05/03/2021
Candle sticks
Marubozu – no upper and lower shadhow
1. Bullish Marubozu open=low and high=close
2. Barish Marubozu open=high and low=close
Spinning Top- Indecision and consolidation or trend reversal
1. The candles have a small real body
2. Upper and lower shadow are almost equal
(Spinning tops in in a downtrend book profit if you are in short position
Or enter in a new long/short position only take half position)
(spinning tops in an uptrend book profit ifyou are in long position or you could center in a
new long short position. Only take half positon.
Doji – The Doji is very similar to the spinning tops except that it does not have a real
Body at all. This means the open and close prices are equal.
1. A Doji indicates indecision in the market. Indicator for trend reversal as well
Paper Umbrella:- The paper umbrella is a single candle stick pattern which helps traders in setting up
directional trade.
Small upper body
Long lower shadow. To qualify a candle as a paper umbrella the length of the lower shadow
should be at least twice the length of the real body.
1. Hammer – paper umbrella appears at the bottom end of the downward rally
Indicates trend reversal to bullish. Buy at close. SL at low.
2. Hanging Man : paper umbrella appears at the top end of a downward rally.
Indicates trend reversal to bearish. Shell at close SL at High.
Shooting Star.
The shooting star is a single candle stick pattern which helps traders in stetting up directional
Trades. The shooting star is bearish Patten hence the prior trend should be bullish.
1. Small lower body
2. Long upper shadow. The longer the upper wick the more bearish is the pattern.
3. Sell at close SL at High
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Multiple Candle Pattern
Engulfing Pattern
Bullish Engulfing pattern
The prior trend should be a downtrend
First day of the pattern (C1) should be a red candle reconfirming the bearishness in the market
The candle on the 2nd day of pattern (C2) should be Green candle long enough to engulf the red
Candle.
Buy at Close of C2. SL at low of C1/C2.
Bearish Engulfing Pattern.
The prior trend should be a uptrend
The first day of the pattern (C1) should be green candle reconfirming the bullishness in the
Market
The candle on the2nd day of pattern (C2) should be a red candle long enough to engulf the
Green candle.
Sell at close of C2. SL at High of C1/C2.
Partial Engulfing Pattern.
Partial Engulfing is a two candle pattern this happen second candle partial engulf first candle
Indicate trend reversal. Very similar to Engulfing
The Piercing Pattern (Engulfing)
The prior trend should be a downtrend
The first day of the pattern (C1) should be a red Candle reconfirming the bearishness I the
Market
The candle on the 2nd day of pattern (C2) should be green candle long enough to engulf 50% to
100% of the red candle.
Buy at Close of C2. SL at Low of C1/C2
The dark cloud cover
The prior trend should be a uptrend
The first day of the pattern (C1) should be a green candle reconfirming the bullishness in the
Market
The candle on the 2nd day of pattern (C2) should be a red candle long enough to engulf 50% to
100% of the green candle
Sell at close to C2 SL at High of C1/C2
Harami Pattern
Haramais two candle pattern. The first candle is usually long and the second candle has small
Body. Indicates trend reversal harami is old Japanese for pregnant.
Bullish Harami Pattern.:The prior trend should be a downtrend
The first day of the pattern(C1) should be a red candle
Reconfirming the bearishness in the market
The candle on the 2nd day of pattern (C2) should open higher than C1 close and close lower than
C1 open, thereby bears are in panic
Buy at close of C2. SL at Low of C1/C2
Bearish Harami Pattern:The prior trend should be a uptrend
The first day of the pattern (C1) should be a green candle
Reconfirming the bullishness in the market
The candle on the 2nd day of pattern (C2) should open lower than C1 close and close higher than
C1 open, thereby bulls are in panic
Sell at close of C2. SL at High of C1/C2
Than C1 open, thereby bears are in panic
Buy at close of C2. SL at low of C1/C2
Bearish Harami pattern(Engulfing)
The prior trend should be a uptrend
The First day of the pattern C1 should be a green candle reconfirming thebullishness I the
Market.
The candle on the 2nd day of pattern (C2) should open lower than C1 Close and close higher than
C1 open thereby hulls are in panic
Sell at close of C2. SL at High of C1/C2
Gap up opening and Gap down opening
Morning star pattern and evening star pattern
Evening Star Pattern
Moving average SMA and ESM
200 bas
200/50 cross over SMA
13/48 cross over SMA(better to use)
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MACD
Stochastics Indicator :- Leading indicator
RSI Indicator
I Step
II Step
III Step
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