Learn To Trade
Models of individual Japanese candles
22-08-2017 | No Views : 525
Because of the importance of Japanese candies in trading in any financial market, and for the many traders who use their charts, we will talk about the most important models of Japanese candles, which we will take in a number of lessons to clarify the characteristics of each model and the most important conditions of its composition at the beginning. How to trade them.
In this lesson we will explain three of the two important individual models, meaning not to order according to the importance of the model, since the graph did not show us the model in order.
Explanation of Japanese candle patterns
The model is one of the important models, which depends on the traders in trading, which is reflective models that cause the reversal of the trend, and indicates the sellers to overcome the buyers, as at the beginning of the meeting will be the control of buyers and climb prices until the sellers dominate the end of the meeting and prices fall Again to close close to the opening price.
It is worth mentioning that the ideal candle of the Shahab comes after a gap between it and the previous candle.
1- The body of the candle is small and down, with a long upper tail, and no bottom tail, if any, is too small.
2- The tail must have a double height of the candle body at least, and the longer it is the better.
3- Come at the end of the uptrend.
4- After a price gap between it and the previous candle.
Note: It is possible to dispense with the condition of the quadrilateral without which the model is also true but weaker, and it can not be dispensed with one of the other conditions.
It is preferable to wait for a bearish confirmation candlestick after the bearish pattern before entering into any short positions. The second candlestick should be a bearish candlestick and the closing price should be the lowest of the candlestick to reflect the sell-off of the pair and the price will change its course and start a new bearish direction.
Hammer inverted model:
The inverted Hammer model is similar to the Neanderthal model in the description and conditions. However, the hammer pattern is at the end of a bearish trend as opposed to the bearish pattern at the end of a bullish trend.
As mentioned above, the hammer inverted pattern comes at the end of the bearish trend to reflect the weakness of the bearish momentum and the start of purchasing power in the emergence and acquisition of trades, pushing the price to close during a certain period near the opening.
It is preferable to wait for a bullish confirmation candlestick before entering into a purchase. Also, with the appearance of this form, it is preferable to break out of the sale even if the price does not reach the specified target yet. The candle following the hammer pattern inverted is a bullish candle. Its real body is large to reflect the strength of the bullish momentum. And change the pair to its bearish trend already.
However, the inverted hammer model is relatively weaker than the hammer model because, given this model psychologically, the selling forces still exist in the markets, which pushed the price back from its highs during the trading session. For the hammer model , The selling forces have failed to maintain the continuation of the decline of the pair and already began purchasing power in the acquisition of trading with all the strength.
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