Candlestick Patterns

[ehabelmasre]

The Three Methods pattern





The Rising and Falling Three Methods Patterns

the Three Methods pattern is a trend continuation pattern that can appear in an uptrend or a down trend. In an uptrend it is called the rising three methods pattern and in a downtrend it is called the falling three methods pattern. The three methods pattern consists of at least five candlesticks but may include more. It is similar to the flag or pennant formations and also represent a period of congestion or consolidation.
The Rising Three Methods

The Rising Three Methods pattern is a continuation pattern that appears in an uptrend. The first candlestick in this pattern is a light bullish candlestick with a large real body. The following few candlesticks should be smaller bearish candlesticks that are dark in color. These candlesticks should not exceed the range of the first candlestick. In other words it should be within the high and low of the first candlestick. The last candlestick that completes the pattern should open higher than the close of its preceding candlestick and should close above the close of the first candlestick. This pattern is more reliable if the first candlestick does not have much upper and lower shadows.
The Falling Three Methods

The Falling Three Methods is the opposite of the rising three methods and appears in a downtrend. The first candlestick in this pattern is a dark bearish candlestick with a large real body. The following few candlesticks should be smaller rising candlesticks that are bullish and light in color. These candlesticks should not exceed the high or the low of the first candlestick. The last candlestick that completes the pattern should below the close of its preceding candlestick and should close lower that the close of the first candlestick.

[ehabelmasre]

Three White Soldiers,






The Three Advancing White Soldiers, the Advance Block, and the Stalled Pattern

The Three Advancing White Soldiers, which is sometimes referred to simply as the Three White Soldiers, the Advance Block and the Stalled Pattern are three similar candlestick patterns thatconsist of three bullish candlesticks. These are three moderate trend reversal patterns. The Three Advancing White Soldiers usually indicates a weakness in an established down trend and the potential emergence of an uptrend. However, the Advance Block and the Slatted Pattern have bearish connotations, and indicate possible weakness in an uptrend.
Three Advancing White Soldiers

The Three Advancing White Soldiers pattern is the opposite of the Three Black Crows pattern. It is called the Three Advancing White Soldiers patternbecause it consists of three relatively long bullish (advancing) candlesticks that are light in color. Each of the three candlesticks should close on or near the high price for the period and, with each candlestick making steady advances in price. Each candlestick should not have long upper shadows or wicks and should preferably open within the real body of the preceding candlestick in the pattern, though the latter is not essential. When this pattern appears in a downtrend, it indicates the potential emergence of strength and a possible trend reversal. However, if the three candlesticks are over extended and make significant advances you may need to be wary of overbought conditions.
The Advance Block

The Advance Block pattern is similar in appearance to the Three Advancing White Soldiers pattern as it also consists of three bullish candlesticks that are light in color. However, each successive candlestick in this pattern has a shorter real body and possibly longer shadows. The shorter real bodies (and possibly longer shadows) indicate an increasing weakness and when it appears in an uptrend, it warns of a potential end to a rally. However, this is a moderate pattern and does not necessarily indicate the emergence of a downtrend as the candlesticks are still bullish. Therefore this pattern should be used to protect a long position rather than entering a short position. The appearance of a bearish candlestick pattern, which would signal the start of a possible downtrend, should be used to enter a short position.
The Stalled Pattern

The Stalled Pattern, which is also referred to as the Deliberation Pattern, is another candlestick pattern that consists of three bullish candlesticks that is similar in appearance to the Three Advancing White Soldiers pattern. However, while the first two candlesticks in this pattern have a relatively long real body, the third candlestick has a short real body, indicating that the uptrend is running out of momentum. The third, smaller candlestick can gap away from the other two candlesticks, in which case it becomes a star. Like the Advance Block, the Stalled Pattern does not necessarily mark the emergence of a down trend and is more of an early warning that the uptrend is weakening. Therefore the Stalled Pattern should also be used to protect a long position rather than be used to enter a short position.

[ehabelmasre]

Advance Block/Stalled Pattern

The Advance Block and Stalled Pattern (also known as the Deliberation Pattern) are candlestick patterns made of three bullish candlesticks that often occur during an uptrend and warn of a slowing uptrend, but not necessarily a trend reversal.

Advance Block Candlestick Pattern



The advance block pattern occurs when on the first day a long bullish candlestick appears followed by another long bullish candlestick that opens within the real body of the first day’s real body and closes above the first day’s close and high. Also, a long upper shadow should appear on this second day. The third day is a small bullish candlestick that usually opens within the second day’s real body and closes above the second day’s close; it should have a upper shadow as well. The focus of this pattern is that the market is making new highs, but the bullish candlesticks’ real bodies are getting progressively smaller as prices make these new highs. The upper shadows are showing that bulls wish to push prices higher, but during the day the bears are able to successfully push prices down off of the highs and the bulls have to settle for gradually smaller gains.

For a definitive definition, ThinkorSwim (2011) charting package defines the advance block as:

Each candle is bullish
Each candle opens within the real body of the previous candlestick
The second day’s candlestick real body must be 70% or less of the first day’s real body and the third day’s real body must be 70% or less of the second day’s real body.
The second and third day have a long upper shadow that is at least 75% of the height of the prior 20 day average of candlesticks’ real bodies.

Stalled Candlestick Pattern or Deliberation Candlestick Pattern



The stalled pattern or deliberation pattern is like the advance block in that it occurs during an uptrend and warns of a slowing uptrend and is made up of three bullish candlesticks. The defining characteristic is the third day is a small candlestick that gaps up like a star or is located at the upper end of the second day’s bullish candlestick real body much like a harami pattern.

Advance Block and Stalled Candlestick Pattern Suggest Selling of Longs



suggests that the advance block and stalled pattern be used to sell out existing longs, but does not suggest going short. The advance block and stalled pattern should not be considered as reversal patterns. Often the advance block and stalled pattern lead into a period of consolidation, though at times they can lead to a reversal of trend to the downside.

[universalfx]

This is very nice to know the different kinds of patteren about candle stick. But this is realy hard to recognise them in live trading session . I hope that long term practice can help us to know and recognise those candle sticks during trading time to make a good decission to open or close a trade.

[sichone]

Beside candlesticks as explained above, I trade using some technical indicators. Parabolicsar SMA 10 and SMA 15, Bolinger bands, CCI. I will open buy or sell of a pair traded when I see they confirm each other minimum 85% confirm of the technical indicators I used.

[cochy17]

likes to work with the dark cloud covers with the pattern recognition with the drawing of the chart. as those gives of the better on precision with the returns as capturing of the further trend direction of the market. on working along with the combination of technical indy system with the initials on defining use on finale as referring the best on options on working of the good requests on opening of the new position.

[Sameeh]

candlesticks are good and powerful tools for trading and it can be used for making of good money because its patterns give the trader goo d indication about the next movement of the market and so the trader can catch the chance from its beginning and so this will increase the profits and will make the stops are tight and so the risk will be small, there are different types of patterns and the trader should know most of them if he wants to make an effective trading with the candles and increase the winning rates, i always trade with the candlestick chart and use the candlestick patterns in combination with the other tools and this help me to find good positions and help me to make some money in many cases.

[FXOpen Trader]

candlesticks are good and powerful tools for trading and it can be used for making of good money because its patterns give the trader goo d indication about the next movement of the market and so the trader can catch the chance from its beginning and so this will increase the profits and will make the stops are tight and so the risk will be small, there are different types of patterns and the trader should know most of them if he wants to make an effective trading with the candles and increase the winning rates, i always trade with the candlestick chart and use the candlestick patterns in combination with the other tools and this help me to find good positions and help me to make some money in many cases.

With the correct use of the Candlestick patterns we would be able to locate the correct trends.

[Katrina]

Candlestick patterns capture the attention of market players, but many reversal and continuation signals emitted by these patterns don't work reliably in the modern electronic environment.

[FXOpen Trader]

Candlestick patterns capture the attention of market players, but many reversal and continuation signals emitted by these patterns don't work reliably in the modern electronic environment.

I can say for sure that if we are looking to get income we will need to use a Reliable trading based system.