Profitable Candlestick Patterns

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Text of Profitable Candlestick Patterns

  • Profitable Candlestick patternskermitp@tradingourway.com Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Plus, the Trading Strategies to do all of the aboveAdjust your Trading strategy to market conditions You will learn to:CRUISE to the Panama Canalon CARNIVAL LIBERTY Set sail April 12, 2008 for 8 glorious days! Seminar fee is $795 We had an Early Bird special of $495 that Expired Oct 29th IF you sign up today or within 7 days well honor the $495 Use Promo code FTL110407, good until 11/12/07

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    http://tradingourway.com/CruiseRegistration.htm or call Kermit Prather @ 813-681-5427

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Topics and Patterns for DiscussionBasics of CandlesticksMajor Bearish patternsMajor Bullish patternsHow to improve probabilities and profitabilityRecent examples for each candlestick patternWhere to find more information on candlesticksSeminar at Sea special pricing for attendees only

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Candlestick BasicsJapanese Rice Traders created them over 400 years agoSteve Nison is credited with introducing them into the U S marketsGregory Morris and Stephen Bigalow are the other 2 major candlestick gurusThere are over 100 Candlestick patternsCandlesticks show investor sentiment more visual than OHLC bars

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bearish CandleSometimes referred to as a Black Candle

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish CandleSometimes referred to as a White Candle

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Indecisive CandlesDoji at the top should never be ignored The smaller the body the more indecisionDoji body is very small 10% of daily range

    Dragon-Fly Tombstone Long-legged

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Indecisive Candles (cont)Spinning-Top No one won the battle of the Bulls and BearsBody is less than 1/3rd of the candle range H LThe tails are longer than the body

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Candlestick Web Siteswww.tradingourway.com

    www.candlestickforum.com - Steve Bigalow

    www.candlestickchart.com/glossary.html - Litwit.com

    www.thepatternsite.com - Tom Bulkowski

    www.stockcharts.com - John Murphys

    www.tradeon.com for TC2007users

    www.stockfetcher.com Scans for candlestick patterns and more

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Candlestick PatternsCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Engulfing Morning Star Hammer Three White Soldiers Kicking

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Engulfing DefinitionCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bullish Reversal 63% of the time

    How to Identify it Candle 1 is a bearish candle Candle 2 completely engulfs the body of the candle 1 Stock in a downtrend or consolidating Pattern suggests downtrend has lost momentum and the bulls may be gaining strength Engulfing pattern is also the first two candles of the Three Outside patterns. Confirmation is suggested

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Engulfing- bad oneCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Engulfing- bad twoCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Engulfing good oneCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Engulfing good twoCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Morning StarCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bullish Reversal 78% of the time

    How to Identify it First candle is a long black candle Second candle gaps down and trades within a small range and closes at or near its open.The third candle is a white candle Stock has in a downtrend or consolidating Pattern suggests the trading sentiment has changed and trend reversal is a high probability No confirmation is required or suggested

    Note: The second candle can be a Doji or spinning top

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Morning Star - goodCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Morning Star - badCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • HammerCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bullish Reversal 60% of the time

    How to Identify it Single candle pattern Candle can be bullish or bearish Signal considered stronger if candle is bullish Candle body is less than 1/3 of the range H L Stock is in a downtrend Long tail implies sharp sell-off after open but the bulls rallied and won the battle suggest more buying to come Requires confirmation

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Three White SoldiersCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bullish Reversal 82% of the time

    How to Identify it Three white candles occur, each with a close above the previous candle Each candle opens within the body of the previous candle Each candle closes near or at its high Stock is in a downtrend Pattern suggests the market has been selling of for too long, and buyers are beginning to come back into it No confirmation is required or suggested

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Three White Soldiers - goodCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Three White Soldiers - badCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish KickerCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bullish Reversal 53% of the time

    How to Identify it The first candles open and the second candles open are the same. The price movement is in opposite directions from the opening price. The trend has no relevance in a Kicker situation. The signal is usually formed by surprise news before or after market hours. The price never retraces into the previous candle's trading range. No confirmation is required or suggested The first day is a Black Marubozu day The second day is a White Marubozu day that gaps upward

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Kicker - goodCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bullish Kicker - badCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Stockfetcher.com Bullish Scans

    Bullish EngulfingBullish Morning Doji StarHammerBullish Three White SoldiersBullish Kicking

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bearish Candlestick PatternsCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Engulfing Evening Star Hanging Man Three Black Crows Kicking

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bearish EngulfingCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bearish Reversal 79% of the time

    How to Identify it First candle is a white candle Second candle is Bearish and its body completely Engulfs the first candles candle body Stock has been in an uptrend Pattern suggests the bears have taken control and the trend is about to reverse. Confirmation is suggested

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bearish Engulfing - BadCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Bearish Engulfing - GoodCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Copyright 2007, TradingOurWay, Prepared by Kermit Prather

  • Evening StarCopyright 2007, TradingOurWay, Prepared by Kermit Prather

    Bearish Reversal 72% of the time

    How to Identify it First candle is a long white candle Second candle trades within a small range and closes at or near its open.The third candle is a black candle Stock is in an uptrend Pattern suggests the trading sentiment has changed and trend reversal is high probability No confirmation is required or suggested

    Note: The second candle can be a Do