CANDLESTICKS PATTERNS

TIME IS 8:00PM GMT+1 (NIGERIAN TIME)

We Start Now… 🚸🚸🚸

Welcome everyone,
We are going to continue our Training session immediately

In our last class, we discussed about Candlesticks.

We saw the Origin of Candlesticks, their Structure, how they are formed...

We also went ahead to discuss the various types of Candlesticks and their significance

Most of the things we discussed were Single Candlesticks Patterns, but it’s more Confirmative
when you add more than one Candlesticks together to make Analysis...

So, for example,

You seeing a Hammer at the Bottom of a Trend does not automatically mean the Trend would
Reverse

But assuming the Hammer was Confirmed by some Patterns which we are going to see today,
it would give you a better Confirmation

So, we combine Candlesticks together

I.e. We Analyse them with respect to each other, in order to get a better view of the Market

So, let’s get on to the Candlesticks Patterns

They include;
BULLISH ENGULFING
BEARISH ENGULFING
TWEEZER TOPS
TWEEZER BOTTOM
MORNING STAR
EVENING STAR
BULLISH REJECTION
BEARISH REJECTION

We are going to be discussing each of this Patterns one after the other and we would be
making it clearer by seeing them on Charts, where they have occurred before.

After this series lectures on Candlesticks, you all would not be looking at your Charts just like
normal lines.
Even while you use your Indicators to Trade, you would be taking note of what the
Candlesticks are telling you

It gives you an edge over someone that just looks at Indicator and jumps in immediately

This is what we meant when we stated that, at least when we have covered most of these
topics you all would now be getting the clearer picture.

As you would be putting everything together

Because making Market Analysis is all about putting in all this your knowledge to make Market
decisions in few minutes

Let's start with the first Pattern

BULLISH ENGULFING
This Candlestick Pattern connotes a Bullish tendency of the Market

When you spot this Pattern, you should know that the Downward Trend is about to be turned
into an Uptrend

Hence, it’s a Bullish Reversal Candlestick Pattern

It forms after the Market has been in a Downtrend

Then, a Bullish Candle appears that totally Engulfs the Body of the Previous Bearish Candle in
the opposite side

Here are images captured on where they appeared on real Charts 📈

You could see that a Bullish Candle appeared after a Downward Trend and Engulfed a Previous
Bearish Candle

And immediately that happened, the Market began to Shoot Up in the opposite side

It Signifies that a Strong Buying Pool has entered the Market, hence a Reversal in Trend is
imminent.

So, Traders normally Open their Buy Orders when the Next Candle starts forming and place a
SL Below the Low of the Engulfing Bullish Candle

Criteria to Watch out for, to Confirm that it's a Bullish Engulfing Pattern

1) The Market must be in a Downtrend

2) The 2nd Candle Engulfs the Previous Candles Body in the opposite side

3) Stronger if 2 or 3 Previous Candles are Engulfed.

Let’s go to the Next Pattern

BEARISH ENGULFING PATTERN

This is the opposite of Bullish Engulfing Pattern

It's a Bearish Reversal Sign

It occurs when a Bearish Candle Engulfs a Previous Bullish Candle in the opposite side

Let's see some images including some on Real Charts 📈

So, when this occurs it Signifies that the Selling pool in the Market has just Increased

The Bears are increasing in numbers and they would soon pull the Price Down

What more than to join the majority 🤑

If you are on a Long Trade, you better Close the Trade and Exit with your Profit, then plan on
going Short on the Currency Pair
Criteria to fulfil to Confirm this Trend

1) The Market must be in an Uptrend

2) The 2nd Candle Engulfs the Previous Candle in the opposite side (I.e. the Previous
Candlestick should be a Bullish Candle)

3) The more previous Candles are Engulfed... the Stronger would be the Reversal

TWEEZER TOPS
This is also another Reversal Pattern

If you are looking closely at Charts, you would spot it

They are 2 Candlesticks with matching Tops

They Signify a Bearish Reversal

That means it's telling you that the Market would soon Enter into a Downtrend

Usually, after a long Uptrend.

The Opposite form of this is,

TWEEZER BOTTOM
It’s also a Reversal Sign

Signifies a Bullish Reversal

They are formed by 2 or more Candles with matching Bottom

Either on the Body or the Wicks

They Signify that Price is Rejected at a very STRONG Support (for Tweezers Bottom) or at a
very STRONG Resistance (for Tweezer Top)

We would talk about Support and Resistance in our Next Class

So, when you see this Pattern occurring

It's a Signal that a Reversal to the opposite side is imminent

So, as you study your Charts, don’t see the Charts as normal Candles again

Be looking at them closely to know what they are telling you.

The Chart is always speaking to you,

But are you ready to listen? 🤔

You are no longer ordinary Traders again, who only depend on Indicators alone

We want you all to be Market Commanders, speak to your Forex colleagues like the Boss that
you are

Analyse the Market and give them reasons why you are doing so.

So, always look closely at your Charts from today onwards

The Next Pattern we are going to be discussing is;

MORNING STAR
This is a Bullish Reversal Candlestick Pattern

When it occurs, it Signifies Reversal of a Downward Trend

It includes a Hammer or Doji in its Structure

That was what we’re trying to explain earlier that, you seeing Hammer or Doji or Shooting
Star or Inverted Hammer alone isn't enough to Confirm a Reversal

Look around them to see what is forming around them; this would further increase your
precision

Hence, more than one Candle is used in forming all these Candlestick Patterns (the more, the
better)

Let's see some images to help visualize how Morning Star 🌟 looks like
They are formed by a Bearish Candle

***A Doji or a Hammer and or Inverted Hammer

Then, a Bullish Candle.

You spot them at the End of Downtrends

And it Signify that a Bullish Reversal is imminent

It further Strengthens the Reversal Signal given by the Hammer or Inverted Hammer...

Hence, you can now Enter confidently

You place your Buy Order after the formation of the Bullish Candle

And your SL just below the Low of the Hammer or Doji

The Next Reversal Pattern is...

EVENING STAR
This is another similar Candlestick Pattern

It is a Bearish Reversal Pattern

It Signifies that an Uptrend after it has run its long course would soon Reverse back to a
Downward Trend

***It is formed by a Bullish Candle Shooting Star, Hanging Man or Doji (in-between)

Then, A Bearish Candle

Let's see some examples

Sometimes you would even see 2 Reversal Candles in-between the Bullish and Bearish
Candles

E.g. Seeing a Doji and a Shooting Star 🌟

It further Strengthens the Reversal Signal

This also applies to Morning Star Pattern

Next Candlestick Patterns, which we didn't add on the list above are;

3 WHITE SOLDIERS
&
3 BLACK CROWS

Let’s start with 3 White Soldiers,

This is a Strong Bullish Pattern

It is formed by 3 Bullish Candles following each other consecutively

It Signifies that the pool of Buyers in the Current Trend is more

Hence, they can push the Price Higher Up

Remember, you are always going in the direction of the majority

There is Strength in numbers

Let's see some examples...

The opposite of this is

3 BLACK CROWS
It Signifies a Strong Bearish Trend

It means, there are more pool of Sellers in the Market

So, you join in their Strength and grab your own Pips 🤑

It's not beneficial to ride against the Wave

Let's see the examples too

For the Signal to be valid,
Both for the 3 Black Crows & 3 White Soldiers

The Body of the 2nd Candle must be Bigger than the Body of the 1st Candle in the Pattern.

The 3rd may be the same but not Smaller

It Signifies an increasing Buying or Selling pressure

They are very potent Bullish or Bearish Patterns.

So, be on the lookout for them

The last Pattern we have is...

BEARISH AND BULLISH REJECTION PATTERN

They are formed when more than 2 Candles gets Stopped Out at a very Strong Resistance or
Support Point or Zone

Price could not Break any of those Points

We would talk more on this when we discuss Resistance and Support in our next Class

So that the concept would be clear to everyone.

Because you need to know what Support and Resistance are, especially the new ones

Here, we mean those who are entirely new to the world of Forex Trading and are probably
starting their journey in Forex on this platform for the first time.

So, these Patterns are always forming and when you are looking closely, you would spot it.

Candlesticks are very Important Tool for any Trader. And as Forex Traders, you need to be
well accustomed to it.

WE WOULD STOP HERE TONIGHT

We believe it's yet another wonderful session as usual, and hope we're all following along
smoothly? 🤔

As usual, we would take our rest for the Weekend and resume the Training and proper Market
Analysis on Monday.

This would allow those who are behind to catch up.

DO HAVE A RESTFUL WEEKEND EVERYONE, EVEN AS WE CONTINUE TO TAKE NECESSARY

PRECAUTIONS AGAINST THE COVID-19 OUTBREAK.

THE QUESTION GROUP IS OPENED