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MASTER Candlestick Patterns in 125 Minutes (YES, IT'S FREE) — Transcript

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0:00in this ultimate video course you will
0:02learn everything you need to know about
0:04Candlestick patterns for trading stocks
0:06Forex crypto or any other Financial
0:09Market by watching the full course you
0:12will not only be able to trade
0:14Candlestick patterns like a pro but you
0:16will also gain the edge to profit in
0:19both Bull and bar
0:22markets so hello guys and welcome to
0:25this Candlestick pattern trading course
0:27this right here is going to be a pretty
0:30long video so make sure to you know grab
0:33a pen and paper perhaps grab a coffee as
0:36well and without further Ado let's get
0:38started here and let's begin here by
0:40super quickly taking a look at what you
0:42can expect to learn from this course we
0:44will start this course off by taking a
0:46look at both how to read but also how to
0:51understand candlesticks and Candlestick
0:53patterns we will take a look at the very
0:55Basics but we will also look at Concepts
0:58like Candlestick strength
1:00Candlestick momentum we will take a look
1:02at Wicks and much more after chapter one
1:06when we have a good understanding of the
1:08basics it's time for chapter 2 and in
1:11this chapter we will take a look at
1:12Candlestick pattern classifications in
1:15order to master Candlestick patterns
1:17it's of course very important to
1:19understand you know what type of
1:21Candlestick patterns you are trading
1:23what types do you want to focus on what
1:25types do you want to avoid and so on and
1:28so on so chapter 2 here is very
1:30important and this will be a quick
1:32chapter um because every single candas
1:35pattern has three different categories
1:38every pattern has a complexity level
1:41every pattern has a direction and a type
1:45and as I said don't worry if this sounds
1:46a little bit complicated right now it
1:49will be clear very very soon in chapter
1:513 we are going to take a look at the
1:53best reversal Candlestick patterns and
1:56we will not only look at the patterns
1:59but we will also take a look at trading
2:01strategies for every single Candlestick
2:03pattern and reversal Candlestick
2:05patterns are one of the most effective
2:07Candlestick types and if you learn all
2:09of these patterns and even more
2:12importantly if you also learn about the
2:14trading strategies for these patterns
2:17I'm sure you will become a much better
2:19Trader and for example if you take a
2:21look at this image right here in the
2:23upper right corner this right here is an
2:25example of a reversal Candlestick
2:28pattern and we will take a look at that
2:30exact pattern and how to trade it later
2:32on in this video and so much more uh but
2:36now in chapter 4 it's time to take a
2:39look at the best continuation
2:41Candlestick patterns and we will of
2:43course also take a look at trading
2:45strategies for every single pattern
2:47understanding continuation patterns is
2:49something you pretty much can't do
2:51without as a Trader and in chapter 4 I
2:54will talk about multiple continuation
2:56patterns including one of my personal
3:00favorite patterns of all time so make
3:02sure to stay tuned for that and last but
3:05definitely not least we're going to take
3:07a look at the dogee and the spinning top
3:11candles and these are a specific family
3:15of Candlestick patterns that is super
3:18important uh to understand as a Trader
3:20these are patterns that happens all the
3:22time in the market and they can provide
3:25significant signals uh both warning
3:28signs but also ENT signals that we as
3:31Traders need to be able to utilize but
3:34all right guys let's get started here
3:36with chapter one all right so before we
3:38start looking at all the Candlestick
3:40patterns and you know everything you
3:43need to know about the actual
3:45candlesticks we of course have to start
3:47here with the basics and that is of
3:50course how do we read candlesticks and
3:52how do we read Candlestick charts well
3:56first things first we have two different
3:58types of candles
4:00we have a red candle which is also
4:02called a bearish candle and we have a
4:05green candle which is also called a
4:08bullish candle sometimes if you see a
4:11black and white chart it is the green
4:14candle that is white and the Black
4:16Candle is red and the difference between
4:19these candles is that during the red
4:21candle the price goes down and during
4:25the green candle the price goes up and
4:28each candle can represent different time
4:32periods so one Candlestick can be for
4:34example one day uh but one Candlestick
4:39can also represent for example 1 hour uh
4:43I'm sorry for my ugly writing here but I
4:45hope you can see uh and one candle can
4:47for example represent one minute and
4:51these different time periods right here
4:53is what we call time frames and when you
4:56are looking at the chart in for example
4:58trading view you can choose what type of
5:01time frame you want to trade so for
5:03example if you choose a daily time frame
5:07then every Candlestick on the chart will
5:10represent one day but if you choose a
5:13for example one minute time frame then
5:16every Candlestick you see on the chart
5:18will represent 1 minute and so on and so
5:21on but to make this example simple we
5:23can think about every Candlestick right
5:26here as representing one day and now and
5:29this is very important every single
5:31Candlestick has four different points we
5:35have a high we have a open we have a
5:39close and we have a low and for the red
5:43candle remember that during this candle
5:45the price Falls so the candle opens
5:48right here or in other words if this is
5:50a daily candle the open price is the
5:53price level at the start of the day the
5:56high right here is the highest point the
6:00price reached during the day so perhaps
6:02the price opened right here it went up
6:05all the way up here to the high then the
6:07next Point here is the low that is the
6:10lowest point the price reached during
6:12the day so as I said the price might
6:14start right here it went up to the high
6:17but then during the day the price went
6:19down all the way down here to the lowest
6:21point I hope you can see all the way
6:23down to the lowest point and then before
6:26the end of the day the price went up all
6:29the way way here to the close so during
6:32that red candle the price might have
6:34moved something like this right and when
6:37you understand the bearish Candlestick
6:38you will also very easily understand the
6:41bullish Candlestick this is basically
6:43the exact same thing but the opposite so
6:46in this case the price opens or starts
6:49all the way down here during the candle
6:52the price went down here to our lowest
6:54point all the way down here and during
6:57the day the price went up all all the
6:59way up here to a highest point all the
7:02way up here and before the day ended the
7:05price came down here to the closing
7:08price so this right here is basically
7:10how you read the candlesticks uh but we
7:13have a few important uh Concepts we also
7:16need to learn about the first concept is
7:18what we call a wick or a shadow and you
7:21can see that we have these both at the
7:24top or we can have them at the top and
7:26the bottom and the Wicks and the Shadows
7:29are simply these small lines right here
7:32that are either above or below the
7:35candles and these small points show us
7:39the highest and lowest point of the
7:42period or in other words the time frame
7:46uh last but not least we have something
7:48called the body uh this is also
7:50sometimes called the real body uh but in
7:53very simple terms the body is the wide
7:56part here of the candles and remember
7:59the wide parts of the candle determine
8:01the closing and the opening price and
8:04one last thing here I just want to
8:05mention is that these names open high
8:09low and close these points are for short
8:13called oh LC so if you ever stumble upon
8:17something called
8:18ohlc you know that this means open high
8:22low close and this is based on the
8:25candlesticks all right then so now when
8:27we have a basic understanding of how to
8:30read candlesticks now we are ready to
8:32talk about something called bullish and
8:35bearish strength and now I want you all
8:37to focus on this image right here and
8:41the first thing I want you guys to
8:42notice about these candles is that for
8:44all of these candles the highest points
8:47are at the exact same level right and we
8:50can also notice here that for all of
8:52these candles the lowest points so the
8:56low here are also at the exact same Lev
8:59level so the only difference between all
9:02of these candles is the body of the
9:05candles right and the bodies of the
9:07candles are very very important because
9:09they are one of the most important
9:11factors they're actually one of two
9:14factors that determines how bullish or
9:17bearish a Candlestick is so for example
9:20if we take a look at the Candlestick all
9:22the way to the to the left here we can
9:24see that the candle opens all the way
9:26down here and during the candle it
9:28pushed up to the highest point all the
9:31way up here so this basically represents
9:33a very strong movement here towards the
9:35upside but if you take a look at the
9:37candle all the way to the right here you
9:39can see that the opposite is true it
9:40open all the way up here and during the
9:43candle it pushed down all the way down
9:46here but now I want to talk about a very
9:48important thing here and that is that
9:50even if we see a Candlestick that looks
9:53for example like this candle right here
9:56this doesn't mean that the candle during
9:58the day fell in a straight line like
10:01this it could have moved something like
10:04this remember it might have open all the
10:05way up here and then during the candle
10:08it might have moved you know something
10:11like this something like a trend here
10:12towards the downside the only thing we
10:14know for certain about this candle is
10:17that it opened here it closed here and
10:20since we have no Wicks so we have no
10:23Wicks like this and like this we also
10:25know that the highest point during the
10:27day was this point and the lowest point
10:30during the day was this point but now if
10:32you take a look at for example this
10:35Candlestick right here instead we can
10:37still see that the highest point of the
10:39candle and the lowest point of the
10:41candle is at the exact same level but
10:44this candle right here tells us a very
10:47different story about the price because
10:50during this candle it opened right here
10:53and then we fell we fell all the way
10:56down here right but before the candle
10:58closed
10:59the Bulls manag to take control and
11:02actually reverse the price all the way
11:05up to this point so while this candle
11:07right here is very bearish and shows
11:11lots of bearish strength this candle
11:14this candle is actually much more
11:17bullish and this candle is actually
11:19almost something we call a hammer and
11:22that's actually a bullish reversal
11:24candle and we will talk more about the
11:26hammer and we will talk about a hammer
11:29trading strategy later on in this video
11:32but for now all you need to know here is
11:33that this candle is much more bullish
11:36but now let's actually focus on this
11:38candle right here you can see in this
11:40case we have a very very small body of
11:44the candle uh but at the same time we
11:47have very long Wicks you can see we have
11:50a long upper Wick and we have a long
11:52lower Wick so during this candle perhaps
11:55the price moved something like this it
11:56started here during the candle we went
11:59all all the way up here uh during the
12:01candle we also fell all the way down
12:03here right but before the candles to
12:05close we pretty much closed here at the
12:08exact same place where the candles stick
12:11started so these kind of candles when we
12:13have very small bodies and very long
12:16Wicks these candles are actually neutral
12:20so they don't really show any bullish or
12:23any bearish strength what they basically
12:25show us is something called indecision
12:28or in other words that neither the Bulls
12:31or the Bears are in control of the
12:34market and this specific handle is
12:36actually something we call a dogee
12:39candle and I will talk more about dogee
12:42candles and why they are so important
12:45later on in this course all right so now
12:48it's time to actually switch the
12:50attention here and take a look at
12:51something called candlestick Wick
12:54analysis and as you can see here on the
12:57screen we have two different candles but
13:00they are actually very similar if we
13:02look closely we can see that the high
13:05point here for all the candles are at
13:07the exact same level we can also see
13:09that the candle opened at the exact same
13:12price and the candles also closed at the
13:16exact same price so the only difference
13:20between these two candles is that for
13:22the candle to the left here we had a low
13:25Point all the way down here but for the
13:28Candlestick to the right right here we
13:30had a low Point down here and this
13:32difference here between the low points
13:35are actually more important than you
13:38might think so let's actually visualize
13:41these two candles so for the candle to
13:43the right uh we can imagine that the
13:45price opened right here uh but then
13:47during the candle we can see that the
13:49price reached a point all the way all
13:52the way down here and then it quickly
13:55pushed up all the way up to the highest
13:58point and before the candle closed we
14:00closed all the way down here uh but if
14:02you take a look at the candle to the
14:03right here we can see that it has a
14:05similar start but during the candle it
14:07went down to this point it went up to
14:10this point and then it went down so here
14:13for the Candlestick to the right you can
14:15see that the move we saw from the low to
14:19the high was much much longer compared
14:23to the move we saw here to the right you
14:26can see this move was only this far
14:28while the move to the left was much
14:31stronger and that means that this candle
14:33is actually more bullish compared to
14:36this candle because we need more bullish
14:39strength to push the price from all the
14:40way down here up to this point compared
14:43to the strength we need to push the
14:45price from this point to this point and
14:47when you look at the chart especially as
14:49a beginner you might feel like these two
14:51candles are basically the same thing but
14:54it is these sort of small differences
14:57like the Candlestick Wick right here
14:59that can really make a difference and
15:02especially let's say that we for example
15:04have a support area right here then
15:08these type of candles when the price
15:10Wicks below and then quickly pushes
15:13above the support this becomes even more
15:16important because this tells us that we
15:18actually found buying pressure coming in
15:20at the support level which is yet
15:22another bullish sign and now let's
15:25really quickly here take a look at
15:26another example this one is pretty
15:28similar
15:29as you can see we have the lowest point
15:31for both of these candles are at the
15:34exact same level uh we have the open
15:36here at the exact same level and we also
15:39have the close at the same level once
15:43again the difference between these two
15:46candles is that to the right we had a
15:49very long upper Wick right or upper
15:53Shadow and to the right here we have a
15:56very short uh upper shadow so now as an
15:59exercise I want you guys to drop a
16:02comment down below and tell me which of
16:04these candles are the most barish feel
16:07free to pause the video right now if you
16:09want to well the answer here is that the
16:11candle to the left is more bearish
16:14because during this candle the price
16:16open here during the candle we pushed
16:18all the way up to this point but the
16:20bars took full control here and managed
16:23to push the price all the way down to
16:26this point while in the other candle we
16:28we had a much sort of uh weaker movement
16:31this is still a bearish movement but the
16:34price moved something like this right
16:37and you can see that this movement right
16:38here is much more bearish compared to
16:42this movement right here and once again
16:45this becomes even more important if we
16:47for example have a resistance area right
16:49here because in this case the candle to
16:52the left confirms that the resistance is
16:55holding all right so now the time has
16:57come to take a look at one of the most
17:00important Concepts when it comes to
17:03candlesticks and Candlestick patterns
17:05and that is Candlestick momentum
17:08analysis and first of all we need to of
17:11course understand here what is momentum
17:13what does momentum mean when we talk
17:15about Candlestick patterns well in
17:17simple terms we can think about momentum
17:21as the speed or velocity of price
17:25movement or in other words we're talking
17:27about how sort of fast is the price
17:31moving compared to the previous candles
17:34so in this example you can see that the
17:36very first candle is a red one and it is
17:39a pretty strong red candle the next
17:42candle here is you know getting a little
17:44bit weaker and we can see that because
17:47the length of the real body of the
17:50candle is getting a bit smaller if we
17:53take a look at the third candle right
17:55here we can see that the real body is
17:57even smaller here and we also have some
18:00pretty long upper and lower wigs and you
18:04know from earlier in this course that
18:06when we have small real bodies and long
18:09Wicks here this basically signals
18:11uncertainty or in other words that
18:13neither the Bulls or the bars are in
18:15control and if we take a look at this
18:17last candle right here you can see that
18:19the real body is pretty much
18:21non-existent we have a very small real
18:24body the Candlestick opens and closes at
18:27the same level uh so this right here is
18:30a dogee candle so for this downtrend
18:32right here we can see that the momentum
18:34is decreasing and if you want a simple
18:37tip to determine the momentum of a
18:40candle I recommend to focus here on the
18:44real bodies the longer the real body the
18:49stronger the momentum in general you
18:51need to also consider the Wicks here
18:53it's also important but as a rule of
18:55thumb the longer real body we have the
18:58stronger than momentum so by looking at
19:01the real bodies here we can see that the
19:02momentum is decreasing and now I want
19:06you guys to learn a very important
19:08concept and that is something called
19:11momentum candle and what is a momentum
19:15candle well different Traders have some
19:19different definitions when it comes to
19:21momentum candles but I like to Define
19:24momentum candles as a Candlestick that
19:28is at at least two times larger compared
19:33to the previous candles so for example
19:35if we look at these three previous
19:37candles right here we can see that the
19:40real body of the green candle right here
19:44is more than twice the size of the
19:47previous candles so that's why I
19:49consider this right here as a momentum
19:52candle and momentum candles are very
19:55important because they can provide
19:57strong signals when we trade and I will
20:00talk more about momentum candles later
20:02on in this video but for now uh all you
20:05need to know is that momentum can be
20:08determined by the real bodies of the
20:10candle and momentum candles in general
20:13can be defined as a Candlestick that is
20:15at least two twice the size of the
20:17previous candle but preferably we want
20:20to see a candle that is you know maybe
20:22three times as large or even you know
20:25five times sometimes it can be even five
20:27times as large as the previous candles
20:30and then we are talking about a very
20:33strong momentum candle all right so at
20:36this point in the course you already
20:38have a you know pretty good
20:40understanding of how to read
20:42candlesticks you know about you know uh
20:44Wick analysis you know about momentum
20:46and strength so now we are very soon
20:49ready to start taking a look at our
20:51Candlestick patterns and also our
20:54Candlestick pattern trading strategies
20:57uh but real quick before we look look at
20:58that we need to learn about the
21:01classification of Candlestick patterns
21:04so first of all all candisc patterns has
21:08three different classifications the
21:10first classification is called
21:12complexity and a candles pattern can be
21:15either simple or complex and a simple
21:19Candlestick pattern is a Candlestick
21:21pattern that consist of only one candle
21:25so for example uh we have been talking
21:27about earlier about dogee candles that
21:30look something like this this right here
21:32is an example of a simple Candlestick
21:34pattern uh we also have a pattern that
21:37is called the hammer it looks something
21:39like this the hammer is another example
21:42of a simple Candlestick pattern another
21:45Candlestick pattern is the shooting star
21:46it looks something like this this is yet
21:48another example of a simple one but even
21:50for simple Candlestick patterns like
21:52right here if you just see a Candlestick
21:55pattern appearing randomly on the chart
21:57it doesn't actually mean a lot the
22:00context or in other words where on the
22:03chart the patterns appear is very
22:05important and we will talk about that
22:07later on and a complex Candlestick
22:09pattern is basically a Candlestick
22:11pattern that consists of two or more
22:14candlesticks sometimes it can be you
22:16know even five or more candlesticks but
22:19an example of a complex pattern is the
22:22barish engulfing pattern it looks
22:24something like this the first candle
22:26here is green the second candle here is
22:29red this is an example of a bearish
22:32reversal pattern so before this pattern
22:34up here we have an uptrend this pattern
22:36indicates then that the price will
22:38reverse to the downside so all patterns
22:41that are two or more Candlestick uh are
22:44complex patterns so for example here on
22:46the image you can see that all of these
22:47Candlestick patterns are one candle
22:49patterns so these are simple patterns
22:52and you can see that all of the two
22:53Candlestick patterns like all of these
22:55all of these three plus Candlestick
22:57patterns all of these are complex but
23:00now the next uh classification is the
23:04direction and here the direction can be
23:06either bullish bearish or neutral a
23:10bullish pattern indicates that the price
23:12will go up after the pattern a bearish
23:16pattern indicates that the price uh will
23:18go down after the pattern and a neutral
23:20pattern indicates that we don't really
23:22know here if the price will go up or
23:24down after the pattern however depending
23:27on the context of the neutral pattern
23:30these patterns can actually also tell us
23:32something about where the price will go
23:35next so for example remember that the
23:37dogee is a neutral pattern but if we
23:40have before the dogee let's say that we
23:42have a strong downtrend so this right
23:44here are red candles and then a doe
23:47pattern appears like this in this case
23:49even though this right here is a neutral
23:52pattern it can actually indicate a
23:54reversal to the upside especially if we
23:57have some sort of support right right
23:58here we perhaps have some sort of
24:00indicator that also confirms the bullish
24:03bias the third classification we have
24:06right here is the type and here we have
24:10reversal patterns and we have
24:12continuation patterns a reversal pattern
24:15basically means that if we have a
24:17downtrend and then the pattern appears
24:20so let's say that this is a random
24:22pattern then the goal of this pattern is
24:24to reverse the price so reverse the
24:27price in the opposite direction C while
24:29a continuation pattern means that let's
24:31once again say that we have a downtrend
24:34then the pattern appears the goal of a
24:36continuation pattern is to continue the
24:39price to the downside so for example
24:41this pattern right here is a bullish
24:44reversal pattern because it indicates a
24:47reversal to the upside and this right
24:49here is a
24:52bearish continuation pattern right
24:54because it indicates a continuation of
24:57the trend to the downside and we also of
24:59course have bearish reversal patterns
25:02and we also have bullish continuation
25:05patterns so we basically have four
25:07different combinations all right so now
25:09we are finally ready to start taking a
25:11look at Candlestick patterns and let's
25:13actually begin here by taking a look at
25:15the best reversal Candlestick patterns
25:19and first of all what is a reversal
25:22pattern well reversal patterns indicates
25:25a trend shift so either from bullish to
25:30bearish or from bearish to bullish so it
25:34can reverse the price from down to up or
25:37from up to down and reversal patterns
25:40can be either simple or complex and as
25:44you know simple patterns consist of one
25:46Candlestick complex pattern consist of
25:49two or more and here and this is super
25:52important the context for the patterns
25:56is very very important or in other words
25:58where on the chart the patterns appear
26:01is crucial when it comes to reversal
26:04patterns so with this three rules in
26:07mind now we are ready to take a look at
26:09our first pattern so the very first
26:11pattern we're going to take a look at is
26:13called the bullish engulfing pattern and
26:16as you can see here on the bottom and I
26:18will do this for every single pattern I
26:20list the complexity the direction and
26:24the type and in this case it's a complex
26:26pattern because it consists of more than
26:28one candle it's a bullish pattern
26:31because it indicates a move towards the
26:33upside and it's a reversal because it
26:36reverses the price from a downtrend to
26:39an uptrend so now then how do we
26:42identify a bullish engulfing pattern
26:44well step one here is that we need to
26:46see a downtrend and after the downtrend
26:49these two candles appear I hope you can
26:52see here that the candles before the
26:54pattern uh has a slightly different
26:56color and also the candle here here
26:58after the pattern has a slightly
27:00different color and I will do this for
27:02all patterns but the actual patterns are
27:05these two candles right here the first
27:09candle in this pattern is a red one and
27:11preferably we want the real body of the
27:13red one to be relatively small it
27:16doesn't have to be super small but it's
27:18often a good sign when we have a small
27:21real body as for the wigs here it
27:23doesn't matter too much these wigs can
27:25be longer or shorter it will not have a
27:27big big impact on the pattern the next
27:30candle of the pattern here is more
27:32important it's this green candle right
27:35here and in order to find a bullish
27:36engulfing we want the next candle to be
27:39a green one and it needs to open below
27:43the close of the red one so it needs to
27:46open below this point right here and the
27:49green candle needs to close above the
27:53open of the red candle and this is why
27:56it's called an engulfing pattern because
27:58the green candle is larger and engulfes
28:01the previous red candle if you're
28:03trading for example crypto where the
28:06closing and the open prices are at the
28:08same level it's enough to see a pattern
28:10that looks something like this let's say
28:12that this is the first red candle right
28:14here and this right here is the second
28:17candle in crypto and some other markets
28:19the next candle will open at the same
28:22place as where the previous candle
28:24closed so in these scenarios what you
28:26are looking out for to confirm bullish
28:28engulfing is simply to see a Candlestick
28:30that closes above the previous red one
28:33when the green candle closes then the
28:36pattern is confirmed and as I said the
28:39pattern indicates a reversal to the
28:41upside now let's take a look at the
28:43bullish engulfing pattern and how to
28:44trade it in a real Market all right so
28:47right here we have a chart and remember
28:49it doesn't really matter what time frame
28:52this chart is I think in this case it's
28:54a daily chart but you can use
28:56Candlestick patterns on any time frame
28:58and if you want to you can try to find
29:00the bullish engulfing pattern on your
29:02own so feel free to pause the video
29:04right now did you find the pattern well
29:07the bullish engulfing pattern at least
29:10the most obvious pattern is this one
29:12right here you can see that before the
29:14pattern appeared we had a strong
29:16movement to the downside we actually saw
29:18a little bounce but then we saw yet
29:20another push towards the downside the
29:22first candle is a small red one and the
29:25next candle the green candle oh opens
29:28below right and closes above the
29:32previous red candle the most common
29:34entry point is to enter when the candle
29:37closes so at the candle close of this
29:40green candle but where do we set our
29:42stop- loss well the most common level
29:45here is to set the stop loss just below
29:48the lowest point of the pattern so in
29:50this case the lowest point comes from
29:52this Wick right here but if the red
29:54candle has a lower Wick we usually set
29:57the stop loss below that Wick another
30:00important point to consider when you
30:02place your stop-loss is previous Market
30:05structure and what do I mean by this
30:07well in this case you can actually see
30:09that we had a low right here as well and
30:13you can pretty much see that we have a
30:14sort of double bottom looking structure
30:16here and when we have another low at the
30:18around same level what I like to do is
30:21to actually place the stop loss below
30:24the sort of support created by that
30:27level so this case you can see that
30:28these two lows are pretty much at the
30:30same level but if one low is slightly
30:33lower I like to place the stop loss
30:35below so in this case I would set the
30:38stop loss around here uh as you also can
30:41see I usually leave some wiggle room
30:44right here so if the price you know
30:46comes down to the support once again we
30:49have some room for the price to bounce
30:52here before we get stopped out but what
30:55about your target level well here you
30:58can keep it simple and use a risk to
31:01reward ratio a risk to reward ratio
31:04tells us how much do we gain compared to
31:08how much we lose when we take the trade
31:10so for example a risk reward ratio of 1
31:14to2 means that we risk $1 for every $2
31:18in profit or in other words the distance
31:21here from the stop loss to our entry
31:24point should be half the length of the
31:26distance up to to the profit Target so
31:29in this case our profit Target would be
31:32around here now let's switch the
31:34attention here and take a look at the
31:36bearish engulfing pattern once again the
31:38bearish engulfing pattern is a complex
31:40pattern because it consists of two
31:42candlesticks uh the direction here is
31:45bearish because the goal of the pattern
31:47is to push the price down and this is
31:49yet again A reversal pattern so in this
31:51case before the pattern appears we need
31:54to see an uptrend then we see a green
31:57candle appearing here with a relatively
32:00small real body uh but in this case you
32:02can see that they actually chose to put
32:04the Wicks here you can see we have a
32:06wick all the way up here and a wick all
32:09the way down here the important thing
32:11about the first candle is that the real
32:13body is small and even more importantly
32:16what we want to see for the beish
32:17engulfing is that the red candle opens
32:20above the body of the green candle and
32:24closes below the body of the green
32:27candle so in this case even though the
32:29Wicks are above and below the real body
32:33of the red candle this is still a
32:35bearish Eng engulfing pattern and when
32:37the candle closes the pattern is
32:39confirmed and it indicates a reversal to
32:42the downside so now let's take a look at
32:44the barish engulfing trading strategy
32:47once again feel free to try to identify
32:49the pattern on your own in this case the
32:51pattern is pretty clearly visible on the
32:54chart so hopefully you can identify the
32:57pattern patter did you find it Well the
32:59bearish engulfing pattern is this one
33:02right here you can see that before the
33:04pattern appeared we had a strong move to
33:07the upside then we saw a small green
33:10candle and especially the candle had a
33:12small real body we had a pretty long
33:15lower Wick but the real body is small
33:18then the next massive candle came in
33:21here and opened far above the previous
33:24green candle and closed Far Below so
33:28this right here is a very clear bearish
33:30engulfing in this case however we did
33:32not have any resistance level so the
33:35optimal scenario is let's say that the
33:37high were all the way up here and
33:40perhaps we had a resistance uh like this
33:44this would be the optimal scenario the
33:45bearish engulfing pattern is more
33:47significant when it happens at a
33:49resistance level but you can still use
33:51the pattern on its own you can for
33:54example combine the pattern with other
33:56technical variables like indicators and
33:59Market structure but okay so what about
34:02the entry point well once again the most
34:04common entry for the barish Eng
34:06engulfing pattern is to enter at the
34:08candle close of the red candle the stop-
34:11loss we usually place above the highest
34:14point of the pattern and in this case we
34:16can see that the highest point is right
34:18here once again you can see that I leave
34:21uh some space here for some wiggle room
34:23and as I said remember to keep other
34:25Market structure in mind so for example
34:27if we have a resistance all the way up
34:28here you might want to set your stop-
34:30loss above that resistance as for your
34:33Target level to keep it simple we
34:35usually use a risk reward ratio a common
34:38risk a very common risk reward ratio is
34:40to use a 2 to one so we measure this
34:43length right here and our Target length
34:45should be twice as long uh from the
34:49entry so in this case our Target would
34:51be right around here another interesting
34:54thing to notice about this chart is
34:56let's actually take a look at this
34:58pattern right here well here we actually
35:00have a bullish engulfing because the
35:02first candle is a red one the second
35:04candle is a green one that opens below
35:07right opens below the body and closes
35:10above the body of the previous red
35:12candle and we can actually see that this
35:14bullish engulfing pattern marked the low
35:17of this down move and it actually
35:19reversed the price here to the upside
35:22all right so now the time has come to
35:23take a look at one of my personal
35:26favorite patterns and this right here is
35:28the hammer pattern this pattern is a
35:31simple pattern because it consists of
35:33only one Candlestick the direction here
35:36is bullish and the type is reversal so
35:40to identify a hammer pattern what we
35:42first need to see remember it's a
35:44reversal pattern so before the hammer
35:47appears we need to see a move towards
35:49the downside then the actual Hammer
35:51appears and that is this candle right
35:54here to find a valid Hammer pattern what
35:56we're looking out for is that we're
35:58looking out for a small real body like
36:01right here and we're looking out for a
36:03long lower Wick and specifically what we
36:08want to see here is that the wick the
36:10lower Wick of the pattern should be at
36:13least twice the size of the real body
36:17and preferably it should be you know
36:19maybe three times or even four times as
36:22large as the real body you can see in
36:25this case the wick is maybe three times
36:27as large so this right here is a good
36:30Hammer another thing about the hammer is
36:32that we want the upper Wick right here
36:35to be preferably very small or the best
36:39case scenario here is when we have
36:41pretty much no Wick at all so if we have
36:43a pattern that looks you know like this
36:46uh and we have no Wick uh this right
36:49here is a perfect hammer and another
36:51thing that might sound a bit
36:53counterintuitive is that the color of
36:56the pattern can actually be either green
36:59or red so it doesn't have to be a green
37:02real body it can be red and still be a
37:05valid Hammer so hammer can look
37:07something like this with a red real body
37:12however if we you know have to choose
37:14between these patterns the green Hammer
37:16is more bullish and is a stronger signal
37:20so preferably we want to see a green
37:23candle and once again when the candle
37:25closes the pattern is confirmed and and
37:27it indicates a reversal to the upside so
37:30now then let's take a look at the hammer
37:32pattern trading strategy and here on the
37:35chart we actually have three uh valid
37:39Hammer patterns so once again if you
37:41want to pause the video and try to
37:43identify the patterns all right so the
37:46first Hammer we can identify is this
37:49candle right here you can see this green
37:51candle that has a pretty small real body
37:54and a long lower Wick and the important
37:57part about this candle is that you can
37:59clearly see that the wick here is more
38:01than twice the size compared to the real
38:04body and here you can also see that
38:06before the hammer appeared we actually
38:08saw a massive massive drop towards the
38:11downside so when we see a very strong
38:13movement before the hammer appears it
38:16can actually make the hammer even
38:18stronger this right here is a very
38:20strong reversal signal but what about
38:22the other hammers well right here we
38:26actually have another Hammer this one is
38:29a bit more you know debatable if this is
38:32a hammer or not but what you can see
38:35first of all is that we we do have a
38:38small real body and you can also see
38:40that the lower Wick of this pattern is
38:43clearly more than twice the size of the
38:46real body but what makes this pattern a
38:48bit shaky here or you know some people
38:51might not consider this a hammer and
38:54that is because the upper Wick here is
38:57pretty pretty long but in my opinion I
38:59would I would probably still consider
39:01this a hammer because the lower Wick is
39:03so much longer compared to the upper
39:06week so this could still be considered a
39:08hammer and what we also can notice is
39:10that before the hammer appeared we saw a
39:12strong move towards the downside and
39:14that is a good sign another candle that
39:16you might consider a hammer is this
39:19candle right here you can see once again
39:21we have a very small real body and we
39:23have a long lower Wick but in this case
39:26I would actually not consider this a
39:27hammer and that is because we are
39:29actually in a move towards the upside
39:32yes we have a small move here before the
39:35hammer appears uh but this is not really
39:37enough for me to consider this a
39:39reversal pattern preferably before
39:42before the pattern appears we want to
39:43see a clear move here towards the
39:46downside but the last valid Hammer
39:49pattern here in my opinion is this one
39:52right here once again you can see we
39:54have a very small real body we have a
39:56very tiny upper Wick right and we have a
40:00very long lower Wick the body is red but
40:03remember that doesn't matter this is
40:05still a valid Hammer so in this case
40:08what about the entry point the exit
40:10point and our Target level well once
40:13again and this is common for many
40:14patterns the most common way to enter is
40:16to enter at the candle close here of the
40:18pattern and remember this is a red body
40:21so we enter at the lowest point of the
40:24body that is when the candle closes but
40:27what about the stop loss well in this
40:29case you can actually see that we have
40:31some sort of support because we have a
40:32low right here we have another low right
40:35here and we have another low right here
40:39so what we can do here is that we can
40:41drag a sort of support area I prefer to
40:45draw areas rather than uh rather than
40:48sort of lines in this case we can draw a
40:50pretty broad support area right here and
40:52in this case I think it makes sense here
40:54to place the stop loss below the support
40:57area and I also leave some wiggle room
41:01so I leave some wiggle room here between
41:03the support and the entry point just
41:06like this and as for our Target level
41:09once again we can keep it simple with a
41:112 to1 risk to reward we measure this
41:13part our Target level should be around
41:16twice the length of this part right here
41:19and that would give us a Target around
41:22here once again when it comes to Target
41:25levels we can also use support and
41:27resistance levels so in this case we can
41:29see that we have some sort of resistance
41:31resistance resistance so here we have
41:33some sort of resistance area right here
41:36so it it can make sense when you have a
41:38resistance area like this to actually
41:41Place The Target just below oops uh
41:45wrong tool here just below the
41:48resistance so in this case you can
41:49actually you know adjust your support
41:52your so in this case you can actually
41:54adjust your target a bit here to take
41:56targets before the resistance appears
41:59because when we reach a resistance it's
42:00pretty common that the price will
42:02reverse in this case you can actually
42:04see that we did get a pretty strong
42:06reaction of this resistance area it went
42:09a tiny bit higher here but definitely
42:11keep support and resistance levels in
42:13mind all right so now let's take a look
42:15at the shooting star pattern this is one
42:17of my favorite bearish patterns so make
42:20sure to really pay attention to this one
42:23once again this is a simple pattern
42:25because the pattern consists of one can
42:27stick the direction is bearish and the
42:30type is a reversal and because this is a
42:33bearish reversal that means that before
42:36the pattern appears we want to see an
42:38uptrend then this right here is the
42:41actual pattern and after the pattern the
42:44goal is to reverse the price to the
42:46downside to identify a shooting star
42:48pattern we want to look out for a small
42:51real body and a long upper Weck what we
42:55also want to see is that we want the
42:57lower Wick to be either non-existent or
43:00to be very small like we're seeing right
43:03here and here and this is very important
43:05the upper Wick of the shooting star just
43:09as the hammer we want this this one to
43:12be at least twice the size or preferably
43:16even longer compared to the real body
43:19here and in this case we can see that
43:21the upper Wick is just barely twice the
43:24size as the previous candle so if if
43:27this week was a little bit shorter so if
43:29we had a pattern that look something
43:31like this instead where the upper week
43:34is you know maybe like this now we are
43:37not really seeing a shooting star
43:39anymore so when you're looking out for
43:41shooting stars definitely pay close
43:43attention to the upper Wick of the
43:45pattern all right so now then how do we
43:47trade the shooting star well in this
43:50case the shooting star can actually be
43:52pretty hard to spot but the most valid
43:56shooting star right here in my opinion
43:58is actually this green candle right here
44:02and I actually forgot to mention this
44:04but for the shooting star it doesn't
44:06matter if the body is green or red it's
44:09still a valid shooting star however a
44:12red candle is a bit more bearish but the
44:14important part here is that we have a
44:16small real body and a long lower Wick in
44:20this case you can see that the wick is
44:22just barely twice the size of the real
44:25body and what we also can see is that
44:27before the pattern appeared we had a
44:29clear move towards the upside as for
44:31your entry level once again we enter
44:34here at the candle close of the pattern
44:36and because this is a green body we
44:39enter at the top of the real body um
44:42your stoploss level here once again we
44:44want to look out for previous Market
44:46structure you can see that we actually
44:48have a high right here so we can drag a
44:51resistance like this in this case we can
44:54actually see that the shooting star us
44:57quickly peaked above the resistance and
45:00then reversed this is actually a special
45:03type of pattern that we call a wof up
45:05thrust and these can be very strong
45:08reversal signals and by the way guys if
45:10you want to learn more about support and
45:12resistance and how to combine support
45:13and resistance with other technical
45:15tools to create a trading strategy I
45:18highly recommend to watch my support and
45:19resistance trading course here on the
45:21channel I will make sure to link that
45:23video up in the corner in the eye so now
45:26then where we place our stop- loss well
45:28because the highest point of the
45:30shooting star is above the resistance we
45:33actually want to place the stop loss
45:35used slightly above that point once
45:38again I leave a tiny bit of wiggle room
45:40between the highest point of the
45:41shooting star and the stop loss and as
45:44for our Target level we keep it simple
45:46with a 2 to one for this pattern as well
45:48so we measure this move right here and
45:51we take a 2 to one so the target should
45:53be twice the size and we lock in our
45:55profits around here in this case we can
45:58see that the price actually continued
46:00further down but that is no guarantee so
46:03it's very important to plan out your
46:05trade set your you know stop loss and
46:07set your Target and stick to your plan
46:10another interesting thing you can notice
46:11about this chart is that we pretty much
46:14had a shooting star pattern appearing
46:16right here right you can see we had a
46:18small real body we had a long upper week
46:22but what makes this pattern a bit you
46:25know shaky is that yet this we saw a
46:27move towards the upside right here but
46:30before the shooting star appeared we had
46:32more of a sideways movement a more value
46:35pattern in my opinion would have been
46:36this candle right here but in this case
46:39you can see that if you traded this
46:41pattern you would have entered right
46:43here and you would have probably set
46:45your stop loss right here so in this
46:47case this would have been a losing trade
46:50and that is a very important point to
46:52consider not all patterns will be
46:54successful some patterns will fail and
46:57then it's very important to respect your
46:59stop- loss and exit the trade without
47:01any hesitation another important thing
47:03to remember here is that when we use a
47:05risk reward ratio of 1 to2 this means
47:09that we can actually lose more trades
47:11than what we win and still make money so
47:14losing trades doesn't have to be a bad
47:16thing it's simply a part of the game all
47:19right so now it's time for a very iconic
47:21and pretty complex reversal pattern and
47:24this is the Morning Star pattern this
47:26pattern right here is indeed complex and
47:29it's a bullish reversal pattern so
47:32before the pattern appears we want to
47:34see a downtrend then the actual pattern
47:37appears here and as you can see this
47:39pattern consists of three candlesticks
47:41and the goal of this pattern is to
47:43reverse the price to the upside so how
47:46do we identify the Morning Star well the
47:49first Candlestick of the Morning Star is
47:52a pretty strong red candle and it's a
47:55continuation of of the previous move
47:58towards the downside the next candle is
48:00a green Candlestick with a small real
48:04body and the wick here can be either
48:07small or long but here and this is very
48:10important between the candle close of
48:13the red candle and the opening of the
48:17green candle so in this space right here
48:20we actually want to see a Gap a gap is
48:23when we either have distance between the
48:26body of the candle or another gap which
48:29is called a wick Gap is when we actually
48:32have distance between the Wicks of the
48:35candles as well and I will talk more
48:37about that later on in this video we
48:39actually have some patterns where we
48:40need to see uh Wick gaps but in this
48:43case all you need to see is that we want
48:45to see a gap between the bodies of the
48:48candles and the third and the final
48:50candle of the pattern is a strong green
48:53candle and here we once again want to
48:56see a gap between the small green candle
48:59and the large green candle so we want to
49:01see a gap between the real bodies of
49:04these two candles yet another thing we
49:06want to see with the green candle is
49:08that preferably we want the green candle
49:11to close well within the real body of
49:15the red candle and a rule you can use if
49:18this right here is 50% or in other words
49:22it's in the middle of the red candle we
49:25want the green candle to close above
49:28this Mark right here and when the green
49:30candle closes above the 50% Mark the
49:33Morning Star pattern is confirmed all
49:36right so now let's take a look at the
49:38Morning Star Trading strategy and The
49:41Morning Star can be identified right
49:45here and this one can be a little bit
49:48tricky to spot here but let's take a
49:51look at this pattern together so the
49:53first candle is a strong red candle that
49:56clearly comes after a downtrend a very
49:59strong movement here towards the
50:01downside the second candle of this
50:04pattern has first of all it has a very
50:06small uh real body that is a good sign
50:09and you can see here that we actually
50:10have a pretty long lower week so what
50:14pattern is this pretty much well it's
50:16actually pretty much a hammer pattern so
50:18you can actually find a hammer pattern
50:21inside a Morning Star pattern and it's a
50:24bit hard to see here but we actually
50:25created some space SP between the real
50:28body of the first candle and the second
50:31candle between candle 2 and candle 3
50:33here we have a much clearer Gap here you
50:35can see we clearly have a gap between
50:38the red candle and the green one and
50:40what you also can notice here is that
50:42the green candle closes above the candle
50:45close here is above the 50% Mark of the
50:49first red candle so as for our entry
50:51point the most common way to enter is to
50:53enter at the candle close of the
50:56shooting star so to enter right there in
50:59this case when we have a hammer pattern
51:02you could have actually entered all the
51:04way down here on the Hammer as well but
51:07in this example we are showing off the
51:09Morning Star so let's stick with entry
51:12example number one let's take a look at
51:15our stop- loss here we don't really have
51:17any clear support level and when we
51:19don't have any clear support we usually
51:21place the stop here below the lowest
51:23point of the pattern so we place it
51:25below this point right here we also
51:28leave some wiggle room space between the
51:30low and the the and the stop loss so if
51:34the price falls down here we can
51:36actually retest the the hammer pattern
51:39and still you know not get stopped out
51:42as for your Target level we can keep it
51:44simple and use a 2 to one this would
51:46give us a Target around here or we can
51:48actually use previous Market structure
51:50so in this case you can see that we have
51:52a pretty clear resistance all the way up
51:55here you can see we have One Touch two
51:57touches so it's actually possible to set
51:59your target just below that resistance
52:02I'm not really sure here but if I
52:04remember correctly I do think that we
52:06saw a move towards the upside and then
52:07down and then this target eventually got
52:10reached all right so now let's take a
52:12look at the evening star pattern the
52:15evening star is a complex pattern
52:16because it consists of three
52:18candlesticks the direction is bearish
52:21and this is once again A reversal
52:23pattern so before the pattern appears we
52:26have an uptrend then the actual pattern
52:28is this one right here consisting of
52:30three candles and the goal of the
52:32pattern is to reverse the price to the
52:34downside the first candle of this
52:36pattern is a strong green one so we want
52:39to see a long body here and we can also
52:42see some Wicks the important part about
52:44the first candle is that we have a long
52:46green body the next candle is a candle
52:49with a small real body so in this case
52:51you can see that we have a very small
52:53real body here uh we can also have uh
52:56both both lower and upper Wicks this is
52:58not super important the most important
53:00part here is that we have a small real
53:02body we can even have a canos sticks
53:04that looks something like this where the
53:07real body is so small that you can't
53:09even see it anymore this right here is a
53:12doe candle and we will talk more about
53:14dogee candles and why they are so
53:16important later on in this video and
53:19also this candle can be either green or
53:22red but one could consider the pattern a
53:24bit more bearish if we see a red candle
53:27between the body of the first candle and
53:30the second candle and this is very
53:31important we need to see a gap so
53:34between this point and this point we
53:37want to see a gap here between the real
53:40bodies the third candle here is a strong
53:42red candle and once again between the
53:45real body of candle 2 and the real body
53:48of candle 3 we want to see a gap like
53:52this and to confirm that the third
53:54candle is strong and to confirm the
53:56pattern we want the red Candlestick or
53:59candle 3 to close below this point right
54:03here and in this particular example you
54:06can see that the red candle closed far
54:08below the 50% Mark and this confirms the
54:11evening star pattern all right then so
54:14how do we actually trade the evening
54:16star well the first thing we need to do
54:18is of course to identify the pattern so
54:20if you want to try to do this yourself
54:22and pause the video did you manage to
54:24find the pattern well the evening star
54:28is this pattern right here you can see
54:31that the first candle is a strong green
54:33one that comes after a move towards the
54:36upside the second candle right here has
54:39a small real body in this case the real
54:41body was green but remember the body can
54:43be either green or red and this pattern
54:46on its own is actually something we call
54:48a hanging man pattern and we will cover
54:51that pattern later on in this course but
54:53for now all we need to notice is that we
54:55do have a small pattern and also very
54:58importantly we do have a gap here
55:00between the real body of the green one
55:02and the real body of the first candle so
55:05you can see we have a pretty clear Gap
55:07right here the third candle is a strong
55:09bearish candle that's exactly what we
55:12want to see and even though it's tiny we
55:14can see that we do have a gap here
55:16between candle 2 and candle 3 and also
55:19the red candle closes below the 50% Mark
55:24of candle one so you can see that the
55:26candle close is clearly below that point
55:29so we have all our criteria and this
55:31pattern is confirmed as for your entry
55:33point we usually enter here at the
55:36candle close of the third candle and for
55:39the stop loss once again we don't really
55:41have any clear support and resistance
55:43here so our stop loss we want to place
55:46above this point so we place it above we
55:49leave some wiggle room right here and we
55:52use a risk to reward ratio uh we can use
55:54for example a 2 to one could also use a
55:573:1 a 3:1 risk reward simply means that
56:00the reward uh the length down to the
56:03Target so the length down to this point
56:05right here should be three times as long
56:08as this length right here all right so
56:11now the time has come to take a look at
56:13the piercing pattern and the piercing
56:15pattern is yet another Super useful uh
56:18reversal pattern and this pattern is
56:20complex because it consists of two
56:23candlesticks the direction here is bull
56:27and as I said the type here is reversal
56:30so before the pattern appears we need to
56:32see a downtrend then these two candles
56:35right here are the actual pattern and
56:37the goal of the pattern is to reverse
56:39the price to the upside the first
56:41Candlestick of this pattern is a red one
56:44preferably a pretty strong red candle
56:46but it can be either strong or sort of
56:49medium strength and the red candle is a
56:53continuation of the previous move to the
56:55downside the next Candlestick is a
56:58strong green candle it can have a upper
57:01Wick and a lower Wick but the most
57:03important thing about this green candle
57:06is that we need to close above remember
57:09just as with the morning and evening
57:11star we have this 50% line from the red
57:16candle and this line goes from the
57:18middle of the previous red candle and
57:21what we want to see in order to confirm
57:23the piercing pattern is that we want the
57:26green candle to close above this line
57:29when we see the candle close the pattern
57:31is confirmed and indicates the reversal
57:33to the upside what I also forgot to
57:35mention here is that the red previous
57:37candle can also have a upper and a lower
57:40Wick so now let's take a look at the
57:43piercing pattern trading strategy and as
57:45always you can as an exercise try to
57:48find the pattern here on your own but
57:51the piercing pattern can be found right
57:53here you can see that before the pattern
57:56appeared we had a pretty significant
57:58move here towards the downside candle
58:01one here is a strong red candle we have
58:04a slight upper Wick and lower Wick but
58:07that's okay the next candle here is a
58:09strong green candle you can see that we
58:12do have a very long lower week and we do
58:16have a very long upper week but that's
58:19completely fine because remember the
58:21most important part about this pattern
58:23is that the green candle needs to close
58:25up Above This 50% line we have right
58:29here and you can see that the candle
58:31close was quite far above the 50% line
58:34so when this candle closes the pattern
58:37is confirmed another important thing to
58:39notice about the piercing pattern is
58:41that this is pretty much a early stage
58:44of a bullish engulfing because if the
58:45piercing pattern pushes a bit higher
58:48here and closes above the opening of the
58:51red candle then we actually have a
58:54bullish engulfing pattern instead so
58:56this is pretty much an early sort of
58:58bullish engulfing pattern but now let's
59:00take a look at where do we enter where
59:02do we set our stop loss and where do we
59:04place our Target well the most common
59:07entry point is as usual at the candle
59:10close so we enter here when the pattern
59:13confirms as for our stop-loss we usually
59:17look at the very lowest point of the
59:19pattern and in this case remember we
59:21have a very sort of long lower Weck so
59:24what we usually do is that we actually
59:26set the stop loss all the way down here
59:29all the way below the lower week and I
59:32also like as you know by now I like to
59:35leave some wiggle room here this allows
59:38us for the pattern to go down and test
59:41the low once again and then bounce and
59:44we will still not get stopped out and as
59:47always you also want to look out for the
59:49previous Market structure in this case
59:50you can see we have a low right here uh
59:53and we have a lower low uh in this case
59:57uh we don't have an indicator right now
59:59but just by looking at the price I can
1:00:01actually sense a sort of Divergence
1:00:03right here if you want to learn more
1:00:04about divergences to improve your
1:00:07Candlestick pattern trading even more I
1:00:09actually have a full course about the
1:00:11RSI indicator that I highly recommend
1:00:14watching I will make sure to leave a
1:00:16link to that video somewhere up in the
1:00:18corner but now then what about the
1:00:20target well our usual method here is to
1:00:22measure the length between the entry and
1:00:25the stop stop loss and we use a risk
1:00:28reward ratio a risk reward ratio of two
1:00:30would give us a target maybe somewhere
1:00:32around here so this is where our Target
1:00:35is and where we lock in profit all right
1:00:38so now we're going to take a look at the
1:00:40dark cloud cover this right here is an
1:00:42important bearish pattern that every
1:00:44Trader needs to know about this pattern
1:00:46is complex because it consists of two
1:00:49candles the direction is bearish and the
1:00:53type is reversal so before the pattern
1:00:56we want to see an uptrend these two
1:00:58candles right here are the actual
1:01:01pattern and the goal of this pattern is
1:01:03to reverse the price down the first
1:01:05candle of this pattern is this candle
1:01:07right here and this is a pretty strong
1:01:10green candle it can be either very
1:01:12strong or medium size it doesn't matter
1:01:15here if we have an upper Wick and a
1:01:17lower Wick the most important part here
1:01:19is that we have a clear continuation of
1:01:22the uptrend the next candle candle two
1:01:25is a strong bearish candle and in this
1:01:27example you can see that we have no
1:01:29upper week and this is completely fine
1:01:31but we have a pretty long lower week and
1:01:34that's also completely fine the Wicks of
1:01:37this pattern are not the most important
1:01:39part the most important part is that the
1:01:43red candle needs to close below this 50%
1:01:48Mark of the green candle so once again
1:01:51the 50% Mark is drawn from the middle of
1:01:55the body of the green candle and what
1:01:58we're looking out for here is that we
1:01:59are looking out for a candle close below
1:02:02this line when we see a candle close
1:02:04below the 50% line the pattern is
1:02:06confirmed and indicates a reversal so
1:02:10now then let's take a look at the dark
1:02:11cloud cover trading strategy and the
1:02:14first thing we need to do is that we
1:02:15need to identify the pattern and the
1:02:18dark cloud cover can actually be found
1:02:21right here and this right here is pretty
1:02:24much a special case of the dark cloud
1:02:27cover because the second candle here is
1:02:30you know a massive massive candle and as
1:02:33you can see first of all we had a very
1:02:35clear move towards the upside before the
1:02:37pattern appears and the first candle
1:02:39here is a pretty strong green one and
1:02:41importantly it's a continuation of the
1:02:44uptrend in this particular case we have
1:02:46no upper Wick and we have no lower Wick
1:02:49but that's completely fine the second
1:02:51candle in this case was a massive
1:02:54massive bearish candle and the very
1:02:56interesting thing about this candle is
1:02:58that during the candle the price pushed
1:03:01all the way up here but before the
1:03:03candle closed the bars managed to push
1:03:06the price all the way down here and even
1:03:08more importantly the bars managed to
1:03:11push the price and close below the 50%
1:03:15Mark of the previous green candle so
1:03:18this actually confirms that we have a
1:03:20dark cloud cover and even though we have
1:03:22such a large candle and such a large
1:03:24large upper lower week this is still a
1:03:27dark cloud cover but now then how do we
1:03:29trade a dark cloud cover with you know
1:03:32such a big bearish candle well the first
1:03:36step is to find our entry point here and
1:03:38once again the most common entry is to
1:03:40enter here at the candle close of this
1:03:43pattern but as for the stop- loss here
1:03:46it gets a bit more tricky we still have
1:03:49the most common stop- loss that is you
1:03:51know if we take a look at the absolute
1:03:53highest point of the pattern as you guys
1:03:55know from previous patterns the most
1:03:57common way to set your stop- loss is to
1:03:58set your stop- loss just above this
1:04:01point but now since the highest week is
1:04:04so high up some Traders highly prefer to
1:04:08to not have such a wide stop loss so
1:04:11when you see a a large second candle
1:04:14like we're seeing right here another
1:04:17method to set your stop- loss is to
1:04:19actually place it above the candle close
1:04:23of the pattern so some Traders might
1:04:25prefer for this stop loss you can see we
1:04:28set the stop loss just above the uh real
1:04:31body of the pattern and as always we
1:04:35also leave some wiggle room so here you
1:04:37have two uh pretty valid options for
1:04:39your stop- loss you have the higher stop
1:04:41loss and you have the lower stop- loss
1:04:44and what stop loss you decide to choose
1:04:45here basically depends on your own
1:04:48trading style if we choose the lower
1:04:50stop loss then our Target level using a
1:04:532 to one would probably take us down
1:04:55around here so this right here is Target
1:04:58Target one but if you're using the wider
1:05:00stop loss and still aim to get a 2 to1
1:05:04risk reward ratio you also of course
1:05:07have to increase the target so in this
1:05:10case your target level might be all the
1:05:13way down here all right so the next
1:05:15pattern we're going to take a look at is
1:05:16the inverted Hammer pattern and this
1:05:19pattern is you know very important to
1:05:21understand because it can be quite uh
1:05:24counterintuitive
1:05:26because this right here is a simple
1:05:28bullish pattern and it is a reversal
1:05:30pattern but many uh especially new
1:05:34Traders look at this pattern and say
1:05:37isn't this a bearish pattern well it's
1:05:40actually considered a bullish pattern
1:05:42and we will talk about why this is
1:05:44considered a bullish pattern very soon
1:05:46but first how do we identify the pattern
1:05:49well since this is a bullish reversal
1:05:51before the pattern we need to see a
1:05:53downtrend and in this case the context
1:05:55this very important so it is important
1:05:57that we have a down move before the
1:05:59pattern then the actual pattern appears
1:06:02and the goal of the pattern is to
1:06:03quickly push the price towards the
1:06:05upside the pattern itself consists of
1:06:08one single candle with a very small real
1:06:12body and a long upper Wick and here just
1:06:17as with the hammer pattern we want the
1:06:19wick to be at least twice the size
1:06:23compared to the real body and in this
1:06:26case you can see that the wick is maybe
1:06:28you know four times as large as the real
1:06:30body so that is a very good sign but now
1:06:33you may of course wonder why is this
1:06:35even a bullish pattern because if you
1:06:38remember from earlier in the video when
1:06:40we talk about talked about the shooting
1:06:42star you can actually see that this
1:06:44right here is the same candle as the
1:06:47shooting star because as you can see the
1:06:49candle open all the way down here during
1:06:52the candle the Bulls started off good
1:06:56they managed to push the price all the
1:06:57way up here but before the candle closed
1:07:01the bars took control once again and
1:07:04pushed the price all the way down to
1:07:06this point right here but the reason
1:07:08this is still considered a bullish
1:07:10pattern is because of the context
1:07:12because before the pattern appeared we
1:07:14had a clear move towards the downside
1:07:17and because the Bulls during the next
1:07:18candle managed to push the price all the
1:07:21way up here this gives us an indication
1:07:24that the back s from the downtrend might
1:07:27be losing control so if you see this
1:07:30pattern appear after a downtrend it's a
1:07:33bullish pattern but if you see the
1:07:35pattern appear after an uptrend it's a
1:07:38bearish pattern so the context is very
1:07:41important but when this candle closes
1:07:43the candle is confirmed and indicates a
1:07:46reversal to the upside when trading the
1:07:48inverted Hammer many Traders will
1:07:50actually wait for a confirmation candle
1:07:53and what is a confirmation candle well
1:07:55in this case this right here is a
1:07:57confirmation candle it's a candle that
1:08:00appears after the pattern that confirms
1:08:04the direction we want to see and in this
1:08:07case we want to see a move towards the
1:08:09upside and we can see here that the next
1:08:11candle confirmed this move so some
1:08:14Traders will wait for this next candle
1:08:17close before they enter their trade and
1:08:20in my opinion waiting for a confirmation
1:08:22candle when it comes to the inverted
1:08:24Hammer is not about idea because this
1:08:26pattern is you know slightly less
1:08:29bullish compared to for example the
1:08:31hammer pattern and as you can hear on
1:08:33the name the inverted Hammer pattern is
1:08:36basically a hammer upside down so now
1:08:39let's take a look at the inverted Hammer
1:08:41trading strategy and if you want to
1:08:44pause the video and try to find the
1:08:46pattern on your own did you guys succeed
1:08:49well the inverted Hammer here can be
1:08:51pretty hard to spot but it can be found
1:08:54right here you can see that before the
1:08:56inverted Hammer appeared we had a pretty
1:08:59significant move towards the downside
1:09:02especially the last candle here before
1:09:04the inverted Hammer was a very strong
1:09:06bearish one then as you can see right
1:09:09here we saw an inverted Hammer up here
1:09:12why is this an inverted Hammer well we
1:09:14have a small real body and a long upper
1:09:18Wick and this Wick needs to be at least
1:09:21twice the size of the real body and in
1:09:24this case we can see that it is slightly
1:09:26more than twice the size of the body but
1:09:29how do we actually trade this pattern
1:09:31well in this case we have two different
1:09:34ways to enter the first potential entry
1:09:36point is to enter here at the Cano close
1:09:39of the inverted Hammer but as we talked
1:09:40about a second way to enter is to wait
1:09:43for a confirmation candle in this case
1:09:46this next Green candle here is a
1:09:48confirmation candle it confirms the
1:09:50pattern because it pushes in a bullish
1:09:53Direction and that is exactly what this
1:09:55pattern indicates and what about our
1:09:58stop-loss level well the most sensible
1:10:00uh stop- loss Point here at least in my
1:10:03opinion is to look out for the lowest
1:10:05point of the candle that happened before
1:10:08the inverted Hammer when you see candles
1:10:11like this that Wicks below the actual
1:10:13pattern uh you know before the pattern
1:10:15appears a good way to set your stop-
1:10:17loss is to place it below this point and
1:10:20also of course I leave some wiggle room
1:10:23here so if the buyers take control here
1:10:25we we actually have a chance of a bounce
1:10:27at the low and still not get stopped out
1:10:30as for your Target level here if you use
1:10:32the first entry you can see that we have
1:10:34a very tight stop loss uh this is
1:10:37something that you know some Traders
1:10:39prefer and some Traders like to avoid
1:10:41and when we use such a tight stop- loss
1:10:43you can see that if we use our risk
1:10:45reward ratio of two you can see that our
1:10:48Target uh gets reached very very quickly
1:10:51so if you are a Trader that likes to get
1:10:53in and out of the market quickly tight
1:10:55stop losses can be a good idea if we
1:10:58instead use the confirmation candle
1:11:01entry here we will have a much wider
1:11:03Target if we once again use a risk
1:11:05reward reward of 2 to one you can see
1:11:08that our Target would some be probably
1:11:10be somewhere up here and this is a
1:11:13pretty interesting point because this uh
1:11:15as you can see between this candle and
1:11:17this candle we actually had a very large
1:11:21gap and we will talk more about price
1:11:23gaps later on in this video
1:11:25but a common principle here is that
1:11:28price gaps tends to be filled so the
1:11:31highest point of the Gap here can
1:11:34actually many times act as resistance so
1:11:37it does make sense here to set your
1:11:40target level here uh just before the Gap
1:11:43close or in other words before the
1:11:46resistance because when the price
1:11:48reaches or if the price reaches all the
1:11:50way up there it's very possible that we
1:11:53can actually see a reaction all right so
1:11:55now let's take a look at the hanging man
1:11:58pattern uh the hanging man is a pretty
1:12:01pretty wild name here uh but the pattern
1:12:04is a simple pattern it consists of only
1:12:06one Candlestick the direction here is
1:12:09bearish and the type is a reversal so
1:12:13before the pattern appears we have an
1:12:15uptrend then this right here is the
1:12:17actual pattern and the goal here is to
1:12:19reverse the price to the downside and
1:12:21the hanging man pattern is another
1:12:24pretty counter intuitive pattern because
1:12:26as you can see this pattern actually
1:12:28looks like a hammer right it's pretty
1:12:31much the exact same candle as a hammer
1:12:34the key difference between the hanging
1:12:36man and a hammer pattern is the context
1:12:39so where on the chart does the pattern
1:12:42appear and in this case it's very
1:12:44important that in order to have a
1:12:46hanging man it needs to appear after an
1:12:49uptrend the pattern itself consists of a
1:12:51small real body and a long lower Wick
1:12:55and what we want to see here is that we
1:12:57want the wick here to be at least twice
1:13:00the length of the real body so at least
1:13:04twice the length here uh in this
1:13:06particular case it looks to be more like
1:13:08three times uh and that is a good sign
1:13:11but why is this a bearish pattern well
1:13:13remember here that before the pattern we
1:13:15have an uptrend and then the pattern
1:13:18appears here and during this pattern we
1:13:20can see that the bulls actually took
1:13:22lots of control and managed to push the
1:13:25the price all the way down here we can
1:13:27actually see that in this particular
1:13:28case the bulls actually quickly managed
1:13:31to break the lowest point of the
1:13:34previous candle but before the candle
1:13:36closes uh the price pushed all the way
1:13:38up here so even though the Bulls took
1:13:40control here this is still a bearish
1:13:43pattern because the bearish move all the
1:13:44way down here shows a clear uh
1:13:47disruption in the uptrend and just as
1:13:50with the inverted Hammer some Traders
1:13:53when they see a hanging man wants to see
1:13:56a confirmation candle so they find this
1:13:59pattern uh this pattern confirms with
1:14:02the candle close but then they wait for
1:14:05one more bearish candle before they
1:14:08actually enter the trade and also the
1:14:10color of the real body can actually be
1:14:13either red or green but for the hanging
1:14:16man pattern I personally uh highly
1:14:19prefer when we see a red body because if
1:14:22we see a green body it's very possible
1:14:25that this move is just a continuation of
1:14:28the uptrend all right so here we have a
1:14:30real life example of the hanging man
1:14:32pattern and this chart right here can be
1:14:36you know pretty hard to read so it's
1:14:39pretty impressive if you can find the
1:14:41hanging man pattern on your own here so
1:14:44where's the hanging man well we can
1:14:47identify the hanging man right here and
1:14:50one reason why this hanging Man is Hard
1:14:52to spot here is because the move you can
1:14:54see before the pattern appeared we did
1:14:56have a strong move here towards the
1:14:58upside but you can see that we actually
1:15:00have a slightly bearish candle just
1:15:03before the pattern appears and this
1:15:05right here is something we actually
1:15:07don't prefer we prefer to see a green
1:15:09candle before the hanging man but the
1:15:12most important part here is that the
1:15:14overall move before the hanging man is a
1:15:17move towards the upside and here we can
1:15:19still see that the overall move before
1:15:22the pattern is an upwards movement and
1:15:24if we take a look at the actual pattern
1:15:25we can see that we have a small real
1:15:27body the body is red so that is a good
1:15:30sign and we also have a long lower Wick
1:15:33that looks to be around uh three times
1:15:36the size of the real body when it comes
1:15:38to the entry point for this pattern it
1:15:39can also be a little bit tricky as
1:15:42always the most straightforward entry
1:15:44point is to enter right here at the
1:15:46candle close of the hanging man but
1:15:49remember that the other strategy was to
1:15:51wait for a confirmation candle and you
1:15:53can see that this next candle right here
1:15:56was a red candle but this is actually
1:15:59not a confirmation candle because in
1:16:01order to be a confirmation candle we
1:16:03want to confirm a a move towards the
1:16:06downside after the pattern and in order
1:16:08to confirm a move towards the downside
1:16:10we want to see you know a candle that at
1:16:12least closes lower than the uh hanging
1:16:17man so this candle is not good enough to
1:16:19be a confirmation candle however if we
1:16:22take a look at the next candle here we
1:16:24can see that the price gapped down you
1:16:27can see we created a gap here between
1:16:29these two candles and we clearly pushed
1:16:31lower so in this case the second entry
1:16:34would actually be all the way down here
1:16:36at least in my opinion but what about
1:16:38our stop-loss level well here we also
1:16:41have some important Market structure you
1:16:44can see we have one high right here and
1:16:47we have another high right here so here
1:16:49we can actually mark up a resistance
1:16:52area on the chart and when a bearish p
1:16:55appears at or very close a resistance
1:16:58level what I like to do is to place the
1:17:01stop loss just above the resistance
1:17:04because then we can allow uh for the
1:17:06price to go up here and get reacted and
1:17:09still be within a winning trade but what
1:17:12about our Target level well as usual we
1:17:15want to measure the distance between the
1:17:18stop loss and the entry point and if we
1:17:20use a risk reward ratio of two our
1:17:22Target would be somewhere around here
1:17:24and if we use a risk reward ratio of
1:17:26three then our Target would be somewhere
1:17:28down here um your choice of risk reward
1:17:33will depend a bit on your trading style
1:17:35a lower risk reward like a one to two
1:17:38will make it more likely that you trade
1:17:41suceed but if you use a risk reward of
1:17:43for example 1 to three like we do right
1:17:46here it will be less likely that your
1:17:48trade succeed but when you actually get
1:17:51a successful trade you will win much
1:17:53more all right so so now it's time to
1:17:55switch the attention and take a look at
1:17:57the best continuation Candlestick
1:18:00patterns and first of all what are
1:18:02continuation patterns well continuation
1:18:05patterns indicate that the trend will
1:18:08continue or in other words they indicate
1:18:11that we will go from a bullish to a
1:18:13bullish Trend or from bearish to a
1:18:16bearish trend and continuation patterns
1:18:18can be super effective because you are
1:18:20trading in the same direction as the
1:18:23trend and as you guys know the trend is
1:18:25your friend when it comes to
1:18:27continuation patterns the patterns are
1:18:29often complex or in other words the
1:18:32patterns will very seldom consist of
1:18:34only one Candlestick they will pretty
1:18:36much always be uh you know a bit larger
1:18:39patterns and when it comes to
1:18:41continuation pattern the location on the
1:18:43chart or in other words the context of
1:18:46the patterns are super super important
1:18:48so when we talk about continuation
1:18:49patterns make sure to you know pay extra
1:18:52attention to the context and location of
1:18:56the patterns okay so let's take a look
1:18:58at the rising three methods pattern and
1:19:01as you guys can see this right here is a
1:19:03pretty large pattern so it's definitely
1:19:06a complex pattern because this one
1:19:08consists of five candlesticks the
1:19:11direction of this pattern is bullish and
1:19:14the type here is continuation so it's
1:19:17very important that before this pattern
1:19:19appears we need to see an uptrend then
1:19:22all of these candles together are the
1:19:25actual pattern and the goal of this
1:19:26pattern is to continue the trend towards
1:19:29the upside and the first candle of the
1:19:32Rising 3 methods is a strong bullish
1:19:35candle and this pattern indicates that
1:19:37the Bulls are still in control of the
1:19:39uptrend but after this candle what we
1:19:41are looking out for here is that we are
1:19:43looking out for three small bearish
1:19:47candles so we're looking out for a small
1:19:49move that goes in the opposite direction
1:19:53of the trend or in in other words we're
1:19:55actually looking out for a small
1:19:57pullback and these three candles should
1:19:59preferably be within this range so if we
1:20:03take from the highest point to the
1:20:06lowest point of the previous bullish
1:20:08candle we want the red candles here to
1:20:11be within this range as for the Wicks
1:20:14here of the small red candles it's okay
1:20:17here to have Wicks on all of these
1:20:19candles the important Point here is that
1:20:21we want to have small real bodies of
1:20:24these candles the last candle of the
1:20:27Rising 3 methods is very important here
1:20:30we want to see a strong bullish candle
1:20:33and what we want to see here is that we
1:20:35want this bullish candle to close above
1:20:39the close of the first candle so you can
1:20:43see right here we have the close of the
1:20:45first candle and we want the final
1:20:47candle to close above this line when we
1:20:51get this candle close the rising three
1:20:52methods is confirmed and in indicates a
1:20:55continuation up okay so now how do we
1:20:58actually trade the rising three methods
1:21:01well the first thing we need to do is
1:21:02that we need to identify the pattern and
1:21:05the rising three methods can actually be
1:21:08found right here first of all you can
1:21:11see that before the pattern appears we
1:21:13have a very strong movement towards the
1:21:16upside once again you can see that we
1:21:18actually have a gap here we have a
1:21:20massive massive Gap and we will talk
1:21:23more about gaps later on in this video
1:21:25it's important to learn about gaps but
1:21:27for now let's focus here on the Rising 3
1:21:30methods and we can also see here that
1:21:31the first candle is a strong green
1:21:34candle in this case we have you know a
1:21:36pretty long Wick but that's completely
1:21:39fine the next three candles you can see
1:21:41here that we have three small red
1:21:44candles with very small real bodies and
1:21:47that is exactly what we want to see but
1:21:50here and this is actually on the edge we
1:21:52can see that the third red candle is
1:21:56almost pushing a bit too low here if we
1:21:58take a look here we can see that the
1:21:59real body the the red real body is
1:22:02contained within the first green and
1:22:05that is exactly what we want to see I
1:22:07think I forgot to mention this in the
1:22:09previous slide but you can see that the
1:22:11important part here is that the real
1:22:13bodies of the red candles uh should be
1:22:16contained within this range it's not the
1:22:19end of the world if we have a lower Wick
1:22:21right here but preferably we want at
1:22:23least the real bodies of the candles to
1:22:25be contained within that last but not
1:22:28least we have the final candle and
1:22:30remember in order to have a valid Rising
1:22:33three methods we want that final candle
1:22:36to close above this line right here and
1:22:39here you can see that this candle just
1:22:41slightly slightly managed to close above
1:22:44that point and that confirms the rising
1:22:47three methods as for your entry point
1:22:49the most common way to enter is to enter
1:22:50here at the candle close of the last
1:22:53candles some Traders wait for a
1:22:55confirmation here but because this last
1:22:58candle is a strong bullish one I
1:23:00definitely don't think you need to wait
1:23:02for confirmation for the Rising 3
1:23:04methods entering at the candle close of
1:23:06the fifth candle is often a good idea as
1:23:09for your stop- loss the most common way
1:23:11to place it is to place it below the
1:23:13lowest point of the whole pattern and in
1:23:16this case you can see that the lowest
1:23:17point of the whole pattern is right here
1:23:20but sometimes the lowest point of the
1:23:22pattern will actually be created from
1:23:24the first candle as well so here you
1:23:27need to be a little bit flexible uh but
1:23:30in this case because we had the third
1:23:32red candle wicking below uh we actually
1:23:36have the stoploss placement right there
1:23:38I always leave some space here for some
1:23:40wiggle room so I set my stop loss around
1:23:43there to get your target level here we
1:23:44actually have because we have a
1:23:46continuation pattern we have many
1:23:47different methods uh the first method is
1:23:49to use a use a fixed wrist reward so we
1:23:53measure this movement uh if we use a 2
1:23:55to one our Target will be right around
1:23:58here but when it comes to continuation
1:24:00patterns we can also use something
1:24:02called a measured move so what we
1:24:04basically do is that we measure the
1:24:06whole impulse that created the whole
1:24:09sort of move towards the upside before
1:24:11the pattern and then we take this exact
1:24:13measurement and measure uh the same
1:24:16length so the length of this arrow and
1:24:18this Arrow should be the same length and
1:24:20then we take our Target all the way up
1:24:22here this method is something called the
1:24:25100% measured move and I talk more about
1:24:28that in our Market structure trading
1:24:30course here on the Channel all right so
1:24:32now it's time to take a look at the
1:24:33following three methods pattern and this
1:24:36right here is a pretty large pattern
1:24:39consisting of five candlesticks or in
1:24:42other words it's a complex pattern the
1:24:44direction is bearish and the type is
1:24:47continuation so before this pattern
1:24:50appears we need to see a downtrend then
1:24:53we see the actual pattern and the goal
1:24:55of the pattern is to continue to push
1:24:57the price down the first Candlestick of
1:25:00the pattern is a large red candle or at
1:25:03least a medium length red candle and
1:25:06this candle is simply the continuation
1:25:09of the previous downtrend it's okay to
1:25:11have a upper Weck and it's okay to have
1:25:13a lower Weck and it's not too important
1:25:15if these Wicks are long or short after
1:25:18the first candle what we're looking out
1:25:20for here is we're looking out for three
1:25:23small candles that goes in the opposite
1:25:27direction or in other words we're
1:25:29talking about a pullback these candles
1:25:31can also have wicks for example this
1:25:33candle right here you can see have
1:25:35pretty large Wicks and to be specific
1:25:38this right here is actually a spinning
1:25:40top candle and we will talk more about
1:25:42spinning tops and why they are important
1:25:45later on in this video but the important
1:25:47part about these three candles is that
1:25:50the real bodies of these candles should
1:25:53be contained between between the low of
1:25:56the first candle and the high of the
1:25:59first candle it's fine if we do see a
1:26:01wick below or even a week above but
1:26:05preferably we want all of the bodies of
1:26:07the candles to be within this range the
1:26:10final candle of the pattern is yet
1:26:12another strong bearish one once again we
1:26:15can have Wicks on this candle but the
1:26:17most important part here is that the
1:26:19fifth candle closes below the candle
1:26:23close of the first candle so the candle
1:26:26close of the first candle is right here
1:26:29so we want the last candle to at least
1:26:32close below this point and you can see
1:26:34in this particular example we got a
1:26:36candle close far below uh the close of
1:26:39the first candle so that is a very good
1:26:41sign this final red candle indicates
1:26:44that this sort of pullback is over and
1:26:47that we are likely to see a continuation
1:26:50to the downside all right so now let's
1:26:52take a look at the falling three methods
1:26:54in in a real market and as always the
1:26:56very first thing we need to do is to
1:26:58identify the pattern you can try to
1:27:00identify the pattern on your own and
1:27:01pause the video now did you find the
1:27:04pattern well the following three methods
1:27:08can be found right here you can see
1:27:10these five candles as we can see here
1:27:13the first candle is a strong bearish
1:27:16candle and this is a continuation of the
1:27:19downtrend next we have 1 2 and three
1:27:24small green candles that creates a
1:27:27pullback or consolidation within the
1:27:30downtrend and remember here we want the
1:27:32real bodies of these three green candles
1:27:35to be contained within this range and
1:27:38here we can see that all of these green
1:27:40candles are indeed in this range right
1:27:43here the final candle should be a strong
1:27:45red candle and we can see that we found
1:27:47a strong red candle right here and
1:27:49remember this candle needs to close
1:27:52below the close of the first candles so
1:27:56we need to close below this point and
1:27:58here we can once again clearly see that
1:28:00we got a candle close below so now then
1:28:03where do we enter and where do we place
1:28:05our stop loss and where do we take our
1:28:08profits well the entry point is pretty
1:28:10straightforward the most common entry
1:28:12point is to enter at the close of the
1:28:14fifth candle so you enter right here and
1:28:17as we have been talking about some
1:28:18Traders wait for a confirmation candle
1:28:20but for the folling three methods I
1:28:22think uh personally that the best entry
1:28:24point is used to enter at the fifth
1:28:26candle as for your stop loss you want to
1:28:29place your stop loss above the highest
1:28:31point so here this right here is the
1:28:34highest point of all the candles within
1:28:37the pattern so we place our stop- loss
1:28:39just above this point and we also leave
1:28:42some wiggle room right here as for your
1:28:44Target level you can either keep it
1:28:45simple with a risk reward ratio so you
1:28:48measure this length right here you take
1:28:50this measurement you double it and your
1:28:52target will be somewhere around here
1:28:54yet another way to take targets is to
1:28:56measure the whole impulsive move down
1:28:59and then you take this exact measurement
1:29:01and you measure from the high of the
1:29:03pattern uh and you take the Target down
1:29:05here so in this case the second target
1:29:08would be a little bit earlier right
1:29:10around here the important thing about
1:29:12the second target method is that the
1:29:14length of this move and the length of
1:29:17this move should be equal size all right
1:29:20so the next pattern we're going to take
1:29:22a look at is the bullish momentum um
1:29:24pattern and this right here is one of my
1:29:26favorite patterns because it's pretty
1:29:28easy to identify and they can also
1:29:31provide very strong signals so let's
1:29:34first take a look at this pattern so
1:29:36this pattern we can actually consider a
1:29:38simple pattern Because the actual
1:29:40pattern is only one Candlestick however
1:29:44the it's very important that we compare
1:29:46this Candlestick with the previous
1:29:48candles and I will talk more about that
1:29:50later on and as we can hear on the name
1:29:53this right here is a bullish pattern and
1:29:56this right here is a continuation
1:29:59pattern I would say but you can actually
1:30:03also use this pattern as a reversal
1:30:05pattern uh but most commonly I would say
1:30:08it's a continuation pattern so let's
1:30:10classify this as a continuation so
1:30:13before this pattern we preferably want
1:30:15to see an uptrend but after this uptrend
1:30:19the price should enter a sort of
1:30:22sideways or consolidation face this
1:30:25movement can be slightly upwards or it
1:30:28can actually also be sideways or even
1:30:30slightly downwards then the actual
1:30:33pattern appears and the goal of this
1:30:35pattern is to continue the price upwards
1:30:37and how do we identify this pattern well
1:30:41what we're looking out for here is that
1:30:42we're looking out for a strong green
1:30:45candle so we want the real body of the
1:30:48candle to be very long um the upper week
1:30:52we can have a upper Weck and we can have
1:30:54a longer week but for the momentum
1:30:56pattern I actually prefer if we have a
1:30:59shorter weeks but we can have longer
1:31:01weeks as well but the most important
1:31:03part about this pattern is that we want
1:31:06this Candlestick right here to be at
1:31:08least two times as large as the real
1:31:13bodies of the previous candles and here
1:31:16the question is of course you know how
1:31:18many candles should we measure Traders
1:31:20have slightly different methods but I
1:31:22recommend that you measure measure at
1:31:24least three candles before the pattern
1:31:27appears so we want the candle to be
1:31:29twice the size uh the real body should
1:31:32be twice the size as at least the three
1:31:36previous candles I hope this doesn't
1:31:38sound confusing but what we basically do
1:31:40for this pattern is that we compare the
1:31:42size of the Candlestick bodies so now
1:31:45let's take a look at a bullish momentum
1:31:48trading strategy and as always the first
1:31:50thing we need to do is to identify the
1:31:52pattern so remember remember to find a
1:31:55bullish momentum candle we need to
1:31:57compare candles with previous candles
1:32:00and actually if you look at this candle
1:32:03right here you can see that this right
1:32:05here is a pretty strong bullish candle
1:32:08it's for example it's not as strong as
1:32:10this candle and not as strong as this
1:32:12candle but what is important about this
1:32:14candle is that the real body is twice
1:32:17the size compared to all of the previous
1:32:20candles so we can actually consider this
1:32:23right here a bullish momentum candle and
1:32:26another thing that is very important in
1:32:28this case is that we actually have you
1:32:31can see we have a resist pretty clear
1:32:33resistance level right here you can see
1:32:35the price got reacted you know one time
1:32:37two time three time and here the price
1:32:40was just hovering very close to the
1:32:43resistance and another thing we can
1:32:44notice is that the price is actually
1:32:46printing as you can see higher lows into
1:32:50the resistance as well so in this
1:32:52particular case it looks like like we
1:32:54actually have some sort of ascending
1:32:56triangle pattern and by the way guys if
1:32:58you want to learn more about chart
1:33:00patterns I actually have a full chart
1:33:02pattern trading course here on my
1:33:04YouTube channel so I will make sure to
1:33:06link that video somewhere up in the
1:33:08corner in the eye and I highly recommend
1:33:10that you guys check that video out after
1:33:12you are done with this video but now
1:33:15then so how do we trade this pattern
1:33:17well the most common method is to Simply
1:33:20enter at the candle close of the
1:33:23momentum candle some Traders wait for
1:33:25confirmation but in this case I think
1:33:27the confirmation you know after the
1:33:29confirmation we are already very high up
1:33:32and most of the times I actually prefer
1:33:34to enter right after the momentum candle
1:33:37when it comes to your stop-loss level
1:33:39for your momentum candle here it's very
1:33:42important to consider the market
1:33:43structure so remember here we actually
1:33:46have a sort of triangle pattern with
1:33:48consecutive higher lows and in this case
1:33:52I would actually place my stop loss
1:33:55below the most recent low this is the
1:33:58common method for the ascending triangle
1:34:01and I would I would actually handle this
1:34:03as an ascending triangle so the stop
1:34:06loss level I would actually place just
1:34:08slightly below this point so as always
1:34:12we leave some wiggle room and as for our
1:34:14Target we can either measure uh the
1:34:17length up to the entry we take this
1:34:19measurement with a 2 to1 risk reward our
1:34:22Target would be right around around here
1:34:24another method is to actually measure
1:34:26the the um triangle here so you can take
1:34:29this measurement measure from the
1:34:31breakout and you will also get to Target
1:34:33something like this so what I did right
1:34:36here if it wasn't clear is that I took
1:34:39this exact length uh I sort of took that
1:34:42exact length and I measured from the
1:34:45breakout point I took that measurement
1:34:47and our Target level would have been
1:34:49around here but now a question you all
1:34:52might have at this point is you know
1:34:55can't we find any other momentum candles
1:34:58right here for example isn't this right
1:35:01here a momentum candle because we can
1:35:03see that this candle is a very strong
1:35:06green candle well if we look closely
1:35:09here at the previous candles we can
1:35:11actually see that the real body of this
1:35:15candle right here is probably you know
1:35:17at least half the size compared to this
1:35:21candle so this isn't really a momentum
1:35:24candle once again if we look at this
1:35:26candle right here we can see that we
1:35:28have a strong bullish candle the candle
1:35:31is clearly uh twice the size of this
1:35:34candle and this candle but if you look
1:35:36at the third candle this candle right
1:35:38here we you see that the size of that
1:35:41candle is actually smaller the only real
1:35:44uh momentum candle we can actually find
1:35:46here is this barish candle right here uh
1:35:49or we actually only have two candles
1:35:51visible here but I'm pretty sure the
1:35:53third candle was also uh less than half
1:35:57the size of this candle right here so
1:35:59this was probably a bearish momentum
1:36:02candle and we will talk more about
1:36:03bearish momentum candles next all right
1:36:06guys so now it's time to take a look at
1:36:08the bearish momentum pattern this right
1:36:11here is a very useful pattern because it
1:36:13appears so frequently in the market the
1:36:16pattern is a simple pattern because it
1:36:19consists of only one Candlestick so Weir
1:36:22the pattern appears on the chart is key
1:36:25the direction for this pattern is
1:36:27bearish and the type is continuation uh
1:36:31once again this pattern can also act in
1:36:34some cases as a reversal pattern but
1:36:36most common this is a continuation
1:36:38pattern so before the pattern appears
1:36:40preferably we want to see a move towards
1:36:42the downside then we want to see at
1:36:45least three candles with relatively
1:36:47small bodies and this candle right here
1:36:50is the actual pattern and when this
1:36:52pattern confirms it indicates a
1:36:54continuation of the downtrend so now
1:36:57then how do we identify the bearish
1:36:58momentum pattern well what we're looking
1:37:01out for here is that we're looking out
1:37:02for a strong bearish candle and
1:37:05specifically we want the body of this
1:37:07candle to be at least twice the size of
1:37:12the previous candles I'm using three
1:37:15candles here as a rule of thumb but it's
1:37:17even better if the body of the bearish
1:37:19candle is more than twice the size than
1:37:22maybe the prev previous four candles or
1:37:25even the previous you know five candles
1:37:28the more candles the better and the more
1:37:29candles the stronger the bearish
1:37:32momentum is we also preferably want to
1:37:35see the real body of the red candle be
1:37:37perhaps you know three times as large or
1:37:40even four times as large as the previous
1:37:42candles so now let's take a look at the
1:37:45bearish momentum trading strategy and as
1:37:48always the very first thing we need to
1:37:49do is that we need to identify the
1:37:51pattern and in this case the bearish
1:37:54momentum pattern can be found right here
1:37:57as you guys can see on this red candle
1:37:59we have a very long real body and the
1:38:02body is definitely more than twice the
1:38:05size compared to all of these previous
1:38:08candles and remember that I said that
1:38:10this is most often a continuation
1:38:12pattern so before the pattern preferably
1:38:15we want to see a downtrend but in this
1:38:17case you can actually see that the price
1:38:19were in a trading range before the
1:38:22pattern appears and this is also
1:38:24completely fine you can actually trade
1:38:26the bearish momentum candle both as
1:38:29continuations but also reversals but now
1:38:32what about the entry point the stop-
1:38:34loss and Target level well the most
1:38:37straightforward entry point is where the
1:38:40momentum candle closes so enter right
1:38:43here as for your stop- loss we have a
1:38:45few different options here one stop-
1:38:48loss is to place the stop uh just above
1:38:51the highest point of the moment momentum
1:38:53candle but what we also can do is that
1:38:55we can look at previous Market structure
1:38:58so in this case remember that we had a
1:38:59trading range so we found some sort of
1:39:01resistance resistance resistance
1:39:03resistance so what we can do here is
1:39:05that we can actually draw a resistance
1:39:08Zone and one option is to actually place
1:39:10the stop loss all the way above the
1:39:13resistance but as you can see when we
1:39:15have the stop loss all the way up there
1:39:18the stop will be very very wide so yet
1:39:22another option here is to actually
1:39:23Define the low of the range so we can
1:39:26Define the sort of support uh area right
1:39:29here so if you prefer a tighter stop you
1:39:31can set the stop loss just above the
1:39:34previous support because a common
1:39:36principle in trading is that when we
1:39:38break previous support many times it
1:39:41will flip to become resistance in the
1:39:44future so if we use this stop placement
1:39:47we can actually allow for the price to
1:39:48come up and test this previous support
1:39:51as as resistance and we are still within
1:39:55a winning trade as for your profit
1:39:57Target you can either as always you can
1:39:59either use a risk reward ratio so you
1:40:01take this measurement and you measure
1:40:04using a risk reward ratio of two your
1:40:07target would be right around here right
1:40:10but when we have trading ranges we can
1:40:11actually also measure the the range so
1:40:15from high to low of the range and then
1:40:18we take this measurement and measure
1:40:20here from the breakout so we take the
1:40:22same length and our Target would be
1:40:24right around here all right guys so now
1:40:27it's finally time to take a look at the
1:40:28bull flag pattern and this right here is
1:40:32one of the best uh Candlestick patterns
1:40:34out there uh you may wonder why well
1:40:37this pattern appears super frequently in
1:40:40the market it's a reliable pattern and
1:40:42if you understand it it's also
1:40:45relatively simple to trade but first of
1:40:47all this right here is a complex pattern
1:40:49because it consists of multiple
1:40:52candlesticks the direction here as you
1:40:54can hear on the name is bullish and the
1:40:57type here is continuation so before the
1:41:00pattern appears we need to see an
1:41:01uptrend then the actual pattern appears
1:41:04and the goal of this pattern is to
1:41:06continue the price towards the upside to
1:41:08identify the bull flag pattern what
1:41:10we're looking out for the first candle
1:41:12here is a green candle this candle can
1:41:15be uh you know either strong or medium
1:41:18size it doesn't matter too much and we
1:41:20can have Wicks uh both an upper week and
1:41:23a lower week the next part of the
1:41:25pattern is that we want to see multiple
1:41:28small candles that goes in the opposite
1:41:31direction so for the bull flag we want
1:41:34to see multiple red candles preferably
1:41:37but it can also be a mix here between
1:41:39red and green candles the most important
1:41:41part is that the overall direction of
1:41:43these small candles should be either
1:41:46down or it can almost go sideways as
1:41:49well these candles can have both upper
1:41:51and lower Wicks but the important part
1:41:53here is that we wanted the candles to
1:41:55have relatively small real bodies the
1:41:58last candle of this pattern is a green
1:42:00candle and we want this green candle to
1:42:03be at least medium siiz preferably we
1:42:06want to see a strong green candle but
1:42:09what we are looking out for here is that
1:42:11we want we want the green candle to
1:42:13close above the opening of the last
1:42:17candle in the pullback so you can see
1:42:19the last candle open right here so we
1:42:22want the green candle to close above
1:42:24this point and in this case you can see
1:42:26that the green candle clearly closed
1:42:28above that point after this the pattern
1:42:31is confirmed and it indicates
1:42:33continuation to the upside so now let's
1:42:35take a look at the bull flag training
1:42:37strategy and as always the first thing
1:42:39we need to do is to identify the pattern
1:42:41so feel free to pause the video and try
1:42:44to do this on your own did you find any
1:42:46flag well in my opinion the most obvious
1:42:50flag is this moment right here here you
1:42:53can see that before the pattern we had a
1:42:55clear uptrend then we saw 1 2 3 and four
1:43:00small candles that went in the opposite
1:43:03direction of the trend and this right
1:43:06here was actually far from a perfect
1:43:07bull flag but it's important to
1:43:09understand that when you are trading in
1:43:11real markets you will very seldom find
1:43:14these sort of textbook perfect patterns
1:43:17more often than not the patterns will
1:43:19not be perfect and we as Traders need to
1:43:22be able to trade regardless and you may
1:43:24wonder why is this pattern not perfect
1:43:27well in my opinion the real body of this
1:43:30candle right here is a bit too large
1:43:33preferably we want this candle uh at
1:43:35least the real body of the candle to be
1:43:37smaller but this is still good enough
1:43:40after the four candles you can see that
1:43:42we do see a green candle finally
1:43:44emerging and what you also can notice is
1:43:47that this green candle closes above this
1:43:50line right here remember this line is
1:43:52Crea from the opening of the last Red
1:43:55candle and it is when this candle closes
1:43:59the bull flag is confirmed so how do we
1:44:01enter how do we place our stop- loss and
1:44:03how do we take targets well the most
1:44:06common entry point for the bull flag is
1:44:07to Simply enter at the candle close of
1:44:11the green candle some Traders also wait
1:44:13for a confirmation candle so they wait
1:44:15to enter all the way up here but many
1:44:18times it's enough to enter at the candle
1:44:20close of the green candle as for your
1:44:22stop- loss the stop- loss is usually set
1:44:25below the lowest point of the flag so
1:44:28right here we have the lowest point of
1:44:29the flag so we set our stop loss below
1:44:32that point we leave some wiggle room and
1:44:34when it comes to the Target level here
1:44:36we actually have multiple options one
1:44:38target option is to actually take
1:44:40profits already at this point which is
1:44:42the high of the uptrend in this uptrend
1:44:45you can see we have a high right here we
1:44:46have a high we printed another high and
1:44:48a common method is to take either
1:44:50partial profits meaning that you offload
1:44:53some of your position at this point or
1:44:56that you take full profit at this level
1:44:58another Target method is to use
1:45:00something called a measured move
1:45:02objective and what you do here is that
1:45:04you measure the impulsive move of the
1:45:06trend so you measure from low to high
1:45:10and you take that exact length and you
1:45:12measure from the low of the pattern so
1:45:14this would give you guys a Target around
1:45:16here and as I said some Traders use this
1:45:19right here as the first Target so they
1:45:21take some profits at this level and then
1:45:23they might take the rest of the profit
1:45:26all the way up here all right so now
1:45:28it's time to take a look at the bare
1:45:29flag pattern and the bar flag is a
1:45:31complex pattern because it consists of
1:45:33more than one Candlestick the direction
1:45:36here is bearish and the type is
1:45:39continuation so before the pattern
1:45:41appears we want to see a downtrend then
1:45:44we see the actual pattern and the goal
1:45:45here is to continue the price towards
1:45:47the downside to identify the bar flag
1:45:50the first Candlestick we're looking out
1:45:51for is a red candle uh preferably we
1:45:54want to see either a strong red candle
1:45:57or a medium siiz red candle it can have
1:46:00an upper Wick in this case it doesn't it
1:46:02can have a lower Wick the next part here
1:46:04of the pattern is that we want to
1:46:05identify multiple candles three or more
1:46:09that goes in the opposite direction of
1:46:12the actual Trend these candles can be
1:46:14either green or red and they can also be
1:46:17dogee candles like we're seeing right
1:46:19here this right here is a dogee this
1:46:21right here is a dogee but the important
1:46:23part here is that we want to see small
1:46:26real bodies of the candles and we want
1:46:28the movement to be in the opposite
1:46:30direction the last candle of the pattern
1:46:32is a relatively strong red candle and
1:46:35the general rule here is that we want
1:46:37the red candle to close below the
1:46:39opening of the last candle right here
1:46:42but you can see that uh and this is very
1:46:44important in this particular case you
1:46:46can see that if the red candle closes
1:46:49maybe around here you can see that the
1:46:52real body of the the red candle uh would
1:46:54be very small and this is something we
1:46:56we don't want to see we want the red
1:46:59candle to at least have a medium siiz
1:47:02real body so now let's take a look at
1:47:04how to actually trade the bare flag as
1:47:06always we will take a look at the entry
1:47:08level the stop- loss and the target but
1:47:11the first thing we need to do is of
1:47:12course to find the pattern and here on
1:47:16the chart we can see that we have a very
1:47:18clear downtrend we are printing both
1:47:21consecutive lower highs and we're also
1:47:23printing consecutive lower lows and here
1:47:27the most clear bare flag is this
1:47:29movement right here as you can see
1:47:31before the pattern appeared we had a
1:47:33strong movement towards the downside
1:47:35then we saw one two and three candles
1:47:38that went in the opposite direction once
1:47:40again this candle this green candle
1:47:43right here preferably we want the real
1:47:46body of this candle to be a little bit
1:47:48smaller but it's important to remember
1:47:50that markets are very seldom perfect so
1:47:53this pattern right here is at least in
1:47:55my opinion good enough what we can also
1:47:57see here is that the last candle of the
1:47:59pattern is a strong red candle that is a
1:48:02good sign and we can also see that the
1:48:03red candle clearly closes below the
1:48:06opening of the last green candle as for
1:48:09your entry point the most common way to
1:48:11enter is to enter at the candle close of
1:48:14the last Red candle for your stop- loss
1:48:17you usually want to place it above the
1:48:20highest point of the pattern so this
1:48:21right here is the highest point of the
1:48:23pattern and you want to place your stop
1:48:25loss uh just above that point when it
1:48:28comes to Target levels we have multiple
1:48:30options one way to set your target is to
1:48:32actually set it already at this point
1:48:35right here but you can see in this case
1:48:37when we enter right here you can see
1:48:40that the distance to the profit is very
1:48:43very small so in this case it might not
1:48:45make sense to use this profit Target
1:48:48instead you can use something called the
1:48:50100% measure move so you measure from
1:48:54the swing High to swing low before the
1:48:56pattern then you take this exact
1:48:58measurement you copy the length and
1:49:00perhaps your profit Target would be
1:49:03around this point so what's important
1:49:05here is that the length of this move and
1:49:08the length to your target should be the
1:49:11same size all right so now it's time to
1:49:13take a look at the bullish runaway Gap
1:49:16pattern and this right here is a very
1:49:18powerful pattern so make sure to really
1:49:21pay attention when it comes comes to the
1:49:23complexity for this pattern it's
1:49:25actually pretty hard to categorize but
1:49:27I'm calling this a simple pattern
1:49:29Because the actual pattern itself
1:49:32doesn't really consist of candlesticks
1:49:34but rather it consists of a gap however
1:49:37the direction for this pattern is
1:49:39bullish and the type here is
1:49:42continuation so before the pattern
1:49:44appears we want to see an uptrend then
1:49:46we identify the actual pattern and the
1:49:49goal of this pattern is to continue to
1:49:51push the price towards the upside all
1:49:54right so identifying this pattern is
1:49:55actually pretty simple all we need to
1:49:57look out for here is a move towards the
1:49:59upside and then we want to see a gap you
1:50:03can see this right here the space in
1:50:05between the highest point of this candle
1:50:08and the lowest point of this candle is
1:50:11considered a gap and this type of Gap
1:50:14where we have nothing in between the
1:50:16candles you can see not even the Wicks
1:50:18are touching is called a true Gap so
1:50:23what we're looking out for when it comes
1:50:24to the runway Gap here is that we want
1:50:26to see a true Gap so for example we
1:50:28don't want it to look like this let's
1:50:31say that this right here is the first
1:50:32candle and this right here is the second
1:50:35candle you can see that in this case we
1:50:37have a gap here between the real bodies
1:50:39of the candles so this right here is one
1:50:42type of Gap but what we're looking out
1:50:44for here is that we want not even the
1:50:46Wicks to touch and this pattern is
1:50:49confirmed already when this candle open
1:50:52opens so as you guys know for most
1:50:54Candlestick patterns the patterns will
1:50:56confirm at a candle close but for the
1:50:59bullish runaway Gap the pattern confirms
1:51:02at the open after the Gap and that is
1:51:05very important to have in mind so now
1:51:07let's take a look at the bullish runaway
1:51:09Gap trading strategy and the first thing
1:51:12we need to do here is of course to
1:51:14identify the pattern and on this chart
1:51:17the only real runaway Gap that can be
1:51:20found is right here you can see if you
1:51:23look closely on this chart you can see
1:51:25that we have multiple of these other
1:51:27gaps you can see for example right here
1:51:29we have a gap between the real bodies of
1:51:32the candles and for example right here
1:51:34as well and right here you can see that
1:51:37these other types of gaps when we have a
1:51:39gap between the real bodies is pretty
1:51:41common but to find a gap where not even
1:51:44the Wicks are touching is a more rare
1:51:46signal another thing that is important
1:51:48to notice here is that before the
1:51:50runaway Gap we need to see an uptrend
1:51:52and in this case we indeed saw an
1:51:54uptrend before the Gap then the Gap
1:51:56appeared and remember the the pattern
1:51:59confirms when this Candlestick opens so
1:52:02how do we trade this pattern well the
1:52:04most common entry point is to enter here
1:52:06at the open after the Gap as for your
1:52:10stop- loss you usually want to place the
1:52:12stop loss here below the lowest point of
1:52:15the Gap so this black line is the lowest
1:52:17point of the Gap and a common way to set
1:52:19your stop loss is to place it below this
1:52:22point uh why do we do this well it's not
1:52:25super uncommon for the price to actually
1:52:27pull back and test the low of the Gap
1:52:30this right here is what we call a gap
1:52:33fill and when we set the stop loss below
1:52:35this point we can actually allow for a
1:52:37gap fill and still not get stopped out
1:52:40and as for your Target you can use a
1:52:42simple risk W ratio so you can measure
1:52:44this movement right here you can take
1:52:46the measurement using a 2: one would
1:52:49give a Target around there using a 3:
1:52:52one would give a Target around there so
1:52:55now let's switch to attention here and
1:52:56take a look at the bearish runaway Gap
1:52:59we can consider this pattern a simple
1:53:01pattern because it consists basically of
1:53:03zero candlesticks it depends on you know
1:53:06how you define it but I Define this as a
1:53:09simple pattern the direction here is
1:53:11bearish and the type is continuation so
1:53:14to identify the pattern we need to first
1:53:16see a downtrend what we then want to
1:53:19identify is that we want to identify a
1:53:22true Gap so remember a true Gap is when
1:53:26we have space in between two candles
1:53:30where not even the Wicks are touching
1:53:33this pattern confirms already at the
1:53:36open of the Candlestick after the Gap so
1:53:39this pattern is confirmed already at
1:53:41this point and it indicates a
1:53:44continuation to the downside so now then
1:53:46how do we trade The bearish Runaway Gap
1:53:49well the first thing we need to do is
1:53:51that we need to identify the Gap and if
1:53:53you want to you can try to do this
1:53:55yourself and pause the video right now
1:53:58well guys did you find any Gap um in my
1:54:01opinion the most obvious Gap can be
1:54:03found right here you can see we have
1:54:05some complete space in between these two
1:54:08candles right so here we have a bearish
1:54:11runaway Gap you could also maybe argue
1:54:14that we have a tiny tiny Gap right here
1:54:18but preferably when we see these runaway
1:54:20gaps we don't really want to see very
1:54:23small gaps like right here we definitely
1:54:26prefer to see larger gaps like in this
1:54:29case as for your entry point the most
1:54:31common way to enter is to enter already
1:54:34at the open of the first candle after
1:54:37the gap for the stop loss we usually
1:54:39place the stop loss just slightly above
1:54:43the highest point of the Gap so the
1:54:45highest point of the Gap is right there
1:54:47and we place our stop loss just above
1:54:50this point and we also leave some wiggle
1:54:53room so if the price goes up to retest
1:54:55the Gap we still have some good chances
1:54:58here to not get stopped out and still be
1:55:01within a winning trade for your Target
1:55:03you can use a risk reward ratio so you
1:55:05can measure from the stop loss to the
1:55:08entry point you take this measurement
1:55:11and a 2:1 Target would give us a Target
1:55:14down here while a 3:1 would give us a a
1:55:18Target all the way down here all right
1:55:20guys so now it's time to switch the T
1:55:22and take a look at a very important
1:55:25family of candlesticks and I'm talking
1:55:28about dogee and spinning top candles so
1:55:32now let's spend a little bit of time
1:55:34talking about what these candles are and
1:55:37why they are so important so first of
1:55:40all dogee and spinning toop candles are
1:55:42part of a specific group that we call
1:55:46indecision candles and indecision
1:55:48candles indicate uncertainty in the
1:55:51market and they can signal potential
1:55:54shifts in the sentiment and we will talk
1:55:57more about that very soon and what's
1:55:59common about in decision candles is that
1:56:01these candles typically have small real
1:56:05bodies and long Wicks and this reflects
1:56:09that neither the Bulls or the bars are
1:56:12in full control and these type of
1:56:14candles can be useful in many different
1:56:17ways they can be used to identify
1:56:19potential reversals and they can also be
1:56:22used to provide warning signals so for
1:56:25example if you are in a trade whether
1:56:27you are trading long or short these
1:56:29dogey and spinning toop candles can give
1:56:31us warning signs that it might be time
1:56:34to actually exit the trade and so on and
1:56:36so on so now let's dive a little bit
1:56:39deeper into doy candles and as you can
1:56:41see here on the screen we have many
1:56:44different types of dogies they all have
1:56:47different and pretty funny names uh but
1:56:50the most important part about the the
1:56:52DOI candle is that if you take a look at
1:56:54the body of all the dois here you can
1:56:57see that the body is you know pretty
1:56:59much only a line which means that the
1:57:02candles open uh during the candle it
1:57:06moves up and down but the candle closes
1:57:10pretty much at the exact same level
1:57:13where it opened however it is okay for
1:57:15ad do candle to have a very very slight
1:57:18real body so it might look something
1:57:20like this but we do want to see the real
1:57:22body either being a complete line or
1:57:25have a very very small real body and now
1:57:28let's talk a little bit about the
1:57:29different types of dois because
1:57:31depending on where the real body is
1:57:34located the doy candles can actually be
1:57:37either bullish or bearish so for the
1:57:40first candle the candle right here this
1:57:41is called a classic dogee and this is
1:57:44where the price you know during the
1:57:45candle moves up and down but it go goes
1:57:48down here and closes pretty much in the
1:57:50middle of the candle so the classic
1:57:53dogee indicates indecision or in other
1:57:56words uncertainty in the market as for
1:57:59the next candle the longle dogee we can
1:58:01see that the real body here has shifted
1:58:05a slight bit up uh you can also have a
1:58:07long leg dogee where you have the body
1:58:10of the candle down here for example but
1:58:13what's important to learn here is that
1:58:14the higher up the body is the more
1:58:18bullish the candle will become and the
1:58:21lower
1:58:22the body the more bearish the doe candle
1:58:26will become so a longleg doe can be
1:58:29either more bearish or more bullish
1:58:32depending on where you find the body the
1:58:35next candle is called the dragonfly do
1:58:38and you can see that this is a case
1:58:40where the real body has been pushed all
1:58:44the way to the highest point of the
1:58:46candle so let's imagine how the price
1:58:48moved within this candle you can see
1:58:51that the price opened all the way up
1:58:53here during the candle the bars managed
1:58:56to push the price pretty far down but
1:58:59before the close of the candle the Bulls
1:59:02took control once again and actually
1:59:05managed to push the price all the way up
1:59:06to the top so this makes it so that the
1:59:10dragonfly dogee is actually considered a
1:59:13bullish candle however as with all
1:59:15patterns it it's important where the
1:59:18candle actually appears so this pattern
1:59:21if it comes off after an uptrend it
1:59:23doesn't really signal too much but if
1:59:26you find a dragonfly dogee after a
1:59:29downtrend in this case it can actually
1:59:31act as a reversal candle pretty similar
1:59:34to the hammer and as you know about the
1:59:37hammer it indicates a reversal to the
1:59:39upside the next dogee candle the
1:59:41gravestone dogee is pretty much the
1:59:44opposite of the dragonfly you can see in
1:59:46this case it open all the way down here
1:59:48the Bulls managed to push the price up
1:59:51but for the close of the candle the bars
1:59:54took full control once again and managed
1:59:56to push the price down to the opening
1:59:58price so this right here is a bearish
2:00:01reversal pattern especially if it comes
2:00:03after an uptrend the last do candle is a
2:00:06very weird one it's uh you can't see it
2:00:09right now let me actually move my camera
2:00:11so you can see the name the last candle
2:00:13here is called the four price DOI and
2:00:16this one is not too important to learn
2:00:18because it's very rare it's very very
2:00:21rare to find this four price dogee in
2:00:23the markets but this pattern is
2:00:25basically when the price opens and close
2:00:28at the same level and during the candle
2:00:30it doesn't really move at all so this is
2:00:32one of these candles that definitely
2:00:34signal uncertainty um and often when you
2:00:37see a four price dogee um they often
2:00:41indicate that you know this is something
2:00:42we actually don't want to trade all
2:00:45right so now let's take a look at how we
2:00:47can trade using the dogee candle on this
2:00:49particular chart you can see that we
2:00:50have a downtrend because we printed
2:00:52consecutive lower highs and we also
2:00:55printed lower lows and you can see that
2:00:58after this massive bearish uh this was a
2:01:01bearish momentum candle appeared you can
2:01:04actually see that we saw multiple
2:01:06multiple DOI candles emerging and
2:01:09remember that dogee candles at least
2:01:11regular dogee candles signals
2:01:14uncertainty so if you are in this short
2:01:17trade or in other words if you are
2:01:19betting against the direction of the
2:01:21market
2:01:22and then you see these multiple do
2:01:25candles up this can actually act as a
2:01:27warning signal and that you should
2:01:29perhaps at least sell some of your
2:01:31position or at least you know proceed
2:01:34with caution if we take a close look at
2:01:36the doy candle right here you can
2:01:38actually see that we had pretty much a
2:01:41dragonfly DOI right so if you are in a
2:01:43short trade this right here is
2:01:45definitely a warning sign however it's
2:01:47important to notice here that this is
2:01:49not enough justification for a long
2:01:52position and a reversal trade it's more
2:01:55like a signal to proceed with caution
2:01:58and as you can see after this doy
2:02:00candles appeared the price didn't
2:02:02reverse to the upside but it also did
2:02:05not continue the downtrend after the DOI
2:02:08candles we actually entered a trading
2:02:10range all right so last but definitely
2:02:12not least let's also take a look here at
2:02:14the spinning top candles and the
2:02:16spinning top candle is very similar to
2:02:19the dogee but the difference here is
2:02:21that for the spinning top candle we
2:02:24allow for larger real bodies so you can
2:02:27see that all of these four examples are
2:02:30examples of spinning top candles and
2:02:32here compared to the doe candle we have
2:02:35larger real bodies with that said in
2:02:38order to have spinning top candles we
2:02:40still want the Wicks here of the candles
2:02:43to be larger than the real body so A
2:02:47good rule of thumb here is that you want
2:02:49the wick both the upper and and the
2:02:52lower Wick to be at least bigger than
2:02:56the real body but now you might wonder
2:02:58you know what about if we have a
2:02:59spinning top candle with a very long for
2:03:02example lower Wick and you know a
2:03:05extremely short upper Wick isn't it this
2:03:08right here a spinning top candle well
2:03:11you could consider this a spinning top
2:03:13candle but if you look closely at this
2:03:16pattern you will see that this pattern
2:03:18is actually pretty much a hammer instead
2:03:21so what we have a spinning top candle
2:03:23with either a very short upper or lower
2:03:26week these patterns will actually act as
2:03:29you know Hammer pattern or you know
2:03:31shooting stars or hanging mans depending
2:03:34on where the candles appear here on the
2:03:38chart but what does you know all of
2:03:40these candles tell us about the price
2:03:42well once again they give us a similar
2:03:44meaning as the doy candle or in other
2:03:47words they indicate indecision in the
2:03:49market that neither the Bulls or the
2:03:52bars are in control so if we see you
2:03:54know multiple doie candles appearing you
2:03:56know that we're talking about a pretty
2:03:57uncertain market and that can act as a
2:04:00signal to either Exit your trade or
2:04:02depending on the context it can actually
2:04:04act as potential reversals as well all
2:04:07right friends so this long course is
2:04:10actually coming to an end very very soon
2:04:13but before we wrap up here I just want
2:04:15to thank you all so much for watching if
2:04:17you guys did enjoy this course please
2:04:20don't hesitate to drop a like on the
2:04:22video that really helps out more than
2:04:25you think and I'm super super thankful
2:04:27for all the support and also of course
2:04:30if you have any questions or feedback
2:04:32about this course feel free to leave a
2:04:35comment down below you can also drop a
2:04:37comment down below and tell me what do
2:04:40you guys want to see in future videos
2:04:42here on the channel and last but
2:04:44definitely not least when you are ready
2:04:47to take the next step on your trading
2:04:48journey I highly recommend that you
2:04:51check out this playlist next this
2:04:54playlist contains all the educational
2:04:56trading courses I have made so far on
2:04:58the channel and more videos are coming
2:05:01very very soon so yeah guys I hope you
2:05:04all will have an amazing day and I hope
2:05:06I will see you guys in another video
2:05:08very soon but for now guys take care
2:05:11Chia Chow

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