The Only Candlestick Pattern Trading Video You'll Ever Need...

0:00 in this ultimate video course you will learn everything you need to know about Candlestick patterns for trading stocks Forex crypto or any other Financial Market by watching the full course you will not only be able to trade Candlestick patterns like a pro but you will also gain the edge to profit in both Bull and bar markets so hello guys and welcome to this Candlestick pattern trading course this right here is going to be a pretty long video so make sure to you know grab a pen and paper perhaps grab a coffee as well and without further Ado let's get started here and let's begin here by super quickly taking a look at what you can expect to learn from this course we

0:46 will start this course off by taking a look at both how to read but also how to understand candlesticks and Candlestick patterns we will take a look at the very Basics but we will also look at Concepts like Candlestick strength Candlestick momentum we will take a look at Wicks and much more after chapter one when we have a good understanding of the basics it's time for chapter 2 and in this chapter we will take a look at Candlestick pattern classifications in order to master Candlestick patterns it's of course very important to understand you know what type of Candlestick patterns you are trading what types do you want to focus on what types do you want to avoid and so on and so on so chapter 2 here is very

1:32 important and this will be a quick chapter um because every single candas pattern has three different categories every pattern has a complexity level every pattern has a direction and a type and as I said don't worry if this sounds a little bit complicated right now it will be clear very very soon in chapter 3 we are going to take a look at the best reversal Candlestick patterns and we will not only look at the patterns but we will also take a look at trading strategies for every single Candlestick pattern and reversal Candlestick patterns are one of the most effective Candlestick types and if you learn all of these patterns and even more importantly if you also learn about the

2:17 trading strategies for these patterns I'm sure you will become a much better Trader and for example if you take a look at this image right here in the upper right corner this right here is an example of a reversal Candlestick pattern and we will take a look at that exact pattern and how to trade it later on in this video and so much more uh but now in chapter 4 it's time to take a look at the best continuation Candlestick patterns and we will of course also take a look at trading strategies for every single pattern understanding continuation patterns is something you pretty much can't do without as a Trader and in chapter 4 I will talk about multiple continuation patterns including one of my personal

3:02 favorite patterns of all time so make sure to stay tuned for that and last but definitely not least we're going to take a look at the dogee and the spinning top candles and these are a specific family of Candlestick patterns that is super important uh to understand as a Trader these are patterns that happens all the time in the market and they can provide significant signals uh both warning signs but also ENT signals that we as Traders need to be able to utilize but all right guys let's get started here with chapter one all right so before we start looking at all the Candlestick patterns and you know everything you need to know about the actual

3:47 candlesticks we of course have to start here with the basics and that is of course how do we read candlesticks and how do we read Candlestick charts well first things first we have two different types of candles we have a red candle which is also called a bearish candle and we have a green candle which is also called a bullish candle sometimes if you see a black and white chart it is the green candle that is white and the Black Candle is red and the difference between these candles is that during the red candle the price goes down and during the green candle the price goes up and each candle can represent different time

4:34 periods so one Candlestick can be for example one day uh but one Candlestick can also represent for example 1 hour uh I'm sorry for my ugly writing here but I hope you can see uh and one candle can for example represent one minute and these different time periods right here is what we call time frames and when you are looking at the chart in for example trading view you can choose what type of time frame you want to trade so for example if you choose a daily time frame then every Candlestick on the chart will represent one day but if you choose a for example one minute time frame then every Candlestick you see on the chart

5:21 will represent 1 minute and so on and so on but to make this example simple we can think about every Candlestick right here as representing one day and now and this is very important every single Candlestick has four different points we have a high we have a open we have a close and we have a low and for the red candle remember that during this candle the price Falls so the candle opens right here or in other words if this is a daily candle the open price is the price level at the start of the day the high right here is the highest point the price reached during the day so perhaps the price opened right here it went up

6:07 all the way up here to the high then the next Point here is the low that is the lowest point the price reached during the day so as I said the price might start right here it went up to the high but then during the day the price went down all the way down here to the lowest point I hope you can see all the way down to the lowest point and then before the end of the day the price went up all the way way here to the close so during that red candle the price might have moved something like this right and when you understand the bearish Candlestick you will also very easily understand the bullish Candlestick this is basically the exact same thing but the opposite so in this case the price opens or starts all the way down here during the candle

6:54 the price went down here to our lowest point all the way down here and during the day the price went up all all the way up here to a highest point all the way up here and before the day ended the price came down here to the closing price so this right here is basically how you read the candlesticks uh but we have a few important uh Concepts we also need to learn about the first concept is what we call a wick or a shadow and you can see that we have these both at the top or we can have them at the top and the bottom and the Wicks and the Shadows are simply these small lines right here that are either above or below the candles and these small points show us

7:42 the highest and lowest point of the period or in other words the time frame uh last but not least we have something called the body uh this is also sometimes called the real body uh but in very simple terms the body is the wide part here of the candles and remember the wide parts of the candle determine the closing and the opening price and one last thing here I just want to mention is that these names open high low and close these points are for short called oh LC so if you ever stumble upon something called ohlc you know that this means open high low close and this is based on the candlesticks all right then so now when

8:30 we have a basic understanding of how to read candlesticks now we are ready to talk about something called bullish and bearish strength and now I want you all to focus on this image right here and the first thing I want you guys to notice about these candles is that for all of these candles the highest points are at the exact same level right and we can also notice here that for all of these candles the lowest points so the low here are also at the exact same Lev level so the only difference between all of these candles is the body of the candles right and the bodies of the candles are very very important because they are one of the most important factors they're actually one of two

9:17 factors that determines how bullish or bearish a Candlestick is so for example if we take a look at the Candlestick all the way to the to the left here we can see that the candle opens all the way down here and during the candle it pushed up to the highest point all the way up here so this basically represents a very strong movement here towards the upside but if you take a look at the candle all the way to the right here you can see that the opposite is true it open all the way up here and during the candle it pushed down all the way down here but now I want to talk about a very important thing here and that is that even if we see a Candlestick that looks for example like this candle right here this doesn't mean that the candle during the day fell in a straight line like

10:04 this it could have moved something like this remember it might have open all the way up here and then during the candle it might have moved you know something like this something like a trend here towards the downside the only thing we know for certain about this candle is that it opened here it closed here and since we have no Wicks so we have no Wicks like this and like this we also know that the highest point during the day was this point and the lowest point during the day was this point but now if you take a look at for example this Candlestick right here instead we can still see that the highest point of the candle and the lowest point of the candle is at the exact same level but this candle right here tells us a very

10:50 different story about the price because during this candle it opened right here and then we fell we fell all the way down here right but before the candle closed the Bulls manag to take control and actually reverse the price all the way up to this point so while this candle right here is very bearish and shows lots of bearish strength this candle this candle is actually much more bullish and this candle is actually almost something we call a hammer and that's actually a bullish reversal candle and we will talk more about the hammer and we will talk about a hammer trading strategy later on in this video but for now all you need to know here is

11:36 that this candle is much more bullish but now let's actually focus on this candle right here you can see in this case we have a very very small body of the candle uh but at the same time we have very long Wicks you can see we have a long upper Wick and we have a long lower Wick so during this candle perhaps the price moved something like this it started here during the candle we went all all the way up here uh during the candle we also fell all the way down here right but before the candles to close we pretty much closed here at the exact same place where the candles stick started so these kind of candles when we have very small bodies and very long Wicks these candles are actually neutral

12:23 so they don't really show any bullish or any bearish strength what they basically show us is something called indecision or in other words that neither the Bulls or the Bears are in control of the market and this specific handle is actually something we call a dogee candle and I will talk more about dogee candles and why they are so important later on in this course all right so now it's time to actually switch the attention here and take a look at something called candlestick Wick analysis and as you can see here on the screen we have two different candles but they are actually very similar if we look closely we can see that the high point here for all the candles are at

13:09 the exact same level we can also see that the candle opened at the exact same price and the candles also closed at the exact same price so the only difference between these two candles is that for the candle to the left here we had a low Point all the way down here but for the Candlestick to the right right here we had a low Point down here and this difference here between the low points are actually more important than you might think so let's actually visualize these two candles so for the candle to the right uh we can imagine that the price opened right here uh but then during the candle we can see that the price reached a point all the way all

13:55 the way down here and then it quickly pushed up all the way up to the highest point and before the candle closed we closed all the way down here uh but if you take a look at the candle to the right here we can see that it has a similar start but during the candle it went down to this point it went up to this point and then it went down so here for the Candlestick to the right you can see that the move we saw from the low to the high was much much longer compared to the move we saw here to the right you can see this move was only this far while the move to the left was much stronger and that means that this candle is actually more bullish compared to this candle because we need more bullish

14:40 strength to push the price from all the way down here up to this point compared to the strength we need to push the price from this point to this point and when you look at the chart especially as a beginner you might feel like these two candles are basically the same thing but it is these sort of small differences like the Candlestick Wick right here that can really make a difference and especially let's say that we for example have a support area right here then these type of candles when the price Wicks below and then quickly pushes above the support this becomes even more important because this tells us that we actually found buying pressure coming in at the support level which is yet another bullish sign and now let's

15:26 really quickly here take a look at another example this one is pretty similar as you can see we have the lowest point for both of these candles are at the exact same level uh we have the open here at the exact same level and we also have the close at the same level once again the difference between these two candles is that to the right we had a very long upper Wick right or upper Shadow and to the right here we have a very short uh upper shadow so now as an exercise I want you guys to drop a comment down below and tell me which of these candles are the most barish feel free to pause the video right now if you

16:11 want to well the answer here is that the candle to the left is more bearish because during this candle the price open here during the candle we pushed all the way up to this point but the bars took full control here and managed to push the price all the way down to this point while in the other candle we we had a much sort of uh weaker movement this is still a bearish movement but the price moved something like this right and you can see that this movement right here is much more bearish compared to this movement right here and once again this becomes even more important if we for example have a resistance area right here because in this case the candle to the left confirms that the resistance is

16:57 holding all right so now the time has come to take a look at one of the most important Concepts when it comes to candlesticks and Candlestick patterns and that is Candlestick momentum analysis and first of all we need to of course understand here what is momentum what does momentum mean when we talk about Candlestick patterns well in simple terms we can think about momentum as the speed or velocity of price movement or in other words we're talking about how sort of fast is the price moving compared to the previous candles so in this example you can see that the very first candle is a red one and it is a pretty strong red candle the next

17:44 candle here is you know getting a little bit weaker and we can see that because the length of the real body of the candle is getting a bit smaller if we take a look at the third candle right here we can see that the real body is even smaller here and we also have some pretty long upper and lower wigs and you know from earlier in this course that when we have small real bodies and long Wicks here this basically signals uncertainty or in other words that neither the Bulls or the bars are in control and if we take a look at this last candle right here you can see that the real body is pretty much non-existent we have a very small real body the Candlestick opens and closes at

18:30 the same level uh so this right here is a dogee candle so for this downtrend right here we can see that the momentum is decreasing and if you want a simple tip to determine the momentum of a candle I recommend to focus here on the real bodies the longer the real body the stronger the momentum in general you need to also consider the Wicks here it's also important but as a rule of thumb the longer real body we have the stronger than momentum so by looking at the real bodies here we can see that the momentum is decreasing and now I want you guys to learn a very important concept and that is something called

19:15 momentum candle and what is a momentum candle well different Traders have some different definitions when it comes to momentum candles but I like to Define momentum candles as a Candlestick that is at at least two times larger compared to the previous candles so for example if we look at these three previous candles right here we can see that the real body of the green candle right here is more than twice the size of the previous candles so that's why I consider this right here as a momentum candle and momentum candles are very important because they can provide strong signals when we trade and I will

20:02 talk more about momentum candles later on in this video but for now uh all you need to know is that momentum can be determined by the real bodies of the candle and momentum candles in general can be defined as a Candlestick that is at least two twice the size of the previous candle but preferably we want to see a candle that is you know maybe three times as large or even you know five times sometimes it can be even five times as large as the previous candles and then we are talking about a very strong momentum candle all right so at this point in the course you already have a you know pretty good understanding of how to read candlesticks you know about you know uh Wick analysis you know about momentum

20:49 and strength so now we are very soon ready to start taking a look at our Candlestick patterns and also our Candlestick pattern trading strategies uh but real quick before we look look at that we need to learn about the classification of Candlestick patterns so first of all all candisc patterns has three different classifications the first classification is called complexity and a candles pattern can be either simple or complex and a simple Candlestick pattern is a Candlestick pattern that consist of only one candle so for example uh we have been talking about earlier about dogee candles that look something like this this right here

21:34 is an example of a simple Candlestick pattern uh we also have a pattern that is called the hammer it looks something like this the hammer is another example of a simple Candlestick pattern another Candlestick pattern is the shooting star it looks something like this this is yet another example of a simple one but even for simple Candlestick patterns like right here if you just see a Candlestick pattern appearing randomly on the chart it doesn't actually mean a lot the context or in other words where on the chart the patterns appear is very important and we will talk about that later on and a complex Candlestick pattern is basically a Candlestick pattern that consists of two or more candlesticks sometimes it can be you

22:19 know even five or more candlesticks but an example of a complex pattern is the barish engulfing pattern it looks something like this the first candle here is green the second candle here is red this is an example of a bearish reversal pattern so before this pattern up here we have an uptrend this pattern indicates then that the price will reverse to the downside so all patterns that are two or more Candlestick uh are complex patterns so for example here on the image you can see that all of these Candlestick patterns are one candle patterns so these are simple patterns and you can see that all of the two Candlestick patterns like all of these all of these three plus Candlestick patterns all of these are complex but now the next uh classification is the

23:06 direction and here the direction can be either bullish bearish or neutral a bullish pattern indicates that the price will go up after the pattern a bearish pattern indicates that the price uh will go down after the pattern and a neutral pattern indicates that we don't really know here if the price will go up or down after the pattern however depending on the context of the neutral pattern these patterns can actually also tell us something about where the price will go next so for example remember that the dogee is a neutral pattern but if we have before the dogee let's say that we have a strong downtrend so this right here are red candles and then a doe pattern appears like this in this case

23:52 even though this right here is a neutral pattern it can actually indicate a reversal to the upside especially if we have some sort of support right right here we perhaps have some sort of indicator that also confirms the bullish bias the third classification we have right here is the type and here we have reversal patterns and we have continuation patterns a reversal pattern basically means that if we have a downtrend and then the pattern appears so let's say that this is a random pattern then the goal of this pattern is to reverse the price so reverse the price in the opposite direction C while a continuation pattern means that let's once again say that we have a downtrend then the pattern appears the goal of a

24:39 continuation pattern is to continue the price to the downside so for example this pattern right here is a bullish reversal pattern because it indicates a reversal to the upside and this right here is a bearish continuation pattern right because it indicates a continuation of the trend to the downside and we also of course have bearish reversal patterns and we also have bullish continuation patterns so we basically have four different combinations all right so now we are finally ready to start taking a look at Candlestick patterns and let's actually begin here by taking a look at the best reversal Candlestick patterns and first of all what is a reversal

25:25 pattern well reversal patterns indicates a trend shift so either from bullish to bearish or from bearish to bullish so it can reverse the price from down to up or from up to down and reversal patterns can be either simple or complex and as you know simple patterns consist of one Candlestick complex pattern consist of two or more and here and this is super important the context for the patterns is very very important or in other words where on the chart the patterns appear is crucial when it comes to reversal patterns so with this three rules in mind now we are ready to take a look at

26:11 our first pattern so the very first pattern we're going to take a look at is called the bullish engulfing pattern and as you can see here on the bottom and I will do this for every single pattern I list the complexity the direction and the type and in this case it's a complex pattern because it consists of more than one candle it's a bullish pattern because it indicates a move towards the upside and it's a reversal because it reverses the price from a downtrend to an uptrend so now then how do we identify a bullish engulfing pattern well step one here is that we need to see a downtrend and after the downtrend these two candles appear I hope you can see here that the candles before the pattern uh has a slightly different

26:58 color and also the candle here here after the pattern has a slightly different color and I will do this for all patterns but the actual patterns are these two candles right here the first candle in this pattern is a red one and preferably we want the real body of the red one to be relatively small it doesn't have to be super small but it's often a good sign when we have a small real body as for the wigs here it doesn't matter too much these wigs can be longer or shorter it will not have a big big impact on the pattern the next candle of the pattern here is more important it's this green candle right here and in order to find a bullish engulfing we want the next candle to be

27:43 a green one and it needs to open below the close of the red one so it needs to open below this point right here and the green candle needs to close above the open of the red candle and this is why it's called an engulfing pattern because the green candle is larger and engulfes the previous red candle if you're trading for example crypto where the closing and the open prices are at the same level it's enough to see a pattern that looks something like this let's say that this is the first red candle right here and this right here is the second candle in crypto and some other markets the next candle will open at the same place as where the previous candle closed so in these scenarios what you are looking out for to confirm bullish

28:30 engulfing is simply to see a Candlestick that closes above the previous red one when the green candle closes then the pattern is confirmed and as I said the pattern indicates a reversal to the upside now let's take a look at the bullish engulfing pattern and how to trade it in a real Market all right so right here we have a chart and remember it doesn't really matter what time frame this chart is I think in this case it's a daily chart but you can use Candlestick patterns on any time frame and if you want to you can try to find the bullish engulfing pattern on your own so feel free to pause the video right now did you find the pattern well the bullish engulfing pattern at least the most obvious pattern is this one right here you can see that before the

29:16 pattern appeared we had a strong movement to the downside we actually saw a little bounce but then we saw yet another push towards the downside the first candle is a small red one and the next candle the green candle oh opens below right and closes above the previous red candle the most common entry point is to enter when the candle closes so at the candle close of this green candle but where do we set our stop- loss well the most common level here is to set the stop loss just below the lowest point of the pattern so in this case the lowest point comes from this Wick right here but if the red candle has a lower Wick we usually set the stop loss below that Wick another

30:02 important point to consider when you place your stop-loss is previous Market structure and what do I mean by this well in this case you can actually see that we had a low right here as well and you can pretty much see that we have a sort of double bottom looking structure here and when we have another low at the around same level what I like to do is to actually place the stop loss below the sort of support created by that level so this case you can see that these two lows are pretty much at the same level but if one low is slightly lower I like to place the stop loss below so in this case I would set the stop loss around here uh as you also can see I usually leave some wiggle room right here so if the price you know

30:49 comes down to the support once again we have some room for the price to bounce here before we get stopped out but what about your target level well here you can keep it simple and use a risk to reward ratio a risk to reward ratio tells us how much do we gain compared to how much we lose when we take the trade so for example a risk reward ratio of 1 to2 means that we risk $1 for every $2 in profit or in other words the distance here from the stop loss to our entry point should be half the length of the distance up to to the profit Target so in this case our profit Target would be

31:34 around here now let's switch the attention here and take a look at the bearish engulfing pattern once again the bearish engulfing pattern is a complex pattern because it consists of two candlesticks uh the direction here is bearish because the goal of the pattern is to push the price down and this is yet again A reversal pattern so in this case before the pattern appears we need to see an uptrend then we see a green candle appearing here with a relatively small real body uh but in this case you can see that they actually chose to put the Wicks here you can see we have a wick all the way up here and a wick all the way down here the important thing about the first candle is that the real body is small and even more importantly what we want to see for the beish

32:20 engulfing is that the red candle opens above the body of the green candle and closes below the body of the green candle so in this case even though the Wicks are above and below the real body of the red candle this is still a bearish Eng engulfing pattern and when the candle closes the pattern is confirmed and it indicates a reversal to the downside so now let's take a look at the barish engulfing trading strategy once again feel free to try to identify the pattern on your own in this case the pattern is pretty clearly visible on the chart so hopefully you can identify the pattern patter did you find it Well the bearish engulfing pattern is this one right here you can see that before the

33:07 pattern appeared we had a strong move to the upside then we saw a small green candle and especially the candle had a small real body we had a pretty long lower Wick but the real body is small then the next massive candle came in here and opened far above the previous green candle and closed Far Below so this right here is a very clear bearish engulfing in this case however we did not have any resistance level so the optimal scenario is let's say that the high were all the way up here and perhaps we had a resistance uh like this this would be the optimal scenario the bearish engulfing pattern is more significant when it happens at a resistance level but you can still use

33:54 the pattern on its own you can for example combine the pattern with other technical variables like indicators and Market structure but okay so what about the entry point well once again the most common entry for the barish Eng engulfing pattern is to enter at the candle close of the red candle the stop- loss we usually place above the highest point of the pattern and in this case we can see that the highest point is right here once again you can see that I leave uh some space here for some wiggle room and as I said remember to keep other Market structure in mind so for example if we have a resistance all the way up here you might want to set your stop- loss above that resistance as for your Target level to keep it simple we usually use a risk reward ratio a common

34:40 risk a very common risk reward ratio is to use a 2 to one so we measure this length right here and our Target length should be twice as long uh from the entry so in this case our Target would be right around here another interesting thing to notice about this chart is let's actually take a look at this pattern right here well here we actually have a bullish engulfing because the first candle is a red one the second candle is a green one that opens below right opens below the body and closes above the body of the previous red candle and we can actually see that this bullish engulfing pattern marked the low of this down move and it actually reversed the price here to the upside all right so now the time has come to

35:26 take a look at one of my personal favorite patterns and this right here is the hammer pattern this pattern is a simple pattern because it consists of only one Candlestick the direction here is bullish and the type is reversal so to identify a hammer pattern what we first need to see remember it's a reversal pattern so before the hammer appears we need to see a move towards the downside then the actual Hammer appears and that is this candle right here to find a valid Hammer pattern what we're looking out for is that we're looking out for a small real body like right here and we're looking out for a long lower Wick and specifically what we want to see here is that the wick the

36:13 lower Wick of the pattern should be at least twice the size of the real body and preferably it should be you know maybe three times or even four times as large as the real body you can see in this case the wick is maybe three times as large so this right here is a good Hammer another thing about the hammer is that we want the upper Wick right here to be preferably very small or the best case scenario here is when we have pretty much no Wick at all so if we have a pattern that looks you know like this uh and we have no Wick uh this right here is a perfect hammer and another thing that might sound a bit counterintuitive is that the color of

36:59 the pattern can actually be either green or red so it doesn't have to be a green real body it can be red and still be a valid Hammer so hammer can look something like this with a red real body however if we you know have to choose between these patterns the green Hammer is more bullish and is a stronger signal so preferably we want to see a green candle and once again when the candle closes the pattern is confirmed and and it indicates a reversal to the upside so now then let's take a look at the hammer pattern trading strategy and here on the chart we actually have three uh valid Hammer patterns so once again if you want to pause the video and try to

37:46 identify the patterns all right so the first Hammer we can identify is this candle right here you can see this green candle that has a pretty small real body and a long lower Wick and the important part about this candle is that you can clearly see that the wick here is more than twice the size compared to the real body and here you can also see that before the hammer appeared we actually saw a massive massive drop towards the downside so when we see a very strong movement before the hammer appears it can actually make the hammer even stronger this right here is a very strong reversal signal but what about the other hammers well right here we actually have another Hammer this one is

38:32 a bit more you know debatable if this is a hammer or not but what you can see first of all is that we we do have a small real body and you can also see that the lower Wick of this pattern is clearly more than twice the size of the real body but what makes this pattern a bit shaky here or you know some people might not consider this a hammer and that is because the upper Wick here is pretty pretty long but in my opinion I would I would probably still consider this a hammer because the lower Wick is so much longer compared to the upper week so this could still be considered a hammer and what we also can notice is that before the hammer appeared we saw a strong move towards the downside and that is a good sign another candle that

39:19 you might consider a hammer is this candle right here you can see once again we have a very small real body and we have a long lower Wick but in this case I would actually not consider this a hammer and that is because we are actually in a move towards the upside yes we have a small move here before the hammer appears uh but this is not really enough for me to consider this a reversal pattern preferably before before the pattern appears we want to see a clear move here towards the downside but the last valid Hammer pattern here in my opinion is this one right here once again you can see we have a very small real body we have a very tiny upper Wick right and we have a very long lower Wick the body is red but

40:05 remember that doesn't matter this is still a valid Hammer so in this case what about the entry point the exit point and our Target level well once again and this is common for many patterns the most common way to enter is to enter at the candle close here of the pattern and remember this is a red body so we enter at the lowest point of the body that is when the candle closes but what about the stop loss well in this case you can actually see that we have some sort of support because we have a low right here we have another low right here and we have another low right here so what we can do here is that we can drag a sort of support area I prefer to draw areas rather than uh rather than sort of lines in this case we can draw a

40:52 pretty broad support area right here and in this case I think it makes sense here to place the stop loss below the support area and I also leave some wiggle room so I leave some wiggle room here between the support and the entry point just like this and as for our Target level once again we can keep it simple with a 2 to1 risk to reward we measure this part our Target level should be around twice the length of this part right here and that would give us a Target around here once again when it comes to Target levels we can also use support and resistance levels so in this case we can see that we have some sort of resistance resistance resistance so here we have some sort of resistance area right here

41:38 so it it can make sense when you have a resistance area like this to actually Place The Target just below oops uh wrong tool here just below the resistance so in this case you can actually you know adjust your support your so in this case you can actually adjust your target a bit here to take targets before the resistance appears because when we reach a resistance it's pretty common that the price will reverse in this case you can actually see that we did get a pretty strong reaction of this resistance area it went a tiny bit higher here but definitely keep support and resistance levels in mind all right so now let's take a look at the shooting star pattern this is one of my favorite bearish patterns so make sure to really pay attention to this one

42:25 once again this is a simple pattern because the pattern consists of one can stick the direction is bearish and the type is a reversal and because this is a bearish reversal that means that before the pattern appears we want to see an uptrend then this right here is the actual pattern and after the pattern the goal is to reverse the price to the downside to identify a shooting star pattern we want to look out for a small real body and a long upper Weck what we also want to see is that we want the lower Wick to be either non-existent or to be very small like we're seeing right here and here and this is very important the upper Wick of the shooting star just

43:12 as the hammer we want this this one to be at least twice the size or preferably even longer compared to the real body here and in this case we can see that the upper Wick is just barely twice the size as the previous candle so if if this week was a little bit shorter so if we had a pattern that look something like this instead where the upper week is you know maybe like this now we are not really seeing a shooting star anymore so when you're looking out for shooting stars definitely pay close attention to the upper Wick of the pattern all right so now then how do we trade the shooting star well in this case the shooting star can actually be pretty hard to spot but the most valid

43:58 shooting star right here in my opinion is actually this green candle right here and I actually forgot to mention this but for the shooting star it doesn't matter if the body is green or red it's still a valid shooting star however a red candle is a bit more bearish but the important part here is that we have a small real body and a long lower Wick in this case you can see that the wick is just barely twice the size of the real body and what we also can see is that before the pattern appeared we had a clear move towards the upside as for your entry level once again we enter here at the candle close of the pattern and because this is a green body we enter at the top of the real body um

44:44 your stoploss level here once again we want to look out for previous Market structure you can see that we actually have a high right here so we can drag a resistance like this in this case we can actually see that the shooting star us quickly peaked above the resistance and then reversed this is actually a special type of pattern that we call a wof up thrust and these can be very strong reversal signals and by the way guys if you want to learn more about support and resistance and how to combine support and resistance with other technical tools to create a trading strategy I highly recommend to watch my support and resistance trading course here on the channel I will make sure to link that video up in the corner in the eye so now then where we place our stop- loss well

45:30 because the highest point of the shooting star is above the resistance we actually want to place the stop loss used slightly above that point once again I leave a tiny bit of wiggle room between the highest point of the shooting star and the stop loss and as for our Target level we keep it simple with a 2 to one for this pattern as well so we measure this move right here and we take a 2 to one so the target should be twice the size and we lock in our profits around here in this case we can see that the price actually continued further down but that is no guarantee so it's very important to plan out your trade set your you know stop loss and set your Target and stick to your plan another interesting thing you can notice about this chart is that we pretty much

46:16 had a shooting star pattern appearing right here right you can see we had a small real body we had a long upper week but what makes this pattern a bit you know shaky is that yet this we saw a move towards the upside right here but before the shooting star appeared we had more of a sideways movement a more value pattern in my opinion would have been this candle right here but in this case you can see that if you traded this pattern you would have entered right here and you would have probably set your stop loss right here so in this case this would have been a losing trade and that is a very important point to consider not all patterns will be successful some patterns will fail and then it's very important to respect your stop- loss and exit the trade without

47:03 any hesitation another important thing to remember here is that when we use a risk reward ratio of 1 to2 this means that we can actually lose more trades than what we win and still make money so losing trades doesn't have to be a bad thing it's simply a part of the game all right so now it's time for a very iconic and pretty complex reversal pattern and this is the Morning Star pattern this pattern right here is indeed complex and it's a bullish reversal pattern so before the pattern appears we want to see a downtrend then the actual pattern appears here and as you can see this pattern consists of three candlesticks and the goal of this pattern is to reverse the price to the upside so how

47:49 do we identify the Morning Star well the first Candlestick of the Morning Star is a pretty strong red candle and it's a continuation of of the previous move towards the downside the next candle is a green Candlestick with a small real body and the wick here can be either small or long but here and this is very important between the candle close of the red candle and the opening of the green candle so in this space right here we actually want to see a Gap a gap is when we either have distance between the body of the candle or another gap which is called a wick Gap is when we actually

48:35 have distance between the Wicks of the candles as well and I will talk more about that later on in this video we actually have some patterns where we need to see uh Wick gaps but in this case all you need to see is that we want to see a gap between the bodies of the candles and the third and the final candle of the pattern is a strong green candle and here we once again want to see a gap between the small green candle and the large green candle so we want to see a gap between the real bodies of these two candles yet another thing we want to see with the green candle is that preferably we want the green candle to close well within the real body of the red candle and a rule you can use if

49:22 this right here is 50% or in other words it's in the middle of the red candle we want the green candle to close above this Mark right here and when the green candle closes above the 50% Mark the Morning Star pattern is confirmed all right so now let's take a look at the Morning Star Trading strategy and The Morning Star can be identified right here and this one can be a little bit tricky to spot here but let's take a look at this pattern together so the first candle is a strong red candle that clearly comes after a downtrend a very strong movement here towards the downside the second candle of this pattern has first of all it has a very

50:09 small uh real body that is a good sign and you can see here that we actually have a pretty long lower week so what pattern is this pretty much well it's actually pretty much a hammer pattern so you can actually find a hammer pattern inside a Morning Star pattern and it's a bit hard to see here but we actually created some space SP between the real body of the first candle and the second candle between candle 2 and candle 3 here we have a much clearer Gap here you can see we clearly have a gap between the red candle and the green one and what you also can notice here is that the green candle closes above the candle close here is above the 50% Mark of the first red candle so as for our entry point the most common way to enter is to

50:56 enter at the candle close of the shooting star so to enter right there in this case when we have a hammer pattern you could have actually entered all the way down here on the Hammer as well but in this example we are showing off the Morning Star so let's stick with entry example number one let's take a look at our stop- loss here we don't really have any clear support level and when we don't have any clear support we usually place the stop here below the lowest point of the pattern so we place it below this point right here we also leave some wiggle room space between the low and the the and the stop loss so if the price falls down here we can actually retest the the hammer pattern

51:42 and still you know not get stopped out as for your Target level we can keep it simple and use a 2 to one this would give us a Target around here or we can actually use previous Market structure so in this case you can see that we have a pretty clear resistance all the way up here you can see we have One Touch two touches so it's actually possible to set your target just below that resistance I'm not really sure here but if I remember correctly I do think that we saw a move towards the upside and then down and then this target eventually got reached all right so now let's take a look at the evening star pattern the evening star is a complex pattern because it consists of three candlesticks the direction is bearish and this is once again A reversal pattern so before the pattern appears we

52:28 have an uptrend then the actual pattern is this one right here consisting of three candles and the goal of the pattern is to reverse the price to the downside the first candle of this pattern is a strong green one so we want to see a long body here and we can also see some Wicks the important part about the first candle is that we have a long green body the next candle is a candle with a small real body so in this case you can see that we have a very small real body here uh we can also have uh both both lower and upper Wicks this is not super important the most important part here is that we have a small real body we can even have a canos sticks that looks something like this where the real body is so small that you can't even see it anymore this right here is a

53:14 doe candle and we will talk more about dogee candles and why they are so important later on in this video and also this candle can be either green or red but one could consider the pattern a bit more bearish if we see a red candle between the body of the first candle and the second candle and this is very important we need to see a gap so between this point and this point we want to see a gap here between the real bodies the third candle here is a strong red candle and once again between the real body of candle 2 and the real body of candle 3 we want to see a gap like this and to confirm that the third candle is strong and to confirm the pattern we want the red Candlestick or

54:03 candle 3 to close below this point right here and in this particular example you can see that the red candle closed far below the 50% Mark and this confirms the evening star pattern all right then so how do we actually trade the evening star well the first thing we need to do is of course to identify the pattern so if you want to try to do this yourself and pause the video did you manage to find the pattern well the evening star is this pattern right here you can see that the first candle is a strong green one that comes after a move towards the upside the second candle right here has a small real body in this case the real body was green but remember the body can be either green or red and this pattern

54:48 on its own is actually something we call a hanging man pattern and we will cover that pattern later on in this course but for now all we need to notice is that we do have a small pattern and also very importantly we do have a gap here between the real body of the green one and the real body of the first candle so you can see we have a pretty clear Gap right here the third candle is a strong bearish candle that's exactly what we want to see and even though it's tiny we can see that we do have a gap here between candle 2 and candle 3 and also the red candle closes below the 50% Mark of candle one so you can see that the candle close is clearly below that point so we have all our criteria and this pattern is confirmed as for your entry

55:36 point we usually enter here at the candle close of the third candle and for the stop loss once again we don't really have any clear support and resistance here so our stop loss we want to place above this point so we place it above we leave some wiggle room right here and we use a risk to reward ratio uh we can use for example a 2 to one could also use a 3:1 a 3:1 risk reward simply means that the reward uh the length down to the Target so the length down to this point right here should be three times as long as this length right here all right so now the time has come to take a look at the piercing pattern and the piercing pattern is yet another Super useful uh reversal pattern and this pattern is

56:23 complex because it consists of two candlesticks the direction here is bull and as I said the type here is reversal so before the pattern appears we need to see a downtrend then these two candles right here are the actual pattern and the goal of the pattern is to reverse the price to the upside the first Candlestick of this pattern is a red one preferably a pretty strong red candle but it can be either strong or sort of medium strength and the red candle is a continuation of the previous move to the downside the next Candlestick is a strong green candle it can have a upper Wick and a lower Wick but the most important thing about this green candle

57:09 is that we need to close above remember just as with the morning and evening star we have this 50% line from the red candle and this line goes from the middle of the previous red candle and what we want to see in order to confirm the piercing pattern is that we want the green candle to close above this line when we see the candle close the pattern is confirmed and indicates the reversal to the upside what I also forgot to mention here is that the red previous candle can also have a upper and a lower Wick so now let's take a look at the piercing pattern trading strategy and as always you can as an exercise try to find the pattern here on your own but the piercing pattern can be found right

57:56 here you can see that before the pattern appeared we had a pretty significant move here towards the downside candle one here is a strong red candle we have a slight upper Wick and lower Wick but that's okay the next candle here is a strong green candle you can see that we do have a very long lower week and we do have a very long upper week but that's completely fine because remember the most important part about this pattern is that the green candle needs to close up Above This 50% line we have right here and you can see that the candle close was quite far above the 50% line so when this candle closes the pattern is confirmed another important thing to

58:41 notice about the piercing pattern is that this is pretty much a early stage of a bullish engulfing because if the piercing pattern pushes a bit higher here and closes above the opening of the red candle then we actually have a bullish engulfing pattern instead so this is pretty much an early sort of bullish engulfing pattern but now let's take a look at where do we enter where do we set our stop loss and where do we place our Target well the most common entry point is as usual at the candle close so we enter here when the pattern confirms as for our stop-loss we usually look at the very lowest point of the pattern and in this case remember we have a very sort of long lower Weck so what we usually do is that we actually

59:29 set the stop loss all the way down here all the way below the lower week and I also like as you know by now I like to leave some wiggle room here this allows us for the pattern to go down and test the low once again and then bounce and we will still not get stopped out and as always you also want to look out for the previous Market structure in this case you can see we have a low right here uh and we have a lower low uh in this case uh we don't have an indicator right now but just by looking at the price I can actually sense a sort of Divergence right here if you want to learn more about divergences to improve your Candlestick pattern trading even more I actually have a full course about the

1:00:14 RSI indicator that I highly recommend watching I will make sure to leave a link to that video somewhere up in the corner but now then what about the target well our usual method here is to measure the length between the entry and the stop stop loss and we use a risk reward ratio a risk reward ratio of two would give us a target maybe somewhere around here so this is where our Target is and where we lock in profit all right so now we're going to take a look at the dark cloud cover this right here is an important bearish pattern that every Trader needs to know about this pattern is complex because it consists of two candles the direction is bearish and the type is reversal so before the pattern we want to see an uptrend these two

1:01:01 candles right here are the actual pattern and the goal of this pattern is to reverse the price down the first candle of this pattern is this candle right here and this is a pretty strong green candle it can be either very strong or medium size it doesn't matter here if we have an upper Wick and a lower Wick the most important part here is that we have a clear continuation of the uptrend the next candle candle two is a strong bearish candle and in this example you can see that we have no upper week and this is completely fine but we have a pretty long lower week and that's also completely fine the Wicks of this pattern are not the most important part the most important part is that the

1:01:48 red candle needs to close below this 50% Mark of the green candle so once again the 50% Mark is drawn from the middle of the body of the green candle and what we're looking out for here is that we are looking out for a candle close below this line when we see a candle close below the 50% line the pattern is confirmed and indicates a reversal so now then let's take a look at the dark cloud cover trading strategy and the first thing we need to do is that we need to identify the pattern and the dark cloud cover can actually be found right here and this right here is pretty much a special case of the dark cloud cover because the second candle here is you know a massive massive candle and as

1:02:35 you can see first of all we had a very clear move towards the upside before the pattern appears and the first candle here is a pretty strong green one and importantly it's a continuation of the uptrend in this particular case we have no upper Wick and we have no lower Wick but that's completely fine the second candle in this case was a massive massive bearish candle and the very interesting thing about this candle is that during the candle the price pushed all the way up here but before the candle closed the bars managed to push the price all the way down here and even more importantly the bars managed to push the price and close below the 50% Mark of the previous green candle so

1:03:20 this actually confirms that we have a dark cloud cover and even though we have such a large candle and such a large large upper lower week this is still a dark cloud cover but now then how do we trade a dark cloud cover with you know such a big bearish candle well the first step is to find our entry point here and once again the most common entry is to enter here at the candle close of this pattern but as for the stop- loss here it gets a bit more tricky we still have the most common stop- loss that is you know if we take a look at the absolute highest point of the pattern as you guys know from previous patterns the most common way to set your stop- loss is to set your stop- loss just above this point but now since the highest week is

1:04:08 so high up some Traders highly prefer to to not have such a wide stop loss so when you see a a large second candle like we're seeing right here another method to set your stop- loss is to actually place it above the candle close of the pattern so some Traders might prefer for this stop loss you can see we set the stop loss just above the uh real body of the pattern and as always we also leave some wiggle room so here you have two uh pretty valid options for your stop- loss you have the higher stop loss and you have the lower stop- loss and what stop loss you decide to choose here basically depends on your own trading style if we choose the lower

1:04:53 stop loss then our Target level using a 2 to one would probably take us down around here so this right here is Target Target one but if you're using the wider stop loss and still aim to get a 2 to1 risk reward ratio you also of course have to increase the target so in this case your target level might be all the way down here all right so the next pattern we're going to take a look at is the inverted Hammer pattern and this pattern is you know very important to understand because it can be quite uh counterintuitive because this right here is a simple bullish pattern and it is a reversal pattern but many uh especially new Traders look at this pattern and say

1:05:40 isn't this a bearish pattern well it's actually considered a bullish pattern and we will talk about why this is considered a bullish pattern very soon but first how do we identify the pattern well since this is a bullish reversal before the pattern we need to see a downtrend and in this case the context this very important so it is important that we have a down move before the pattern then the actual pattern appears and the goal of the pattern is to quickly push the price towards the upside the pattern itself consists of one single candle with a very small real body and a long upper Wick and here just as with the hammer pattern we want the wick to be at least twice the size

1:06:26 compared to the real body and in this case you can see that the wick is maybe you know four times as large as the real body so that is a very good sign but now you may of course wonder why is this even a bullish pattern because if you remember from earlier in the video when we talk about talked about the shooting star you can actually see that this right here is the same candle as the shooting star because as you can see the candle open all the way down here during the candle the Bulls started off good they managed to push the price all the way up here but before the candle closed the bars took control once again and pushed the price all the way down to this point right here but the reason this is still considered a bullish

1:07:12 pattern is because of the context because before the pattern appeared we had a clear move towards the downside and because the Bulls during the next candle managed to push the price all the way up here this gives us an indication that the back s from the downtrend might be losing control so if you see this pattern appear after a downtrend it's a bullish pattern but if you see the pattern appear after an uptrend it's a bearish pattern so the context is very important but when this candle closes the candle is confirmed and indicates a reversal to the upside when trading the inverted Hammer many Traders will actually wait for a confirmation candle and what is a confirmation candle well

1:07:57 in this case this right here is a confirmation candle it's a candle that appears after the pattern that confirms the direction we want to see and in this case we want to see a move towards the upside and we can see here that the next candle confirmed this move so some Traders will wait for this next candle close before they enter their trade and in my opinion waiting for a confirmation

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