CandleStick Patterns

Discussion in 'Technical Analysis' started by sfunds, Mar 19, 2004.

  1. sfunds


    What are the Different CandleStick Patterns used Regularly by Traders.
    What is the result of each type of CandleStick Patterns

    Does Volume have a role in Candlestick Patterns

    What is CandleStrength

    Can anyone post the formulas for various Candle Patterns

    In Most of the patterns whether reversal or continution it depends on Underlying Trend How to get underlying Trend

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  3. EtfTrader

    EtfTrader Guest

    The best candlesticks patterns are the one's nobody knows of...
  4. kiansoon


  5. Hi kiansoon,

    The problem with Jared's candlestick education lessons is that the charts are too small and/or the candlestick patterns themselves are only defined.

    I also get them via email and the info is not helpful...its more of a definition review.

    In fact, most candlestick books do a better job in explaining candlesticks than Jared does.

    sfunds had asked about what are the regular patterns used reguarly by traders.

    He could have used ET search menu to discover most here talk about dojis, hammers, engulfing, shooting stars, tweezers, haramis et cetera.

    He was also interested in the formulas for Candlestick patterns.

    That's a path he doesn't want to go down. Stay away from the software that scan for candlestick patterns.

    Here's an example of why...

    I've documented about 15 different types of Harami patterns and only a few of them are high probability...

    The rest are not very reliable.

    Those candlestick programs (those codes) will catch either ALL Haramis or just some based on the trade methodology of the individual that coded the program.

    Another example...some Bearish Engulfing or some Bullish Engulfing are not reversal signals...some of them are actually exhaustion signals of the current trend...

    Like getting a Bearish Engulfing at the bottom of a price decline...this could actually be an exhaustion signal to the downtrend and a big hint to start preparing for any Bullish Reversal signals that may appear soon.

    Another way to look at it...if you Short that Bearish Engufling at the bottom of a downtrend...high risk trade.

    Simply, I highly recommend a candlestick trader to learn just a few patterns visually and master their trade management (trading plan).

    Do won't need any candlestick pattern recognition codes nor any generic definitions.

    As for trade management...that's the key...

    Each type of candlestick pattern is different from another...Bearish Engulfing is different than a Dark Cloud Cover.

    With that said...its highly recommend you learn how to use the information from the prior candlesticks and Upper shadows to determine where to place your initial stop/loss protection.

    Thus, anybody that uses candlesticks with either fixed stops or fixed profit targets like 1 point stop and 2 point profit while not giving any merit to the prior information nor the pattern itself...

    Just trading some definition...

    Is a fool soon parted from his/her money.

    Start with the following them, review them et cetera...

    You'll quickly get going in the right direction about learning candlestick patterns.

    1. Learn how price reacts to wide range body candlestick (difference between the Open and Close).

    2. Learn about Candlestick S/R Levels.

    Use ET search menu or use a search engine like Google or whatever to find out more info about the above.

    They above two topics will help you to maximize your profits and minimize your losses while trading via Japanese Candlesticks.

    Trade management is key...initial stop/loss, trailing stops, profit targets and contingency plans.