Advanced Bullish Candlestick Cheat Sheet

April 06, 2017 12:14

Dear Traders,

In our last update, we discussed Advanced Bearish Candlesticks by analysing different time frames and allowing traders to better understand the market sentiment.

As you may be aware, Candlestick charts provide greater information than traditional bar charts. Bar charts emphasise high and low more than anything else, whereas Japanese candlesticks depict open price and close price.

Traders who analyse candlestick patterns should determine whether the price action can predict reversals or trend continuation. Combining candlestick patterns with other technical analysis tools such as MetaTrader 4 Supreme Edition can provide an estimation of possible price movement.

Nonetheless, don't rely on candlestick formation alone – back it up with other tools and create your own trading strategies.

In the summary below, you will be able to differentiate between various advanced bullish candlestick patterns.

Bullish Reversal Patterns

Bullish 3 Inside Up

The number of candles in the configuration – 3

  1. Connected to bullish Harami Pattern.
  2. The first candle is bearish and downtrending.
  3. The second candle is bullish.
  4. The third candle has a higher close than the second candle.

Bullish 3 Outside Up

The number of candles in the configuration – 3

  1. The market is characterised by a prevailing downtrend.
  2. Followed by the engulfing candle.
  3. The third candle has a higher close price then the second candle.

3 White Soldiers

The number of candles in the configuration – 3

  1. The market is characterised by an uptrend or end of downtrend.
  2. We see a white marubozu candlestick as the first candle.
  3. Next two candles make higher highs.

Concealing Baby Swallow

The number of candles in the configuration – 4 (very rare pattern)

  1. Two falling Black Marubozu candles at the beginning confirm the downtrend.
  2. The third candle is a short black with or without a downside gap.
  3. The third candle trades into the previous candles' body, producing a long upper shadow.
  4. The fourth black candle completely engulfs the third candle, including the shadow.

Morning Star

The number of candles in the configuration – 3

  1. The market is characterised by a downtrend or retracement in a bullish trend.
  2. Black candlestick is observed as the first candle.
  3. Followed by a doji or small candle.
  4. The third candlestick is white bullish momentum candle.

Piercing Line

The number of candles in the configuration – 2

  1. The first candle is a black momentum candle.
  2. The second candlestick opens up, goes slightly down and closes more than halfway into the body of the first candle.
  3. The second candle fails to close above the body of the first candle.

Bullish Belt Hold Lines

The number of candles in the configuration – 1

  1. After the drop in the price, we observe a White Marubozu candle at the support.
  2. Double or triple bottom support precedes the Belt Hold Lines pattern.

Harami Cross

The number of candles in the configuration – 1

  1. The candle that resembles the cross appears at support.

Harami Bullish

The number of candles in the configuration – 2

  1. The market is characterised by a prevailing downtrend.
  2. A black candlestick appears as the first candle.
  3. The next candle is characterised by the white body which is completely engulfed by the body of the first candle.

Tweezers

The number of candles in the configuration – 2

  1. The first candle is a bearish candle and it closes near the support or daily low.
  2. The second candle completely negates the first so it erases all losses of a previous candle.

Bullish Squeeze

The number of candles in the configuration – 3

  1. A black candlestick appears on the first candle.
  2. The second and the third candles each have lower highs and higher lows than the previous candle.
  3. Their color is not important; the size of the three candles does not matter.

Bullish Continuation Patterns

Rising 3 Methods

Number of candles in the configuration – 3-6

  1. The first candle is a strong bullish candle that retraces next three candles, though the second, third and fourth candle remain within the range of the 1st candle.
  2. Those are characterised by consecutive lower highs where wicks may slightly vary.
  3. The final candle breaks resistance to the upside and makes a bullish continuation.

Side By Side White Lines

Number of candles in the configuration – 3

  1. The first candle we see is a long white candle that appears at resistance.
  2. The second candle is a white bullish candle that follows the first one, making a break through resistance.

Marubozu Bullish

Marubozu defines strong buying off the resistance or strong buying off the support. Marubozu is also known as momentum candle.

Have in mind that wide range candles state that there is high volatility (interest in the currency pair). Narrow range candles state that there is low volatility (little interest in the currency pair). By combining both advanced bearish candlestick and advanced bullish candles, you raise the odds for a successful trade.

Low volatility leads to high volatility and high volatility leads to low volatility – remember that!

MT4 Supreme Edition + Volatility Protection

Cheers and safe trading,

Nenad


' + key + "=" + value + ''); } else { return uri + separator + key + "=" + value; } } function getCookie(name) { var value = "; " + document.cookie; var parts = value.split("; " + name + "="); if (parts.length == 2) return parts.pop().split(";").shift(); } $('.kmi-listener').on('click', function() { if($(this).attr("href").indexOf('kmi=') == -1) { var km_cookie = getCookie('km_ni') || getCookie('km_ai'); if(km_cookie) { $(this).attr("href", updateQueryStringParameter($(this).attr("href"), 'kmi', km_cookie)); } } });