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Dow Theory: Father of Technical Analysis

                   HH
                               LH
              HH
                                         LH
        HH
                          LL                       LH
                   HL
  HH                                LL
             HL
                                              LL
       HL
[Anatomy of
a 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
Green hammer
               Red hammer [Hanging man]
Pin Bar Candlestick Reversal Pattern
Where to look for a Pin Bar Candlestick ?




1) Previous major swing highs or swing lows


2) Any major levels of Support and Resistance

  3) Trend Lines

 4) At Fibonacci levels


**Where there is strong confluence or a
combination of many of the above points
Candlestick Pattern - Definition




What is a Morning Star Pattern?

A true morning star pattern is a bullish reversal signal, and
therefore, only occurs after an established downtrend in price.
Traders vary on what they consider to be a downtrend. Some
require lower highs and lower lows, while others require only a
short streak of consecutive lower candlesticks.
Well, here is my fovourite candlestick patters which i use to trade everyday:

Bullish Reversal
1. Shooting Star
2. Bullish Engulfing
3. Bullish Abandoned Baby
4. Piercing Line
5. Morning Star

Bearish Reversal
1. Hammer
2. Bearish Engulfing
3. Bearish Abandoned Baby
4. Dark Cloud Cover
5. Evening Star
Abandoned Baby pattern




The Abandoned Baby pattern is a rare occurrence but highly reliable.
It's a major reversal pattern, similar to the island reversal chart
pattern.
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 candle


Bullish 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
Bar chart or Candlestick?
Japanese candlesticks are not lagging, they reflect price
action in an easier way to understand. Since they occupy
more space on the chart, the relationship between the
open and the close is clearer to observe than with
barcharts. Candles patterns are often ahead of indicators
to 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
• Don't 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
• 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)
CandleStick
Reference
Trader




To Be Successful Traders
 10 % » Trading Tactics
 30 % » Money Management
 60 % » Psychology &
Discipline
T
LEAR
   A
   D
   E




 Learn to
  trade          ADE

  For a Living
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
Take Profit and Stop loss
Take Profit          Stop loss
Point
1. Open 2 order      Place at more
by 1st order place   than lower about
TP at 1R and 2nd     5-10 pips
order use trailing
stop at 1R too.
1. 1R take profit
Price action trading1
Price action trading1

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Price action trading1

  • 1.
  • 2. Dow Theory: Father of Technical Analysis HH LH HH LH HH LL LH HL HH LL HL LL HL
  • 3. [Anatomy of a 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
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12. Green hammer Red hammer [Hanging man]
  • 13. Pin Bar Candlestick Reversal Pattern
  • 14. Where to look for a Pin Bar Candlestick ? 1) Previous major swing highs or swing lows 2) Any major levels of Support and Resistance 3) Trend Lines 4) At Fibonacci levels **Where there is strong confluence or a combination of many of the above points
  • 15. Candlestick Pattern - Definition What is a Morning Star Pattern? A true morning star pattern is a bullish reversal signal, and therefore, only occurs after an established downtrend in price. Traders vary on what they consider to be a downtrend. Some require lower highs and lower lows, while others require only a short streak of consecutive lower candlesticks.
  • 16. Well, here is my fovourite candlestick patters which i use to trade everyday: Bullish Reversal 1. Shooting Star 2. Bullish Engulfing 3. Bullish Abandoned Baby 4. Piercing Line 5. Morning Star Bearish Reversal 1. Hammer 2. Bearish Engulfing 3. Bearish Abandoned Baby 4. Dark Cloud Cover 5. Evening Star
  • 17. Abandoned Baby pattern The Abandoned Baby pattern is a rare occurrence but highly reliable. It's a major reversal pattern, similar to the island reversal chart pattern.
  • 18. 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 candle Bullish 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
  • 19. Bar chart or Candlestick?
  • 20. Japanese candlesticks are not lagging, they reflect price action in an easier way to understand. Since they occupy more space on the chart, the relationship between the open and the close is clearer to observe than with barcharts. Candles patterns are often ahead of indicators to 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 • Don't 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
  • 21. • 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)
  • 23.
  • 24.
  • 25. Trader To Be Successful Traders 10 % » Trading Tactics 30 % » Money Management 60 % » Psychology & Discipline
  • 26. T LEAR A D E Learn to trade ADE For a Living
  • 27.
  • 28. 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
  • 29.
  • 30. Take Profit and Stop loss Take Profit Stop loss Point 1. Open 2 order Place at more by 1st order place than lower about TP at 1R and 2nd 5-10 pips order use trailing stop at 1R too. 1. 1R take profit

Editor's Notes

  1. 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
  2.  psychology :
  3. http://blackswanfx.blogspot.ca/
  4. http://blackswanfx.blogspot.ca/