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<ul><li>Daily Market Analysis </li></ul><ul><li>Daily Strategy Analysis (Live FxAlerts) </li></ul><ul><li>3 Candle Patterns – Learning to Read with Complexity and Limitations </li></ul><ul><li>Marcello Ducille’s Underground System Demonstration </li></ul><ul><li>Question & Answer Session </li></ul>
There are a nearly infinite number of chart patterns with an equally long dictionary of nomenclature, but among the most commonly recognized are the essentials of Japanese candlesticks. We have covered a few of these, continuing today with a few 3-candlestick patterns. Courtesy of google images Forex Candlesticks
The morning star and the evening star are among thee more commonly used 3 candle patterns that you usually find marking the end of a trend. They are reversal patterns that can be targeted through these characteristics: The first candle is bullish and part of a recent uptrend The second has a small body, thought to represent some indecision in the market. The third candle is felt to be a confirmation that a reversal is in play, as the candle closes beyond the midpoint of the first candle. Courtesy of google images Morning & Evening Stars
The 3 white soldiers are formed when three long bullish candles follow a downtrend, signaling a reversal has occurred, note a signal of something that has really already occurred. The 3 black crows form the mirror pattern of three long bearish candles following an uptrend, again signaling a reversal that has already occurred. The strongest set of this pattern is generally felt to exist when the third candle is the same size or larger than the second candle's body with a very short shadow Courtesy of google images Soldiers and Crows
The 3 Inside Up formation is considered a trend-reversal pattern that is found at the bottom of a downtrend indicating that is possibly over and reversing. It is generally defined by the following characteristics: 1 st candle: found at the bottom of a downtrend and is a long bearish candlestick. 2 nd candle: should make it up to the midpoint of the first candle or beyond 3 rd candle: closes above the first candle's high signaling a confirmation that buyers have likely overpowered the strength of the downtrend The 3 Inside Down formation mirrors this a the top of an uptrend to indicate likely reversal to the bearish direction. Courtesy of google images Three Inside Up or Down
Though candlesticks are the base of communication and interpretation for most Forex traders, their interpretation can be as complex as one’s own imagination. The key is to find what works, test it thoroughly and stick to it! Closing Notes
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