle day. And represents the fact that the bulls have now stepped in and seized control. The optimal Morning Star signal would have a gap before and after the star day.
The make up of the star, an indecision formation, can consist of a number of candle formations. The important factor is to witness the confirmation of the bulls taking over the next day. That candle should consist of a closing that is at least halfway up the black candle of two days prior.
Criteria
The downtrend has been apparent. The body of the first candle is black, continuing the current trend. The second candle is an indecision formation. The third day shows evidence that the bulls have stepped in. That candle should close at least halfway up the black candle.Signal Enhancements
The longer the black candle and the white candle, the more forceful the reversal. The more indecision that the star day illustrates, the better probabilities that a reversal will occur. A Gap between the first day and the second day adds to the probability that a reversal is occurring. A gap before and after the star day is even more desirable. The magnitude, that the third day comes up into the black candle of the first day, indicates the strength of the reversal.Pattern Psychology
A strong downtrend has been in effect. The sellers start getting panicky. There is a large sell-off day. The next day as the selling continues, bulls are stepping in at the low prices. If there is big volume during these days, it shows that the ownership has dramatically changed hands. The second day does not have a large trading range. The third day the bears start to lose conviction as the bull increase their buying. When the price starts moving back into the trading range of the first day, the sellers diminish and the buyers seize control.
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:16:44
Tom Leeson
Administrator
Posts: 661
|
Hammer and Hanging-man are candlesticks with long lower shadows and small real bodies. The bodies are at the top of the trading session. This pattern at the bottom of the down-trend is called a Hammer. It is hammering out a base. The Japanese word is takuri, meaning "trying to gauge the depth".
edited by tom on 04/03/2010
HAMMERS AND HANGING MAN
Description
The Hammer is comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. Found at the bottom of a downtrend, this shows evidence that the bulls started to step in. The color of the small body is not important but a white candle has slightly more bullish implications than the black body. A positive day is required the following day to confirm this signal.
Criteria
The lower shadow should be at least two times the length of the body. The real body is at the upper end of the trading range. The color of the body is not important although a white body should have slightly more bullish implications. There should be no upper shadow or a very small upper shadow. The following day needs to confirm the Hammer signal with a strong bullish
day.
Signal Enhancements
The longer the lower shadow, the higher the potential of a reversal occurring. A gap down from the previous day's close sets up for a stronger reversal move provided the day after the Hammer signal opens higher. Large volume on the Hammer day increases the chances that a blow off day has occurred.Pattern Psychology
After a downtrend has been in effect, the atmosphere is very bearish. The price opens and starts to trade lower. The bears are still in control. The bulls then step in. They start bringing the price back up towards the top of the trading range. This creates a small body with a large lower shadow. This represents that the bears could not maintain control. The long lower shadow now has the bears questioning whether the decline is still intact. A higher open the next day would confirm that the bulls had taken control.
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:12:56
Tom Leeson
Administrator
Posts: 661
|
The Bearish Engulfing Pattern is directly opposite to the bullish pattern. It is created at the end of an up-trending market. The black real body completely engulfs the previous day's white body. This shows that the bears are now overwhelming the bulls.
edited by tom on 04/03/2010
A simple description of the Bearish Engulfing signal reveals why the signal works very well as a candlestick sell signal. This is the stock market data that an investor should be using for both technical analysis as well as fundamental analysis. The information conveyed in this signal creates an extremely high probability that the buying is over. It also reveals an opportunity for establishing a good short position.
BEARISH ENGULFING PATTERN
Description
The Bearish Engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. The Bearish Engulfing Pattern is formed after an up trend. It opens higher than the previous day’s close and closes lower than the previous day’s open. Thus, the black candle completely engulfs the previous day’s white candle. Engulfing can include either the open or the close be equal to the open or close of the previous day, but not both.
Criteria
The body of the second day completely engulfs the body of the first day. Shadows are not a consideration. Prices have been in a definable uptrend, even if it has been short term. The body of the second candle is opposite color of the first candle, the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a Doji or an extremely small body.Signal Enhancements
A large body engulfing a small body. The previous day was showing the trend was running out of steam. The large body shows that the new direction has started with good force. When the engulfing pattern occurs after a fast spike up, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over-extended and increases the potential for profit taking and a meaningful pullback. Large volume on the engulfing day increases the chances that a blowoff day has occurred. The engulfing body engulfing more than one previous body demonstrates power in the reversal. If the engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working. The greater the open gaps up from the previous close, the greater the probability of a strong reversal. Pattern Psychology
After an uptrend has been in effect, the price opens higher than where it closed the previous day. Before the end of the day, the sellers have taken over and moved the price below where it opened the day before. The emotional psychology of the trend has now been reversed.
Whether day trading, swing trading, or long-term investing, the major signals work effectively in any time frame. Candlestick charts become a very fast and easy analysis of what is going on in a price trend. The same analysis can be done on market indexes, sectors/industries, or individual stocks or commodities. Candlestick charts have recently come into vogue. Over the past decade, the years of candlestick charts has exploded. Unfortunately, most investors do not know how to use them correctly. Learn the major signals and you'll have control over your own financial future.
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:12:14
Tom Leeson
Administrator
Posts: 661
|
The Bullish Engulfing Pattern is formed at the end of a downtrend. A white body is formed that opens lower and closes higher than the black candle open and close from the previous day. This complete engulfing of the previous day's body represents overwhelming buying pressure dissipating the selling pressure
edited by tom on 04/03/2010
Description
The Engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. The Bullish Engulfing Pattern formed after a downtrend. It opens lower that the previous day’s close and closes higher than the previous day’s open. Thus, the white candle completely engulfs the previous day’s black candle.
Criteria
1. The body of the second day completely engulfs the body of the first day. Shadows are not a consideration.
2. Prices have been in a definable down trend, even if it has been short term.
3. The body of the second candle is opposite color of the first candle, the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a doji or an extremely small body.
Signal Enhancements
A large body engulfing a small body. The previous day shows the trend was running out of steam. The large body shows that the new direction has started with good force. When the engulfing pattern occurs after a fast move down, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over extended and increases the potential for profit taking. Large volume on the engulfing day increases the chances that a blowoff day has occurred. The engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working. The greater the open gaps down from the previous close, the greater the probability of a strong reversal.Pattern Psychology
After a downtrend has been in effect, the price opens lower than where it closed the previous day. Before the end of the day, the buyers have taken over and moved the price above where it opened the day before. The emotional psychology of the trend has now been altered.
edited by tom on 04/03/2010
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:11:41
Tom Leeson
Administrator
Posts: 661
|
The Long-legged Doji has one or two very long shadows. Long-legged Doji's are often signs of market tops. If the open and the close are in the center of the session's trading range, the signal is referred to as a Rickshaw Man. . The Japanese believe these signals to mean that the trend has "lost it's sense of direction."
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:11:17
Tom Leeson
Administrator
Posts: 661
|
The Gravestone Doji is formed when the open and the close occur at the low of the day. It is found occasionally at market bottoms, but it's forte is calling market tops. The name, Gravestone Doji, is derived by the formation of the signal looking like a gravestone
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 04:11:08
Tom Leeson
Administrator
Posts: 661
|
http://www.candlestickforum.com/PPF/Parameters/16_456_/candlestick.asp
DOJI
Upon seeing a doji in an over-bought or oversold conditions, (over-bought or oversold conditions can be defined using other indicators such as stochastics), becomes an extremely high probability reversal situation. When a doji appears, it is demonstrating that there is indecision now occurring at an extreme portion of a trend. This indecision can be portrayed in a few variations of the doji.
Criteria
1. The open and close are the same or nearly the same
2. The length of the shadow should not be excessively long, especially when viewed at the end of a bullish trend.
Signal Enhancements
1. A gap away from the previous day's close sets up for a stronger reversal move.
2. Large volume on the signal day increases the chances that a blowoff day has occurred, although it is not a necessity.
3. It is more effective after a long candle body, usually an exagerated daily move compared to the normal daily trading range seen in the majority of the trend.
edited by tom on 04/03/2010
edited by tom on 04/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 03:38:22
Tom Leeson
Administrator
Posts: 661
|
There are really only 12 major Candlestick patterns that need to be committed to memory. The Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All have credible probabilities of indicating correct future direction of a price move. The following dozen signals illustrate the major signals. The definition of "major" has two functions. Major in the sense that they occur in price movements often enough to be beneficial in producing a ready supply of profitable trades as well as clearly indicating price reversals with strength enough to warrant placing trades.
Utilizing just the major Japanese Candlesticks trading signals will provide more than enough trade situations for most investors. They are the signals that investors should contribute most of their time and effort. However, this does not mean that the remaining patterns should not be considered. Those signals are extremely effective for producing profits. Reality demonstrates that some of them occur very rarely. Other formations, although they reveal high potential reversals, may not be considered as strong a signal as the major signals
--
MicroTrends tom
|
|
0
• permalink
|
04/03/2010 03:37:59
Tom Leeson
Administrator
Posts: 661
|
CandleStick Forum
http://www.candlestickforum.com/PPF/Parameters/1_25_/candlestick.asp
--
MicroTrends tom
|
|
0
• permalink
|
03/03/2010 22:22:36
Tom Leeson
Administrator
Posts: 661
|
ABC Reversal Pattern Candle Pattern 1
PinBar new high/Low followed by doji and tombstone or engulfing
edited by tom on 03/03/2010
--
MicroTrends tom
|
|
0
• permalink
|
03/03/2010 22:21:50
Tom Leeson
Administrator
Posts: 661
|
Tradeable CandleStick Patterns
http://www.nisoncandlesticks.com/?p=65
edited by tom on 06/05/2010
--
MicroTrends tom
|
|
0
• permalink
|