Common Dojis

Question 1

1. What Is this pattern?
2. how many candles are nessesary to complete?
3. what do the candles need to be doing?
4. what does it signify?
5. how strong is the pattern?

Answer 1

1. Evening Star
2. 3 days (3 dojis)

3.

Day 1: Large Pump Up (big green_

Day 2: Small Candle (Modest Price Increase)

Day 3: Large red candle that opens at a price below the previous day and then closes near the middle of the first day.

4. Price Reversal
5. very Strong but check with trendlines and Price oscillators

Question 2

1. What is the name of this formation
2. lable and explain the criteria
3. what does it signify?
4. what other indicators can be checked
5. How strong is the indicator
6. trading Strategy

Answer 2

1. bearish harami: received its name because it resembles the appearance of a pregnant woman. “Harami” is the Japanese word for pregnant.
2. (see image)
3. Bearish turnaround
4. relative strength index (RSI) and the stochastic oscillatora. trader may use a 200-day moving average to ensure the market is in a long-term downtrend and take a short position when a bearish harami forms during a retracement.
5. The size of the second candle determines the pattern’s potency; the smaller it is, the higher the chance there is of a reversal occurring.
6. Price Action: A short position could be taken when price breaks below the second candle (harami candle) in the pattern. This can be done by placing a stop-limit order slightly below the harami candle’s low, which is ideal for traders who don’t have time to watch the market, or by placing a market order at the time of the break. Depending on the trader’s appetite for risk, a stop-loss order could be placed above either the high of the harami candle or above the long white candle. Areas of support and resistance might be used to set a profit target.

Question 3

1. What is the name of this Pattern
2. Explain the structure
3. how significant is the structure

Answer 3

1. Dark Cloud Coverxplain
2. down candle opens above the close of the prior up candle , and then closes below the midpoint of the up candle.. the confirmation is another down candle
   a) An existing bullish uptrend.
   b) An up (bullish) candle within that uptrend.
   c) A gap up on the following day.
   d) The gap up turns into a down (bearish) candle.
   e) The bearish candle closes below the midpoint of the previous bullish candle.
3. Both candles should be relatively large, showing strong participation by traders and investors(volume). When the pattern occurs with small candles it is typically less significant. large real body.. small shadow

Question 4

1. What is the name of this Pattern
2. what does the Pattern signify
3. how do people trade this
4. how significant is it

Answer 4

1. Shooting Star
2. bearish because the price tried to rise significantly during the day, but then the sellers took over and pushed the price back down toward the open.
3. Traders typically wait to see what the next candle (period) does following a shooting star. If the price declines during the next period they may sell or short.

If the price rises after a shooting star, the formation may have been a false signal or the candle is marking a potential resistance area around the price range of the candle.

4. most effective when it forms after a series of three or more consecutive rising candles with higher highs

The candle that forms after the shooting star is what confirms the shooting star candle. The next candle’s high must stay below the high of the shooting star and then proceed to close below the close of the shooting star. Ideally, the candle after the shooting star gaps lower or opens near the prior close and then moves lower on heavy volume.

Question 5

1. What is the name of this pattern
2. explain the structure
3. what is the significance of the pattern
4. how is it traded

Answer 5

1. bearish engolf
2. Ideally, both candles are of substantial size relative to the price bars around them. Two very small bars may create an engulfing pattern, but it is far less significant than if both candles are large.

The real body—the difference between the open and close price—of the candlesticks is what matters. The real body of the down candle must engulf the up candle.

3. A bearish engulfing pattern can occur anywhere, but it is more significant if it occurs after a price advance. This could be an uptrend or a pullback to the upside with a larger downtrend.

The pattern has greater reliability when the open price of the engulfing candle is well above the close of the first candle, and when the close of the engulfing candle is well below the open of the first candle. A much larger down candle shows more strength than if the down candle is only slightly larger than the up candle.

4. Before acting on the pattern, traders typically wait for the second candle to close, and then take action on the following candle. Actions include selling a long position once a bearish engulfing pattern occurs, or potentially entering a short position.