Candlestick has hundreds of patterns that consist of a single candlestick up to more than five candlestick that formed a pattern. Masin each of these patterns have different levels of accuracy.
Following the systematics of technical analysis in general, have a candlestick alert level of "signal" and "confirmation". Level "signal" means candlestick has formed a polayang will show the movement up or down, but the trader is not advisable to put the position first. The level of "confirmation" means the candlestick pattern has advised traders put the position in the direction of movement according to the patterns that emerge.
All candlestick pattern has a degree of "signal" and "confirmation" is. But for 6 candlestick patterns that will be discussed, "signal" and "confirmation" that was limited to suggestions and can be ignored. That is, when the six patterns emerge, the trader was able to feel at ease to put the position without having menungg "confirm" again.
Here are 6 of the pattern:
1. Bullish Engulfing
2. Piercing Line
3. Morning Star
4. Morning (Doji) Star
5. Three White Soldiers
6. Rising Three Method
Each partner has a candlestick pattern that indicates the opposite direction. As an example of the Bullish Engulfing informing the stock price will go up, Bearish Engulfing inform the stock price will go down.
Since we are discussing the most profitable candlestick patterns and gains in the stock market gained by selling higher than the purchase price, then we will only discuss the candlestick pattern that shows the stock price will rise or bullish candlestick formation only.
Six candlestick pattern that has been discussed is a bullish candlestick pattern formation - which of course has a partner 6 pattern which shows the stock price will go down or bearish candlestick formation.
Candlestick patterns that will be discussed is a candlestick pattern ideal / best. There is little tolerance in its use and does not have to be 100% the same as in the condition of the book. Only, the less difference there is in practice, of course, the more valid and more accurate signal of the candlestick pattern.
bullish Engulfing
Engulfing in English means "hug". In the form of a candlestick pattern, engulfing candlestick latest means "hug" the previous candlestick.
Here is a picture of the Bullish Engulfing pattern:
On Bullish Engulfing, body candlestick 1 is between the body candlestick 2 (shadow that appears in the first candlestick need not be seen). That's why the term "hug".
Here are the requirements - Bullish Engulfing ideal requirements:
• should occur at the top of an uptrend,
• candlestick body 2 to be 'covered' or lebihbesar of body candlestick 1,
• open or closed candlestick one should be under the open or closed candlestick 2,
• open or close (one of) the first candlestick should open or close the same as (one of) the candlestick 2,
• 2 should be a long candlestick candlestick body,
• candlestick 1 and 2 should be different colors,
• 2 must be white candlestick to indicate uptrend is going to happen,
• candlestick 1 should be colored black because it matches the downtrend is going on,
• suggested waiting for confirmation though not necessarily exist. Post a Buy position if the price is over the line which is a confirmation of the price prior to the open or closed candlestick candlestick 1,
• the volume of the candlestick 2 must be greater than the volume of the candlestick 1
Piercing Line
Piercing in English means "pierced". In the form of pattern
candlestick, Piercing Line candlestick latest means "pierced"
previous candlestick.
Here is a picture of a Piercing Line pattern:
At Piercing Line candlestick open 2 are under close one but closed candlestick candlestick candlestick body 2 is in the 1 (which should be in the middle of the body of the candlestick 1). In this pattern, as if the candlestick 2 "stabbing" candlestick 1.
Here are the requirements - the ideal condition Piercing Line:
• occurs at the bottom of a downtrend, candlestick 1 and 2 is the long body candlestick candlestick,
• 1 must be black candlestick (which shows the price down),
• candlestick 2 must be white (which shows the price rises)
• Open candlestick "a line"), 2 and lowest at the bottom of the candlestick 1 (below
• candlestick close second pass at least half the body candlestick 1 (above the "line B") but below the close of the first candlestick (below the "line of confirmation"),
• confirmation is not required, but recommended.
Morning (Doji) Star
Indeed, this pattern consists of two patterns, namely Morning Doji Star and Morning Star. However, due to the resemblance, I unify these patterns into one.
Morning (Doji) Star seemed to form a "little star" that appeared after a dark night (black / bearish candlestick) and then "little star" makes the atmosphere becomes bright (white / bullish candlestick).
Special to the Morning Doji Star, the doji candlestick 2 should form whatsoever. No other differences were striking distinguishing Morning Star
Morning Doji Star.
Three White Soldiers
Three White Soldiers means appear three white / bullish candlestick. This pattern is a pattern that shows the condition of the stock is very
bullish.
Rising Three Method
This pattern resembles a guardrail or a procession of small black body bearish candlestick is escorted by long white bullish candlestick on the right body
and left.
all candlestick pattern is a bullish reversal pattern except Three White Soldiers and Rising Three Method, this pattern is a pattern that shows the upward movement after the movement down (because it is called a reversal or reversal). While Three White Soldiers and Rising Three Method classified as a bullish continuation pattern. This pattern is a pattern of upward movement after the pattern of the previous upward movement stalled.
Therefore, in its use to trade, note the position of the candlestick patterns and see the movement before your transaction before making a decision.
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