Price action trading1

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  • A Japanese candlestick is made of three things :the upper shadow which represents the high of the candle, then you have the real body which is the difference between the open and the close and finally the lower shadow representing the low of the candle
  •  psychology :
  • http://blackswanfx.blogspot.ca/
  • http://blackswanfx.blogspot.ca/
  • Price action trading1

    1. 1. Dow Theory: Father of Technical Analysis HH LH HH LH HH LL LH HL HH LL HL LL HL
    2. 2. [Anatomy ofa Candlestick] Basic Candlestick : Upper Shadow  Upper Shadow  Real Body  Lower Shadow Real Body “Technical Analysis ”Download from  http://www.mediafire.com/view/?l0tppaop5jhl0as Lower Shadow
    3. 3. Green hammer Red hammer [Hanging man]
    4. 4. Pin Bar Candlestick Reversal Pattern
    5. 5. Where to look for a Pin Bar Candlestick ?1) Previous major swing highs or swing lows2) Any major levels of Support and Resistance 3) Trend Lines 4) At Fibonacci levels**Where there is strong confluence or acombination of many of the above points
    6. 6. Candlestick Pattern - DefinitionWhat is a Morning Star Pattern?A true morning star pattern is a bullish reversal signal, andtherefore, only occurs after an established downtrend in price.Traders vary on what they consider to be a downtrend. Somerequire lower highs and lower lows, while others require only ashort streak of consecutive lower candlesticks.
    7. 7. Well, here is my fovourite candlestick patters which i use to trade everyday:Bullish Reversal1. Shooting Star2. Bullish Engulfing3. Bullish Abandoned Baby4. Piercing Line5. Morning StarBearish Reversal1. Hammer2. Bearish Engulfing3. Bearish Abandoned Baby4. Dark Cloud Cover5. Evening Star
    8. 8. Abandoned Baby patternThe Abandoned Baby pattern is a rare occurrence but highly reliable.Its a major reversal pattern, similar to the island reversal chartpattern.
    9. 9. Bearish Abandoned Baby• Reversal pattern• Appears after a strong uptrend• Formation of 3 candles• 1st candle is a long green candle in the direction of the trend• 2nd candle is a Doji gapping away from the candles on each side• There must be no shadows or body overlapping the Doji• 3rd candle is a long red candleBullish Abandoned Baby• Reversal pattern• Appears after a strong downtrend• Formation of 3 candles• 1st candle is a long red candle in the direction of the trend• 2nd candle is a Doji gapping away from the candles on each side• There must be no shadows or body overlapping the Doji• 3rd candle is a long green candle
    10. 10. Bar chart or Candlestick?
    11. 11. Japanese candlesticks are not lagging, they reflect priceaction in an easier way to understand. Since they occupymore space on the chart, the relationship between theopen and the close is clearer to observe than withbarcharts. Candles patterns are often ahead of indicatorsto signal market reversals. Key Points• Candlestick patterns do not give price targets• Can be used in any market and any timeframe• Short bodies indicate indecision while long bodies show clear opinion• Shadows represent price extremes• Dont analyze candle patterns in isolation, always consider the prior trend (exception: Kicking pattern)• Confirm with horizontal support/resistance levels or trendlines• For a signal, wait for the close of the candle to reveal itself
    12. 12. • Shadows also called wicks represent the high and the low of the candle or price extremes• To the Japanese the action comprised between the open and the close is the most essential• The real body is the price action between the open and the close• The shadow on the top is called the hair and on the bottom the tail• A candle without shadows is called a Shaved candle (Marubozu)
    13. 13. CandleStickReference
    14. 14. TraderTo Be Successful Traders 10 % » Trading Tactics 30 % » Money Management 60 % » Psychology &Discipline
    15. 15. TLEAR A D E Learn to trade ADE For a Living
    16. 16. Bullis Bearis Name Grouping Usage Notice h h Pin Bar Engulfing Piercing Pattern / Pin bar Dark Cloud Cover Morning Star / Evening Star Mother If ≥ 150 bar pips may be Inside Bar should be “over stop Break out Setup ≤ 150 loss” pips False break Fakey Setup [mostly composite
    17. 17. Take Profit and Stop lossTake Profit Stop lossPoint1. Open 2 order Place at moreby 1st order place than lower aboutTP at 1R and 2nd 5-10 pipsorder use trailingstop at 1R too.1. 1R take profit

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