Favorite Candlestick Pattern

Discussion in 'Technical Analysis' started by SitrusTrader, Mar 9, 2004.

  1. What is your favorite (and most profitable) candlestick pattern?

    I love head&shoulders, for example. win 8 out of 10 times on it.

    I heard some people swear by the doji. What's yours?
  2. Uni


    I didn't realize h&s was a candle pattern.

  3. :)

  4. kbehr


    I thought that the doji was just a signal for reversal. Am I wrong?

  5. Interesting post.

    Yesterday, I selected 27 dogi and hammer stocks to watch. Five went up. All the others broke support and went lower. Out of the stocks that I was watching, I selected stocks showing these three criteria ( dogi or hammer with close greater than open, 50 ema > 200 ema and slow stochastic showing a buy signal as the best bet for moving up). All of of these failed too.

    New strategy today:D
  6. Did the high for yesterday take out the high of the hammer pattern? If not, you would not have entered anyway...so, to call it a failed hammer would not be fair.

    Post some symbols - I would be interested in looking at them. I had five hammers from Friday on my screen for yesterday - none of them triggered.
  7. I don't know if the Doji is a pattern by itself (maybe it is), but it can be a part of several different patterns.

    The Doji actually signals indecision - not a reversal.

    Dark Cloud Cover is a good reversal pattern that I have had success with over the years.
  8. You guys really need to do some research on what a candlestick pattern is - I am wondering if this thread is a joke, or if the posters are serious. H&S?

    I did a Google search - I have no clue what this site is, but they have links to some common candlestick patterns. Do your own search and READ SOME!


    here is my list: acai adpt aes alti amcc ccur cien corv cray crus cvsn dfib ets ingp jdsu lscc lu nt remc scmr sfe sons tgal txcc vert vtss webm. They are all stocks under 10 dollar. My choices were adpt alti crus scmr as best probability to move up. By your score, how did I do?
  10. Strongly agree...

    I've read some misinformation in this thread....its a little scary.

    Head & Shoulders is not a Japanese Candlestick pattern.

    A Doji is not a candlestick pattern...it is a single candlestick line that often represents indecision and not a reversal signal.

    Therefore, dojis, more often than not...require confirmation from the candlestick(s) that forms after it or prior in some particular patterns...

    to confirm either a reversal signal or a continuation signal.

    That's right...there are doji patterns that confirm a continuation pattern and not a reversal pattern.

    Thus, a doji can be part of a candlestick pattern that consists of several candlesticks.

    Dojis can be broken down into different sub-categories such as the Long Legged Doji.

    Something else, I took a peek at some of those chart symbols...

    I think you guys may want to spend a little extra time reseaching the internet or EliteTrader.com past posts about Dojis or Hammers because based on what I saw in those daily charts...

    you guys are using these patterns in error or allowing some software program to scan for such for you in error.

    Once again...use the internet or EliteTrader.com past posts on these candlestick patterns to gain some extra insight into these profitable patterns...

    Not an insult...just trying to help you not to lose your money when applying candlesticks in low probability setups or applying candlesticks in error (not a candlestick pattern).

    Here's an example...I took the first symbol of hoodooman list:


    My assumption is that its the daily chart that's being analyzed and not an intraday chart because no specific intraday interval was mentioned...

    see attachement.

    You'll notice in the attachement image that I use the words PT1, PT2 and PT3...

    those profit targets are based on candlestick s/r levels...

    PT1 is critical to never ignore and get greedy.

    That's where a trader banks some profits to ensure the trade position gets paid for and earns a little money even if the remainders get picked off at breakeven after the initial stop had been moved up into a breakeven trailing stop when PT1 was reached.

    Therefore, via the ACAI chart...in hindsight...had I traded that dark hammer that's outlined on Feb 24th...

    I would have gotten confirmation for an entry in the white candlestick @ 7.34 price on Feb 25th (entering near the close of that day)...

    and exiting part of my position @ 7.63 when PT1 was reached that afternoon on March 1st Monday.

    However...its obviously based on what's said above...after PT1 was reached...my remainders would have been picked off at breakeven on March 2nd Tuesday soon after 1030am est.

    Simply, the most important aspect in Japanese Candlestick analysis is trade management (maximizing profits and minimizing losses)...

    This is where candlestick traders usually make their next mistake...

    forgetting to map out the destination of the trade via candlestick analysis prior to entry.

    In addition, its important to distinquish between a candlestick pattern and a candlestick line...

    both are traded differently and one contains much more risk than the other no matter how many indicators you throw at it.

    Last of all...trade one thing...master whatever your trading via candlestick analysis.

    Thus, don't be bouncing from one stock to the next...a particular candlestick pattern will have different probabilities from one stock to the next.

    P.S. I am not a stock trader. I trade the Eminis. Yet, I'm very at home when analyzing stocks via candlestick patterns (price action only) because its where I started prior to becoming an Emini Futures trader.

    #10     Mar 9, 2004