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Chapter 9, Part IV. Single Candlestick Patterns.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, May 26, 2011.

  1. Administrator

    Administrator Just Administrator :-)

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    Part IV. Single Candlestick patterns. [​IMG]
    Commander in Pips: So, we’ve studied the major properties of candlesticks, and I hope that now you easily can explain what a particular candle shows and what kind of price action was happening during its period. Now it’s time to start with patterns – combinations of 1-3 candles that give you early signals about possible future price action. Patterns are an absolutely practical thing and they are taken for education from real price behavior. So, it is to your benefit to learn all these patterns well. And they will serve you much in your real trading. In this chapter we will start from patterns that consist of just a single candle.

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    Pipruit: Ok, Sir, I’m ready.
    Hammer and Hanging Man

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    Commander in Pips: Although Hammer and Hanging Man look identically, they carry quite different role, depending on the previous price action. The common properties of these patterns include very long lower shadow, small body (black or white), and small or even absence of upper shadow.

    #1 GBP/USD Weekly Chart – Hammer and Hanging Man examples
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    Although on the chart as Hammer as Hanging man are black – they both could be white and white patterns will have the same sense as black ones.

    In general, the Hammer is bullish reversal pattern and usually forms after previous downtrend. Very often you can meet it at support levels. It is called “Hammer” because the market shows a kind of “hammering up” from the bottom.

    As we’ve already discussed, the long lower shadow of hammer suggests that although the bears tried to push the market lower – bulls were able to regain control and forced the bears back at the end of trading period.
     
    #1 Administrator, May 26, 2011
    Lasted edited by : Feb 18, 2016
    Hamza Samiullah and fran alvarez like this.

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