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Introduction to Advanced Candlestick Patterns

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1 Introduction to Advanced Candlestick Patterns
Thank your Host – Mona and The FOREX Traders Association for inviting you to speak. Introduce Pat Johnson, Business & Marketing Director and Debi McDonough, Editorial Department Explain this is Advanced by request but the beauty of candlesticks is the quick and easy visual … Introduction to Advanced Candlestick Patterns

2 Advanced Candlestick Patterns
Fry Pan Bottom Cradle Pattern Jay-Hook Scoop Pattern Belt Hold Breakout Patterns

3 Fry Pan Bottom The downtrend starts waning with the appearance of small trading bodies As the trend starts slowly curling up, a gap up in price indicates that strong buying sentiment has now returned

4 Long Rounded Curved bottom
Fry Pan Bottom Long Rounded Curved bottom

5 Fry Pan Bottom – minutes, days, months
The indecisive rounding bottom is the predominant factor

6 Fry Pan Bottom - Past Analysis
Big Percent move at top has a different meaning when a pattern can be identified

7 Fry Pan Bottom measuring point
A dimple usually marks the Halfway point

8 Fry Pan Bottom - A Break Out or Failure?
Easy identification of a failure, which makes for easy stop loss procedures

9 Fry Pan Bottom can become a Cup and Handle
Or a J-hook pattern

10 Fry Pan Bottom – Exuberant buying
Want to see break out buying

11 Fry Pan Bottom – What is expected?

12 CLWR – Classic FP results

13 MICC – excellent option trades

14 VCI Expected results 55% Gain

15 SQNM Breaking into new highs

16 INCY What is the entry strategies?

17 MEOH Option Strategies

18 SPWRA What does a gap up tell us?

19 BAS – What do you do with this chart?

20 MD What pattern?

21 MGM – Next target? Then what?

22 What do we want to see at the end of a FPB?

23 What Are we looking for now?

24 FPB/J-hook classic Fry Pan Bottom J-hook

25 Cradle Pattern The Cradle Pattern is a symmetric bottom pattern that is easy to identify. A downtrend becomes obvious with a large black candle at the bottom. A series of small or indecisive trading days trade in a flat area. A bullish candle, more powerful with a Bullish Engulfing signal, is formed of approximately the same magnitude as a Bearish candle at the end of the downtrend. This signifies that the Bulls have come out of the indecisive trading area with decisive force.

26 Cradle pattern

27 Cradle Pattern

28 Cradle Pattern what is the predominant indicators?

29 Cradle pattern

30 Cradle Pattern at the MA’s

31 Cradle pattern

32 Jay Hook Pattern The first move of the uptrend is very strong.
A candlestick sell signal indicates a pullback about to occur. After a few days, small indecisive candles start to appear Doji, small Hammers, Bullish Engulfing signals

33 Jay Hook Pattern The first test becomes the recent high
Indecision as found in candlestick sell signals at the recent high becomes a quick indicator to get out of the position A Bullish candle breaching the recent high illustrates that investor sentiment is taking prices up

34 Jay Hook Pattern How to differentiate between profit taking and a full-scale reversal.

35 J-hook

36 Jay Hook

37 J-Hook – How to Identify
The pull back is stopped when Candlestick buy signals appear Stochastics do not get to the Oversold area

38 J-hook - what is first criteria?
A strong price trend

39 J-Hook with added confirmation
Indecisive trading at a major moving average Adds more evidence of a J-hook pattern potential

40 J-Hook – Easy Expectations

41 Scoop Pattern An extended flat trading area
Followed by a pullback Buy signals bring price back up to flat trading range Once price breaks above flat range, look for strong uptrend

42 Scoop Pattern formation

43 Scoop Pattern- Completed

44 Scoop pattern

45 Scoop pattern off the MA’s

46 Scoop pattern - Do not scan for a Scoop

47 Scoop pattern Use it to analyze

48 Scoop Pattern - What should happen upon confirming?

49 Scoop Pattern - A strong trend to potential targets

50 DHI 50 MA resistance?

51 Mini Scoops

52 WY

53 LVS

54 PCX

55 MEE What is the buy criteria?


57 Belt Hold Pattern Strong prevailing trend
The candlestick body should be the opposite color of the prevailing trend Gap on the open, continuing the trend The open is the high or low of that trend The length of the body should be a long body. You can read my full article on ‘The Belt Hold Signal’ in Feb 2006 issue of Stocks & Commodities Magazine. The Bullish Belt Hold is a long white candle that has gapped down in a downtrend. From it’s opening point, it moved higher for the rest of the day. The bearish Belt Hold is just the opposite. It is formed with a severe gap away from the existing uptrend. It opens at it’s high and immediately backs off for the rest of the day

58 Belthold

59 Belthold - Adds strength to existing trends

60 Belthold – shows the sellers are flushed out

61 Belthold – gets rid of the last of the sellers

62 Belthold

63 Belthold

64 Belthold Bearish

65 Knowing when to get on board and when to take profits.
Breakout Patterns Knowing when to get on board and when to take profits.

66 Breakouts

67 Breakouts

68 Breakout – where to buy?

69 Moving Averages Support






75 Analyzing The Market

76 DOW

77 MA’s support and targets

78 MA’s act as magnets

79 MA’s and patterns

80 MA’s once breached , will come back and test

81 MA’s Targets

82 MA’s – first attempts usually fail

83 Wave 1-2-3

84 The T-line

85 Trend channels

86 Trading Gaps Gaps represent enthusiasm to get into a position to the point that investors will pay prices away from any of the previous day's trading range. Great for identifying panic selling at the bottom and exuberant buying at the top.

87 High Powered Scanning Techniques with Candlesticks
Market trend Strongest sectors Strongest signals in those sectors Additional indicators confirming Best Target potentials Easy stop loss points

88 HAR – Stop Loss

89 Analyze best potentials
The Signal The pattern Where is it moving from? Ma’s, trendlines? Where is the next resistance area? What is the sector doing?

90 Money Management Eliminate Emotions

91 The Point of investing is to have the probabilities in your favor
The Point of investing is to have the probabilities in your favor! Candlestick signals provide the positive probabilities

92 Candlesticks are merely the graphic depiction of what investor sentiment is doing

93 Trend Analysis Made easy with Candlesticks

94 2008 Downtrend Easy analysis
Sell signals at declining MA’s Double Top at 200 MA Dumpling Top Cradle BUY J-hook

95 MA’s support to resistance

96 Double Top at 200 MA

97 Dumpling Top has expectations

98 The Bottom – Morning Star/Cradle Pattern

99 J-hook ends with Cradle pattern

100 What is the market doing Now?

101 Recent Rec - XTEX

102 CSIQ

103 MIPS buying the BO

104 CCME buying the J-hook

105 SOHU buy on BO

106 Buy when the patterns say to buy - BAS

107 F signals and MA’s

108 Cradle Pattern – indicates very strong uptrend
What was the market doing?

109 DOW trend

110 Signals at the MA’s make HP trades

111 XIDE buy on BO confirmation

112 WFR – signals need confirmation


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