High Profit Candlestick Patterns Pdf
Patch server asiasoft. I recently spent around $90 on a book about candlesticks called High Profit Candlestick Patterns by Stephen W. I was very excited someone was finally going to show me all the benefits of these mysterious creatures called Candlesticks, but as I read on I realized his book had nothing to do with Candlesticks at all.
Rather, it had to do with chart patterns. You see, I am a systems trader, and I code everything I hear about and read. I can’t help it; I have done that nonstop for close to 20 years. So, when I read something about things I have already tested, but called something else, then I know it isn’t that thing necessarily that leads to any success, it is the pattern itself that gets coded, not the name.Stephen Bigalow is a successful trader as I understood at the time I bought the book. I would not have bought the book if he was not. In fact, I won’t even buy a trading book unless I have reason to believe (and verifiable reason) that person has done something remarkable trading. So I will listen to what he has to say.As I went on reading, the text stressed how to use different patterns such as a Doji, Hammer, Hang Man, Harami, Shooting star, Morning Star etc.
In conjunction with different moving averages and oscillators and other technical trading tools. If you have followed my other articles on oscillators and moving averages, you already know where I stand with these technical indicators.
Does the existence of a Doji in some relation with a moving average portend a successful trade? Can a Doji (or any Candlestick pattern for that matter) be defined in some rigorous terms, or is it some funny notion that one cannot really define?A Doji on a chart looks like this:It is defined as a bar in a chart where the close and the open of the bar are very close together.Now, here’s the thing. The open and close could be at the bottom of the bar, or at the top of the bar. Like this (in the bottom of the bar):Now this particular bar is fairly short in height. It could be much taller. This bar is also a bit thicker (the difference between the open and the close is a little bigger than the previous image). What would happen if that thickness started getting thicker by any degree?Well then that is called a Spinning Top.
A Spinning Top then, is a Doji that is a little bit different. What specifically that difference is is not disclosed. It is a mystery.None of these relationships seem to get too concerned with the amplitude of the bar except on two or 3 bar Candlestick patterns. Now, this article is not intended to be an exhaustive look into Candlesticks, because I could go on and on about where one candle relationship blends into another. If I am going to truly test such things, the computer will require I define what I am testing. For candles, this will be difficult.I think the problem with candles as a study is the name and all the mystery turns it into something it is not. If I really want to define a Doji, I would have to do it by saying, a Doji is a bar where the close is within X percent of the open of the bar.
Now if I fail to define it further, then I will not be differentiating, as we had discussed between the Doji and the Spinning top. As a result, it might be good to define that the Doji could, for example, only allow the open and close to be between the upper quarter of the bar and the lower three quarters of the bar. We might go one step further and define how much variance we would allow for the Doji to have between the open and the close as a function of the range. This could go on and on until we had completely defined the Doji mathematically. From that starting point, we could begin to test the efficacy of a Doji in various circumstances.Let me address another topic while we are here in this important area that puzzled me for many years about technical analysis.
If I create a 5 minute chart and have a Doji on the chart, by simply shifting the time one minute forward or back, it would create, in most cases, a completely different Candlestick pattern.If I had put so much effort into defining the pattern only for it to be dramatically changed by a subtle shift in time, then what, I must ask myself, am I really defining?I love the notion that patterns in data that can reveal what is going on in a larger time frame. I believe there is value in this, but unfortunately, such patterns become quickly meaningless when contextualized as they are with Candlesticks.There are many two bar Candlestick patterns that are said to be indicative of a market turning up or down. The problem with these is the charts that point them out, have the same darned patterns occurring all over the chart in places that did not turn at all. So it becomes a matter of picking out what you want to see for that specific case. After working with computers for many years coding such things, any glimpse of hopefulness you might have in your eye is quickly extinguished when it comes to such scrutiny.It is said that when certain Candlestick patterns show up, and a close occurs above a previous bar high, for example, that is a Candlestick buy (as in the third bar up from the bottom in the image below).
This is such a (very bullish) pattern:Of course what really happened in this case is the market continued abruptly lower after a short rally upward. But here is what I really want you to see. On a shorter time frame, the chart really looks like this:As you can see, the pattern of one set of Candlesticks from the above, longer term Candlestick chart, just blended into a whole other set of different candles on this shorter term Candlestick chart.
To the left of center a bit, we see another buy before continuing lower.You may wish to dispute my claim Candlesticks as a method of technical analysis are questionable (particularly) if not better defined. That is up to you.
I do not intend to insinuate they are not of any value (afterall, they do help me to see my charts), but one should certainly not accept the conventional wisdom when it comes to these mysterious creatures (and their patterns) we call candlesticks without sufficient investigation.The book High Profit Candlestick Patterns goes on to cover all kinds of areas from options to wave counting to Fibonacci retracements, support and resistance, moving averages, gaps etc. All in the context of candles. I am not really sure (actually I am) it would (not) hold up to the mathematical scrutiny of being coded into a computer even though it is all important stuff to know.Maybe on a future article, I will dig into my old code and rigorously test some of these patterns using moving averages and Candlestick patterns associated with other technical indicators. Candle patterns, moving averages, indicators are all indicators.
It gives indications and way to unerstand what is happening in the scrip. If candles give diff views in short time frame what about indicators and moving averages. It also give the flaws still one shoul accept and feel candles are always in better position to give best scenario compare to others. Best thing about candles it that it gives you opportunity to buy at the lowest level and sell at the highest level. After long tiem studying and playing with all the tools i am 100% sure this is the best tool availble in the market compare to all other tools. I was making losses with all other things with lot of stress while analysis.
Candles has changed the perception of analysis. Better is that one should try to understand more closely what steve nisan and stepphen bigalow indicate that it should be used with western charting tools will increase the efficiency, that only thing i want to say.peter pietrowski 3.
Hi Rob, It seems to me that if there were a solid mathematical system for trading it would be perfect because true mathematics hold no room for error-they are either correct or incorrect. That being said any of the many systems we use to better our probabilities for making profitable trades hold only indicators not mathematical solutions.
Because the movement of the markets rely on human sentiment more than anything as concrete as mathematics any system can be seen differently by the one observing it. In the end it is all highly sophisticated guess work isn’t it? I do think that since the candlestick system has been around for centuries speaks for it’s validity as one of the more useful indicators.7. I comment when I especially enjoy a article on a site or I have something to contribute to the conversation. It’s triggeredby the passion communicated in the article I read. And afterthis post?High Profit Candlestick Patterns?
In Review by EminiForecaster Blog and Update History.I was actually excited enough to drop a comment:-) I do have some questions for you if you do not mind.Is it simply me or do a few of the remarkscome across as if they are written by brain dead folks?:-P And, if you are posting at additional online sites, I’d like to follow anything fresh you have to post.Could you make a list the complete urls of all your socialsites like your Facebook page, twitter feed, or linkedin profile?.22. Some of their guests are Micky Dolenz from the Monkees,Ernest Borgnine, Lindsay Wagner, Brigitte Nielson,Katey Sagal (Married with Children), Stephen Baldwin, DanielBaldwin, Barry Bostwick, Erin Murphy (Tabitha of Bewitched), Avery Brooks,Armin Shimmerman, Robert Picardo, Geri Reischel (Jan from The Brady Bunch), Susan Olsen (Cindy from TheBrady Bunch),Joe Pantoliano,Richard Kiel (“Jaws” Moonraker), Lou Ferrigno, William B Davies (X-Files-Cancer Man), Stella Stevens, Frank Stallone,Ron Bumblefoot ( Guns N Roses ) and a host of others.
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High Profit Candlestick Patterns Pdf In Hindi
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Contents ▾.Chart patterns form a key part of day trading. Candlestick and other charts produce frequent signals that cut through price action “noise”. The best patterns will be those that can form the backbone of a profitable day trading strategy, whether trading stocks, cryptocurrency of forex pairs.Every day you have to choose between hundreds trading opportunities.
This is a result of a wide range of factors influencing the market. Day trading patterns enable you to decipher the multitude of options and motivations – from hope of gain and fear of loss, to short-covering, stop-loss triggers, hedging, tax consequences and plenty more.Candlestick patterns help by painting a clear picture, and flagging up trading signals and signs of future price movements.
Whilst it’s said you’ll need to use technical analysis to succeed day trading with candlestick and other patterns, it’s important to note utilising them to your advantage is more of an art form than a rigid science.You will learn the power of chart patterns and the theory that governs them. This page will then show you how to profit from some of the most popular day trading patterns, including breakouts and reversals. Your ultimate task will be to identify the best patterns to supplement your trading style and strategies. Use In Day TradingUsed correctly trading patterns can add a powerful tool to your arsenal. This is because history has a habit of repeating itself and the financial markets are no exception. This repetition can help you identify opportunities and anticipate potential pitfalls.RSI, volume, plus support and resistance levels all aide your technical analysis when you’re trading. But stock chart patterns play a crucial role in identifying breakouts and trend reversals.
Candlestick Reversal Patterns Pdf
Mastering the art of reading these patterns will help you make smarter trades and bolster your profits, as highlighted in the highly regarded, ‘stock patterns for day trading’, by Barry Rudd. Breakouts & ReversalsIn the patterns and charts below you’ll see two recurring themes, breakouts and reversals. Breakout – A breakout is simply when the price clears a specified critical level on your chart. This level could by any number of things, from a Fibonacci level, to support, resistance or trend lines. Reversal – A reversal is a simply a change in direction of a price trend. That change could be either positive or negative against the prevailing trend. You may also hear it called a ‘rally’, ‘correction’, or ‘trend reversal’.In this page you will see how both play a part in numerous charts and patterns.
You can also find specific reversal and breakout. Candlestick ChartsCandlestick charts are a technical tool at your disposal. They consolidate data within given time frames into single bars.
Not only are the patterns relatively straightforward to interpret, but trading with candle patterns can help you attain that competitive edge over the rest of the market.They first originated in the 18th century where they were used by Japanese rice traders. Since Steve Nison introduced them to the West with his 1991 book ‘Japanese Candlestick Charting Techniques’, their popularity has surged.Below is a break down of three of the most popular candlestick patterns used for day trading in India, the UK, and the rest of the world. Shooting Star CandlestickThis if often one of the first you see when you open a pdf with candlestick patterns for trading. This bearish reversal candlestick suggests a peak.
It is precisely the opposite of a hammer candle. It won’t form until at least three subsequent green candles have materialised. This will indicate an increase in price and demand.
Usually buyers lose their cool and clamber for the price to increasing highs before they realise they’ve overpaid.The upper shadow is usually twice the size of the body. This tells you the last frantic buyers have entered trading just as those that have turned a profit have off-loaded their positions. Short-sellers then usually force the price down to the close of the candle either near or below the open.
This traps the late arrivals who pushed the price high. Panic often kicks in at this point as those late arrivals swiftly exit their positions.Doji CandlestickOne of the most popular candlestick patterns for trading forex is the doji candlestick (doji signifies indecision). This reversal pattern is either bearish or bullish depending on the previous candles. It will have nearly, or the same open and closing price with long shadows. It may look like a cross, but it can have an extremely small body. You will often get an indicator as to which way the reversal will head from the previous candles.If you see previous candles are bullish, you can anticipate the next one near the underneath of the body low will trigger a short/sell signal when the doji lows break. You’ll then see trail stops above the doji highs.Alternatively, if the previous candles are bearish then the doji will probably form a bullish reversal.
Above the candlestick high, long triggers usually form with a trail stop directly under the doji low.These candlestick patterns could be used for intraday trading with forex, stocks, cryptocurrencies and any number of other assets. But using candlestick patterns for trading interpretations requires experience, so practice on a demo account before you put real money on the line.Hammer CandlestickThis is a bullish reversal candlestick. You can use this candlestick to establish capitulation bottoms.
These are then normally followed by a price bump, allowing you to enter a long position.The hammer candlestick forms at the end of a downtrend and suggests a near-term price bottom. The lower shadow is made by a new low in the downtrend pattern that then closes back near the open. The tail (lower shadow), must be a minimum of twice the size of the actual body.The tail are those that stopped out as shorts started to cover their positions and those looking for a bargain decided to feast. Volume can also help hammer home the candle. To be certain it is a hammer candle, check where the next candle closes.
It must close above the hammer candle low.Trading with Japanese candlestick patterns has become increasingly popular in recent decades, as a result of the easy to glean and detailed information they provide. This makes them ideal for charts for beginners to get familiar with.More Popular Day Trading Patterns Morning Consolidation PatternMany a successful trader have pointed to this pattern as a significant contributor to their success. Look out for: At least four bars moving in one compelling direction. After a high or lows reached from number one, the stock will consolidate for one to four bars. The high or low is then exceeded by 10:10 am.It’s easy to see why this pattern is popular for the active day trader. Firstly, the pattern can be easily identified on the chart. Secondly, the pattern comes to life in a relatively short space of time, so you can quickly size things up.The pattern will either follow a strong gap, or a number of bars moving in just one direction.
This means you’ll definitely be in a stock with volatility, an essential component for turning an intraday profit. Late Consolidation PatternIt’s often challenging to turn a profit as the day progresses, so it’s probably no surprise to learn that perfecting this trading pattern is no easy feat. In the late consolidation pattern the stock will carry on rising in the direction of the breakout into the market close.Look out for: Traders entering after 13:00, followed by a substantial break in an already lengthy trend line. Check the trend line started earlier the same day, or the day before. Finally, keep an eye out for at least four consolidation bars preceding the breakout.There are some obvious advantages to utilising this trading pattern.
The stock has the entire afternoon to run. So instead of the hectic morning where you can’t miss a beat, you actually have the time to kick back and watch the play evolve. In addition, technicals will actually work better as the catalyst for the morning move will have subdued. Stock PatternsIn few markets is there such fierce competition as the stock market. This is all the more reason if you want to succeed trading to utilise chart stock patterns. By viewing a series of stock price actions over a period of time (intraday), you’ll be in a better position to predict how they’re going to behave in future.Visit our ‘‘ page for detailed examples of stock trading patterns.
Using Price ActionMany strategies using simple price action patterns are mistakenly thought to be too basic to yield significant profits. Yet price action strategies are often straightforward to employ and effective, making them ideal for both beginners and experienced traders.Put simply, price action is how price is likely to respond at certain levels of resistance or support. Using price action patterns from pdfs and charts will help you identify both swings and trendlines.Whether you’re day trading stocks or forex with price patterns, these easy to follow strategies can be applied across the board. Zone StrategySo, how do you start day trading with short-term price patterns? Downloading a pdf will likely tell you to employ a ‘zone strategy’.
One obvious bonus to this system is it creates straightforward charts, free from complex indicators and distractions.Dead ZoneThis empty zone tells you that the price action isn’t headed anywhere. There is no clear up or down trend, the market is at a standoff. If you want big profits, avoid the dead zone completely. No indicator will help you makes thousands of pips here.
The Red ZoneThis is where things start to get a little interesting. Once you’re in the red zone the end goal is in sight, and that one hundred pip winner within reach. For example, if the price hits the red zone and continues to the upside, you might want to make a buy trade. It could be giving you higher highs and an indication that it will become an uptrend.This will be likely when the sellers take hold. If the price hits the red zone and continues to the downside, a sell trade may be on the cards.
You’d have new lower lows and a suggestion that it will become a down trend. The End ZoneThis is where the magic happens. With this strategy you want to consistently get from the red zone to the end zone. Draw rectangles on your charts like the ones found in the example. Then only trade the zones. If you draw the red zones anywhere from 10-20 pips wide, you’ll have room for the price action to do its usual retracement before heading to the downside or upside.
Outside Bar At Resistance Or SupportYou’ll see a bullish outside bar if today’s low exceeded yesterdays, but the stock still rallies and closes above yesterday’s high. If the complete opposite price action took place, you’d have yourself the perfect bearish example.Unfortunately, it isn’t as straightforward as identifying an outside candlestick and then just placing a trade.
It’s prudent to find an outside day after a major break of a trend.Spring At SupportThe spring is when the stock tests the low of a range, but then swiftly comes back into trading zone and sets off a new trend. One common mistake traders make is waiting for the last swing low to be reached. However, as you’ve probably realised already, trading setups don’t usually meet your precise requirements so don’t stress about a few pennies.Little To No Price RetracementPut simply, less retracement is proof the primary trend is robust and probably going to continue. Forget about coughing up on the numerous Fibonacci retracement levels. The main thing to remember is that you want the retracement to be less than 38.2%. This means even when today’s asset tests the previous swing, you’ll have a greater chance that the breakout will either hold or continue towards the direction of the primary trend.Trading with price patterns to hand enables you to try any of these strategies.
Find the one that fits in with your individual trading style. Remember, you’ll often find the best trading chart patterns aren’t overly complex, instead they paint a clear picture using minimal indicators, reducing the likelihood of mistakes and distraction. Consider Time FramesWhen you start trading with your short term price patterns pdf to hand, it’s essential you also consider time frames in your calculations. In your market you’ll find a number of time frames simultaneously co-existing. This means you can find conflicting trends within the particular asset your trading. Your stock could be in a primary downtrend whilst also being in an intermediate short-term uptrend.Many traders make the mistake of focusing on a specific time frame and ignoring the underlying influential primary trend. Usually, the longer the time frame the more reliable the signals.
When you reduce your time frames you’ll be distracted by false moves and noise.Many traders download examples of short-term price patterns but overlook the underlying primary trend, do not make this mistake. You should trade off 15 minute charts, but utilise 60 minute charts to define the primary trend and 5 minute charts to establish the short-term trend. Wrapping UpOur understanding of chart patterns has come along way since the initial 1932 work of Richard Schabacker in ‘Technical Analysis and Stock Market Profits’. Schabacker asserted then, ‘any general stock chart is a combination of countless different patterns and its accurate analysis depends upon constant study, long experience and knowledge of all the fine points, both technical and fundamental’ So whilst there is an abundance of patterns out there, remember accurate analysis and sustained practice is required to fully reap their benefits.