After basic understanding of candlestick for beginners, Abidea teamwill tell you about the most commonly used basic pattern in trading to make profit. We love to share our tested knowledge in this field and the most common practice for trading. If you have read the previous article we assume that you know all about candlesticks.
Trading is maths, its not magic and its certainly not gambling so stay focused and learn these basic steps.
Bearish Pin Bar
This is a bearish pin bar consists of Shadow and real body. For a pin bar candlestick Shadow should consists of 2/3 of overall length and real body consist of 1/3 of real body length. Normally we find the pin bar after a bullish ( green – positive ) movement.
This tell us that a large number of seller are entering into the market and bearish ( negative – red ) are gaining control so the pin bar is usually followed up by bearish movement or negative movement.
Bullish Pin Bar:
This type of candlestick is known as bullish pin bar. Note that nose should be very small for a bullish pin bar followed up by a long shadow/tail. Tail must be the atleast two time of the real body.
This type of pin bar suggest that bulls or buyers are entering in to the market which is stopping the further flow of downward movement. Due to which market will see a positive change. These type of bullish pin bar is followed by a bullish movement.
Morning Star Candlestick
These are Morning Star Candlesticks. On the left we have Bullish morning star candlestick.
At first we have a strong bullish candle, followed by an equal sized long tail doji candle and lastly a bearish candle. The doji candle in the center suggests that the bulls have entered into the markets and push the price down although failed to move price up but the important part over here is Bears cannot pull price any lower than previous candlestick. This suggest that they are losing control and momentum. Strong Bullish candle after doji candle confirms that bulls have gain control, so we can predict a raise in the price.
2. Bearish Morning Star is simply the inverse of bullish morning star, note that doji is upside down in this.
These are the engulfing pattern on the left we have bullish engulfing pattern and on the right we have bearish engulfing pattern both are inverse of each other.
Let us explain bullish engulfing pattern that how it works. In Bullish Engulfing Pattern you can see the last bullish candle is larger than previous four to five candlesticks. This shows that a large number of bulls are entering into the market which clearly shows a change in the market.
Bearish Engulfing Pattern is simply the inverse.
These are some very commonly use pattern to predict the market. Note that you cannot simple predict the market on these candlesticks pattern as in real a lot of factors are responsible for the change in market as well. So always do research and testing while entering in to the real game.
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