The Ultimate Candlestick Patterns Trading Course (For Beginners)

0:00 hey hey what's up my friends so welcome to the ultimate Candlestick patterns trading course right so who is this course for this course is for you if you're a Forex Trader you're a stock Trader or even a cryptocurrency Trader because the examples the strategies the techniques the principles so it can be applied to these markets and also it doesn't matter whether you're a day trader a four hour time frame Trader a daily time frame Trader because again all this can be applied to the different time frames as well so this is a very comprehensive trading course I will put the timestamps uh somewhere on the screen so you can see which are the different sections and which are the timestamps right for each section also put it in the description right so you can refer to it easily and then hop around the trading course right if you wish to but my suggestion is that if you're new to trading I recommend you watch it from start to finish because the concepts right are built upon right

0:46 one section on top of the other and by the end of this course my outcome that I hope for you is number one to be able to better time your entries and exits using Candlestick patterns number two to help you identify when the train is about to reverse so you don't get caught on the wrong side of the move and also be able to predict Market turning points and finally to equip you with a trading strategy so you can be able to profit in pool and bear markets sounds good then smash the thumbs up button and let's get started when it comes to Candlestick patterns right you will likely see one of two colors number one is what we call a green candle a bullish candle and the thing about Candlestick patterns is that every single Candlestick pattern has four data points the opening price the

1:32 closing price the high of the day and this is the low of the day so let's say for example you see this Candlestick on a daily time frame what does it mean very simple this means right that over here at this point is the opening price of the day this is the price where the market opened it and this over here is the closing price of the day this tells you that let's say the market closes at 5 pm at 5 PM this over here at this point is the closing price of the day now what about this this is the high this is the high of the day meaning during the day right what is the highest price point that the market went so it's actually signified by this line over here we call it the high of the day some people call it the upper week the upper Shadow that's fine as well and then over here clearly this will be the low of the

2:17 day the lowest price point that the market went during the day so on the other hand if you see a red candle again it has four data points but where it is different is that the opening price now is above the closing price whereas you look earlier for a green candle a bullish candle the opening price is below the closing price okay so again here same thing this is the high of the day if you are looking this on the daily time frame this is the opening price of the day for a bearish candle this is the closing price for the day for a bearish candle and then this is the low of the day now what if you don't see this on a daily timer what if you look at this chart or Candlestick pattern on the one hour time frame how do you interpret this again same thing if you see this on a one hour time frame so let's say for example let's refer to the bare candle let's say the market opened here at 12

3:03 p.m okay then this means you're at this closing price if you look at this on a one hour candle this candle will be formed right at 1 pm okay this means that at 1 pm this candle will kind of like be uh be form and printed on your chart okay and then the next candle will sort of let's say open somewhere here and then this thing Scandal will start to move up and down and when the hour is up then the candle kind of like be finalized right so if you are looking at this on an hourly time frame or the 15 minutes time frame this is what it means right so again just a quick recap if you look at this let's say one last time on the let's say the 15 minutes time frame let's say the market open here at 12 15 PM okay what this means is that at the closing price at 12 30 PM the candle will close it will be fixed and printed on the chart and then the next candle

3:49 will be open right and start you know moving up and down so let's do a quick recap before we dive into the more advanced stuff first thing a Candlestick pattern has four data points the Open high low and close a bull candle this is where the clothes is above the opening price and for a bear candle this is where the clothes is below the opening price now that you've learned the basics of a Candlestick pattern in the next section I want to teach you nine powerful Candlestick patterns that every Trader must know the first Candlestick pattern that you are going to learn right now is what we call a hammer okay so what is the meaning of a hammer so just a quick one right this is the opening price of a hammer so if you look at this again on the daily time frame this is the opening price of the day this over here is the lowest price point that the market has

4:35 went during the day this is the highest price point the market has actually reached right during the day and finally the market closed at this price point during the day so what does a hammer mean what does it signify so let me explain so again if you look at this on a daily time frame this tells you that when the market opened the sellers quickly took control and pushed the price lower down this extreme lows of the day so during this point of Maximum pessimism right the the sellers they were in control driving the price down you know really low and then the buyers they will push to a corner right react at the wall right at their back so suddenly they found the strength maybe they took you know some steroids they they don't gain control of their their strength and muscles and they push the price up higher okay and eventually closing near the highs of the day so you can see that during the early part of

5:21 the day the sellers were in control driving the price down lower but eventually right the buyers stepped in and pushed the price up higher finally closing near the highest of the day so this tells you that the buyers they are temporarily in control right so this is what this Candlestick pattern means so it's a bullish uh reversal pattern so for those of you who watch Avengers endgame right you know that you know towards the end Captain America is left alone right facing Thanos Army okay and at the point in time is the point of Maximum pessimism you think now man that guys you know his his date right how is he going to find the Army and then and then what happens you know his friend I think Sam you know the Birdman came in the portal opened uh Black Panther showed up forever all right and then when the war ensues and the good guy win right so you can see the story is similar the point of Maximum pessimism

6:07 right and then the reversal where the good guys overcome Thanos Army so this Candlestick pattern kind of like just reminds me of that story so if you look at the chart right it will typically look something like this this over here again is the hammer you can see that over here this reversal the price open at this price point then it went down to the extreme lows over here bias to to control okay and then finally closing near the highs of the date and the market did you know had a slight brief rarely above here and of course we don't just trade Hammer Candlestick pattern in isolation we take into account other factors like you know support Market structure Etc I'll cover all those stuff later on but for now I just want you to get familiarized right with this particular Candlestick pattern now on the other hand right shooting star this is kind of like kind of like the inverse of a hammer Candlestick pattern so I'll just go a

6:54 little bit quickly for shooting star this is the opening price this is the close of the day this is the lowest price point of the day and then it's the highest price point of the day so this one you can see that the story behind a shooting star is just the opposite this is where during the early part of the day right when the market opened the buyers took control and pushed the price up higher near the highs of the day and then the sellers right say uh that's as far as you're going to go my friend and then they push the price down lower driving it down near this lows of the day so I do apologize for my wavy lines I didn't really want that to happen but you just somehow just go Zoom like that okay so yeah anyway this tells you that the the sellers right are temporarily in control because at the start of the day the buyers tried to push the price up high but it got overwhelmed by the strong selling pressure who then drive

7:41 the price down lower closing near the lowest of the day so this kind of reminds me right where you didn't study for an exam and you go for an exam and and what happened is that you go back the report card man you got an A A despite not starting for the exam and then it's only you kind of realize oh it's actually A4 absent then your whole world come crashing down again right so yeah same same over here for this shooting star pattern so if you look at the chart typically it looks something like this on the chart you can see over here the price open at this price point initially the buyers were in control pushing the price near the highs of the day and then the sellers took control and pushed the price down lower closing near the lows of the day over here next we have what we call the bullish engulfing pattern and by the way if I have not talked about this thing over here this is what we actually call a body so from this over here to this

8:27 right basically the colored portion of the candle is what we call the body okay so for from here to here we call this the body and then we have things like you know uh Shadow Tails let's keep things consistent right let's call this the uh Shadow right so basically from here to here is what we call the upper Shadow right you know Ninja Turtles right Shredder in the shadows yeah or turtles in the shadows yeah so this over here right is what we call the lower Shadow right so we have body and the shadow body is the the one that is colored right Shadow is the kind of like just the the Candlestick you know the shadow that line is sticking up so now what about the bullish engulfing pattern what does this Candlestick pattern means so earlier you've learned the hammer and

9:13 the shooting star pattern those are individual uh reversal Candlestick pattern One reverse one candle formation but for this one over here you see there's two candle formation if this one is the first candle this is the second candle so for the first candle you can see the opening price is here and the sellers to control and drive the price down lower closing near the lows of the day that's what happened on the first day second day what happens that the market opened at this price point and the buyers pushed the price up higher closing near the highs of the day so there's this sudden turn of events right where the sellers on the first day they thought they've won the battle but only to see the next day the buyers step in and push the price of higher closing near the highs of the day so this is what we call a bullish engulfing pattern why is this what does the word engulf mean so engulf means basically to cover

9:58 to wrap around so you can see that the engulfing pattern the body of this second candle has engulfed the body of this first candle so this is the body of the first candle from here to here okay and then the body of the second candle from here all the way up to here has engulfed the body of the first candle so this is what we call a bullish engulfing pattern wrap around bullish engulfing pattern and another thing to add is that if you so buy right right so if you read most textbook and courses right by right the definition of a bullish engulfing pattern is that the opening price of the second candle right it has to have a gap right from the low of the first candle so buy right let me just show you what I mean so most textbooks where you'll see is that this is the low of the first candle

10:44 right so by right the opening price next day has to be somewhere about here okay and then the market eventually you know push up higher and then let's say close near the highs of the day over here so you can see that the opening price is actually here and this is the lows of the first day so you can see from here to the opening price there's what we call a gap Gap okay okay so this is [Music] definition of a bullish engulfing pattern but you can see that the example that I give you there is no Gap I simply just left the open right at the same at the same price as the previous day closing price why did I do that and the reason is simple is because if you trade the Forex Market you trade the crypto markets is traded almost 24 hours a day you won't see gaps on your chart rarely right so this is why I remove the get

11:31 portion right to kind of like make this more uh relatable for people who trade the crypto markets or the Forex markets right but if you trade the stock markets don't be surprised right where you see a bullish engulfing pattern the opening price isn't here but it could actually be slightly below the previous day low over here it can actually open over here right and then finally push up higher and then closing near the highs of the day so this is actually a pretty common in the stock markets but for the Forex and the crypto not quite as much so just something to to share with you and if you look at the chart the bullish engulfing pattern right looks something like this first candle is a down day market closed near the lows of the day and the second day the candle right close higher for the day closing near the highs of the day and it has actually engulfed right the body of the first candle look at this first candle and then this is the second candle right yes angle of the body of

12:18 the first candle so this is what we call a bullish engulfing pattern it means that the buyers they are temporarily in control and in this case he did you know went up a little bit higher so the inverse is true right so this is what we call a bearish engulfing pattern so the first candle is green okay and then you can see that the buyers they are in control closing near the highs of the day and then the next candle at this opening price the seller Drive the price down lower closing near the lows of the day this is what we call a bearish engulfing pattern and it looks something like this on the chart okay so you can see the price over here buyers to control and drive in into this area of resistance and then what happened next is that we have a bearish engulfing pattern over here where this body of this candle has anger of the body of the first candle closing near the lows of the day and then what we have is like a decline down lower so once again right

13:05 we don't trade bearish engulfing pattern in isolation we have to take into account the context of the market so don't really don't explain to you the strategy the entries the exits examples and much more and by the way if you're enjoying this training so far smash the Thumbs Up Button if not hit subscribe so moving on the next Candlestick pattern is what we call a doe G okay so this again is the high of the day this is the low of the day and then this is over here is the opening price of the day so now quiz time as I've said earlier right every Candlestick pattern has four data points the Open high low and close but in this case I've only showed you shown you the Open high and look where is the close take five seconds to think about this one two three four five okay the answer is this this over here is the close of

13:50 the day so a doji simply means that the opening price and the closing price they are the same price point so yeah we still have four data points just at the opening and the closing price is at the same price so let's say they close it the opening price is at two dollars the closing price is also at two dollars so this way there is no body on this uh particular Candlestick pattern so what does a doji mean so again very simple all right this is the opening price it tells you that uh early part of the day the buyers to control push the price up higher near the highs of this day and then the seller suddenly reverse the market down lower taking control to these lows of the day so this is the lows this is the highest and then eventually the buyers found the string once again to push the price up higher and finally they close pretty much where they open for the day so you can look at this it's like it's like indecision

14:36 right both the buyers and sellers nobody is in control so it's like you know the girl's like man you know which guy should I go with this guy is Rich this one is handsome this one really loves me I'm undecided who do I go with you know so yeah there's a doji undecided right so adoji is a neutral pattern both buyers and sellers nobody you know has won the battle yet so if you look at the chart you can see that doji this was a pretty neutral pattern this is what we call a doji Candlestick pattern now moving on right there are many variations of adoji so here are a few to share with you this is what we call a dragonfly doji Okay so let's find out where are the four data points this over here is the opening price and this is the low of the day so now let me ask you where is the closing price and the high of today as you know

15:23 every Candlestick has four data points so where's the high of today and where is the closing price of the day let me give you five seconds one two three four five okay answer is this this is also the high of the day as well as the close of the day so if you look at this dragonfly doji the opening price the closing price and the high of the day is all at the same price level okay so this is what we call a dragonfly doji so why is this called a dragonfly doji I have no idea I can only speculate because people think that this looks like a dragonfly okay maybe maybe not who cares so anyway so what is the meaning behind a dragonfly doji so take another five seconds and think right what is the meaning behind this dragonfly doji does this look similar to a Candlestick pattern that you have learned earlier five seconds one two

16:10 three four five okay so if you say that it looks similar to a hammer Candlestick pattern that you've seen earlier then you're absolutely right so a dragonfly doji has a similar meaning to a hammer it's a bullish reversal pattern although not quite as strong as a hammer but also it still has a bullish meaning behind it this is where the opening price over here during the early part of the day the sellers took control and push the price down lower near these lows of the day and then the sellers you know they were back to a corner I mean the sellers were in control and the buyers got pushed until they say Ah that's enough run let me come in right coming coming out for those of you who watched Dragon Ball right so yeah this is where the buyers push con push the market up higher closing near the highs of the day right so they close at the highs of the day which is also the opening price of the day right so this tells you that

16:55 they uh a reversal in Market sentiment sellers were initially in control over here and then the buyers reverse up higher close back towards the high towards the opening price of the day so this is what we mean by a dragonfly doji it's a bullish signal so if you look at the chart right this is how a dragonfly doji looks like okay so dragonfly doji opening prices here sellers when control pushing down towards the low of the day over here before the buyers finally step in and reverse back up closing back where the market has opened earlier so this is what we mean by a dragonfly 2G okay the inverse of the dragonfly doji is what we call the gravestone doji so quick one right what Candlestick pattern do you think the gravestone doji looks like so if you learn earlier and you've

17:40 said a shooting star pattern then you are absolutely right it looks similar to a shooting star pattern the difference is that for a gravestone doji there is no body whereas the shooting star pattern you have this body over here so gravestone doji similar to a shooting star it has a bearish signal signal to it where initially during the open of the day the buyers were in control push the price up higher and then suddenly the sellers took control and drive the price down lower closing near the lows of the day which is also the opening price of the day which is also the closing price of the day so this is what we mean by a gravestone doji signaling to you that the sellers they are temporarily in control so it looks something like this over here you can spot the gravestone doji over here's the opening price is the low of the day as well as the closing price of the day and this is the high of the day so initially buyers to control push the price up

18:27 higher closing near the highs of the day and in the sellers Drive the market down lower closing back towards the opening price of the day and signaling to you right there is a rejection right of this higher prices over here okay the next Candlestick pattern that we have is what we call the Morning Star pattern and I want to point out is that this particular Candlestick pattern has three candles involved this is the first candle this is the second candle and then this is the third candle so this is a tree Kendall reversal Candlestick pattern right there are three candles involved so what does the Morning Star pattern mean so let's analyze this right bar by bar so on the first bar the first candle over here you can see the market open over here and the sellers took control and pushed the price down lower closing near the lows of the day so at this point you can see that the sellers man they are winning the battle right boo

19:13 yeah who's your daddy so the sellers are clearly in control driving down the market lower for the day then what happened next is that the next day the market open at this price point so at this point I think the sellers will think that oh man this today is going to be another Bloodshed day right we're gonna crush the market today as well but what happened instead is that the market tried to Rally up higher right over here then this is the highest of the day and then only to reverse down lower re-testing the lows of this day or rather testing the lows of the day and then finally pushing up higher and closing right where it pretty much opened for the day which is over here so at this point you can see that the sellers they try to drive the price down further but it's meant by uh but there's a lack of selling pressure right or there could be possibly be strong buying pressure

19:58 stepping in where the opening price and the closing price is the same for the day so this Candlestick pattern the second day one if you have seen the earlier uh training you know that this is what we call a doji pattern it's a neutral pattern where both the buyers and sellers right they are pretty much in equilibrium okay so nobody's winning the war as of yet and what happened on the third day is very interestingly on the third day the market opened at this price point they open over here okay and then the buyers suddenly found the string and stepped in and pushed the price up higher Kamehameha all right and they close near the highs of the day so if you look at this from this three candle perspective the story goes something like this right on the first day the sellers are in control they drive the price down lower on the first day the second day over here the sellers tried to drive the price down low but

20:44 couldn't push it any lower instead what they end up is a doji it's a neutral day where both the buyers and sellers are in control and on the third day the buyer suddenly stepped in and pushed the price up higher closing near the highs of the day reversing right the uh the down move right from two days ago so this is a bullish reversal Candlestick pattern right the morning start telling you that the buyers right they are temporarily in control so if you look at the chart it looks something like this so you can see over here right for this particular Example The price came towards this area of support right so price came into this area of support we had to bounce up higher and re-test support so over here look at the second retest this is where I want you to focus on we had strong selling pressure right from this highs all the way down into this area of Support over here and then we have this particular Morning Star pattern which is

21:29 shown over here so let me explain to you the psychology of the market okay so the Market Drive the price down lower on this particular candle you can see that the sellers they are clearly in control they might have thought they might have thought right they have won the battle man we have you know broke below support the market is going to collapse it's going to go down lower right who is your daddy right then on the next day we have this doji looking pattern so when the market forms a doji looking pattern it can be one of two scenarios number one there's a lack of selling pressure lack of I can just call it SP right selling pressure or number two it could be strong uh buying pressure okay so we have no idea which is which if there's a lack of selling pressure then you can see like the candle the range is is just not going down any lower because nobody's wanting to sell at the same time it could also be strong buying pressure because there could be very strong selling pressure trying to push the price down lower but why it ends up as a doji is because there's

22:15 also an equally strong buying pressure coming in right to hold up the price so strong selling pressure meets strong buying pressure you end up as a doji as well so it could be one of these two scenarios you do not know which is which unless we you know we look at volume and then we can tell but as of now I have no I have no volume on this shot so we can't tell as of now and then what happened is that on the third candle we have this strong bullish uh reversal candle I think we can even call this as a bullish engulfing pattern if you want because he has anger of the body of this uh this candle over here right see we have strong bullish candle closing near the highs of the day so this at this point it tells you that the bias they are temporarily in control because if you look at a story for this morning star sellers push the price down lower okay couldn't push it any lower form as a doji the third date buyers to control

23:00 and push the price of higher closing near the highs of the day the move is pretty strong that even close above right the highs right of this first candle over here so at this point this morning star shows you a bullish reversal pattern and that they bias they are temporarily in control next on the list is what we have we call the evening star pattern so one thing to point out is that the evening star is similar to the engulfing pattern in the sense that if you read you know textbooks or courses right they will tell you that you know the morning and evening star there should be a gap but the reason why I didn't put the Gap over here is again because if you trade the Forex Market the crypto markets you would rarely see gap on the charts so if you look at the textbook examples it would probably look something like this so the first candle would be something like this okay then this second candle could be over here like this and then the third candle it comes down lower like this okay so

23:45 this is something that you might see in a textbook or the courses so you can see over here from here to here right is the get okay this is the gap that we have over here that you might see elsewhere all right but for me I didn't put the cape over here because again you trade the Forex or the crypto markets this is something that you will unlikely see on those markets so that I kind of like remove this to make it relevant for crypto and Forex Traders and another thing to add also is that for the evening star the Morning Star pattern it doesn't this one doesn't necessarily have to be a doji pattern because it can also be a pattern like what we call just a small body candle something like this it could be something like like this right a relatively small body candle like this and then it reverse down lower over here close like this right this again could be also an evening star pattern so there

24:32 are slight variations to it and I'm not going to cover all the variations because later on as you'll find out that you know you don't really need to memorize every single Candlestick button out there because I'm going to share with you a cheat sheet right that within five seconds or less or you know whether the buyers or sellers are in control so I'll talk about that later on but for now let's talk about the evening star in more detail so again the evening star is just the inverse of the morning start the first candle you can see that the buyers they're in control there's the opening price they drive the price up higher and close near the highs of the day okay so clearly at this point right the buyers they're in control and the next day they thought that they know man let's drive the price up further all right let's push it up to the moon to the moon and then what happened is that on the second day the market form a doji pattern so this means that the market is pretty much a neutral for the day both buyers and sellers right they're

25:18 kind of like in equilibrium right this is the opening price of the doji price try to go up higher failed to do so then come down lower from the low of the day couldn't close near the lows of the day before it got rejected and then closed back at the same price where it opened so both buyers and sellers they are in equilibrium what happened on the third day Third Day the market opened at this price point and then the sellers took control and drive the price down lower and finally closing near the lows of the day so this tells you that this particular Candlestick pattern the evening star is kind of like a turn of event right initially the buyers were in control you're bullish bullish all the way up to the top then you find some uh pause in the market right that is dictated by the doji and then suddenly there's a sudden reversal where the market come down lower closing near the lows of the day so this means there's a uh the market is you know or rather the

26:04 sellers they are temporarily in control and the market could possibly hit down lower so looking at this chart you can see over here the market came towards this area of resistance I'll talk more about later about support and resistance what it means and how to draw it and stuff like that later on but for now I just want you to pay attention to the evening star pattern notice how the price drive up into this area of resistance right that is marking rate over here so for those of you who are not familiar resistance is an area where selling pressure could come in to push the price down lower no guarantee you will reverse from resistance so this is where you can use tools like Candlestick patterns right to help you time your entry again don't worry I will talk about all the details the trading strategies entries and exists later on and where it got interesting is that over here we have this evening star pattern look at the first candle how bullish it is the bias to control and push the price of higher closing near

26:49 the highs of the day breaking out of resistance people think that oh man this is the breakout it's real time to get long bye bye bye then what happened is that on the second day this candle over here notice we have this doji looking candle over here so this is not exactly a doji because you can see that there's a pretty small body over here so that's why I call it a doji looking pattern the body is pretty small but you can see that there's still a small body and the message behind this is that you know both the buyers and sellers they're pretty much in equilibrium because the opening price and the closing price is near the same level okay this is the second candle over here and then what happened next is on the third candle the sellers took control okay and they drive the price down lower closing right near the lows of the day so this lows of the day right has uh take out the lows of the previous day and pretty much a drive you know more than halfway through of the body of the first candle over here

27:36 right so closing somewhere around this this this portion right on the first day so we can see you can see that the sellers they're not temporarily in control and also one more thing about the evening star to add is that according to most textbook definitions the close of this third candle just has to exit the halfway point of the first candle to be classified as a Evening Star pattern so for example if let's say the this third candle let's say you only close somewhere over here right this won't be considered anything star pattern because it only closed uh around the 25 Mark of the first candle so he has to exit the 50 Mark of the first candle so let's say the first candle the 50 Mark let's say it's somewhere about here okay it's about here okay so this means that the third candle has to close right beyond the 50 Mark so it's close below

28:22 this line so in this case it close over here which is below this line so this is where the evening star pattern is kind of like uh concluded right we call this An Evening Star pattern so again this has a bearish annotation to it in this case the market did as a slight dip down lower so let's do a quick recap right to the things that you've just learned right a lot of Candlestick patterns right number one we talk about the hammer and the shooting star pattern so these are single individual reversal Candlestick pattern the hammer looks like this it tells you that the buyers they are temporarily in control and the shooting star looks something like this and it tells you that they sell us they are temporarily in control and another thing to add is that usually for hammer and shooting star the length of the Shadow right is usually at least two times the length of the body okay so there's another another thing to kind of take note off

29:09 right so repeat once again the hammer is shooting star usually the length of the Shadow it's at least two times the length of the body yeah next one we have the bullish and bearish engulfing pattern so bullish engulfing pattern is a two bar reversal pattern this over here is the first one is a bearish candle and then the next candle we have a strong close above the first candle okay so this is what we call bullish engulfing pattern where the second candle over here has engulf right cover the body of the first candle so this is a bullish pattern so the bearish engulfing pattern is just the opposite it looks something like this where the first candle we have a bullish candle okay and then the next candle right could be something like this where it engulf the body of the first candle and close lower for the day okay this is what we call the bearish engulfing

29:55 pattern then moving on we also talk about the doji the gravestone doji and the dragonfly doji doji is simple like just like this like across gravestone noji it's this one over here and dragonfly doji is like this okay so basically this has a bearish annotation to it and this is a bullish annotation to it why is that it's because over here you can see rejection of higher prices at one point in time the market opened at this price point trade up to this highs only to get rejected and come down lower and close at close where it opened for days so you can see that this over here this entire portion is rejection of higher prices and then this dragonfly doji is just the inverse this entire portion here is rejection of lower prices where the market closed at the same price where it opened previously yeah and moving on we talk about the

30:40 morning star and the evening star this is a three candle a reversal Candlestick pattern the Morning Star is something like this right so Morningstar I mean if you think about this how do I know whether morning or evening is bullish or very interesting about the morning the start of a bright new day this you know things are filled with hope and you know a great day ahead so we think about bullishness yeah so Morningstar is something like this okay so this is usually a down candle now with the next candle where it closed more than 50 of the halfway halfway mark of the first candle so the half first candle the halfway marks let's say somewhere about here this means that the third candle has to close Above This halfway mark to be classified as a Morning Star and if things start is just the inverse all right so this one over here so first is a green candle then we have like a doji or maybe even just a small body candle and mark it on the third candle

31:26 closer I'd be low the halfway mark of the first candle so this is what we call it evening star so this has a bullish annotation to it and this has a bearish annotation to it at this point you've learned a number of Candlestick patterns and here's the truth is that there are many more other Candlestick patterns out there I think possibly you know 50 or 100s more out there and the reason why you don't need to learn every single one is because I'm about to share with you a cheat sheet such that you can understand any Candlestick pattern in less than five seconds sounds good then let's get to it now the first part of this Candlestick cheat sheet is this right number one you wanna ask yourself where did the price close relative to the range so what do I mean by this as you know that every candle they have arranged the range between the highs and the low so let's

32:13 say this particular candle let's say it uh this is the body okay then you know that this is the highs and then this is the lows at the same time this is also the opening price and then this is the closing price so you want to ask yourself where did the price close relative to the range and of course there are many ways this can happen it can also happen like this okay in this case you can see over here with this upper shadow and this is the highs this is the open this is the close and this openness say this is the low so in this case where did the price close relative to the high in this case it closed right I would say near or pretty far away from the high so this tells you that there is a not very bullish not as bullish as this first candle over here so you can see how where the price closed relative to the range okay so in

32:59 this case the range is from this highs to this lows right can give you an insight to who's in control whether the buyers are in control or the sellers are in control so let me dive this a little bit deeper so if you look at this chart over here you can see that this is over here the first candle there are the range of this entire candle is from this highs to this lows so now ask yourself where did this price close relative to the range so you can see the market has closed at this price point over here this is pretty near the high so this is why we say that this is a very bullish candle because the price is closed near the highs of the day assuming it's a daily time frame now what about this the market is closed over here so where did it close relative to the range it close you know relatively near towards the highest but of course not as high as this first candle over here so overall we can say

33:45 that yeah this is still somewhat a bullish candle because the price is close right uh almost approaching near the highs of the day not very close to it but you know uh much nearer to the highest than the lows now what about this candle over here why is this a least bullish candle because yes even though the market is closed higher for the day that's the opening price this is the closing price even though it has closed higher for the day but it's actually very far away from this uh this highs of the of this uh the high of the day so you can see that this portion over here is what we call a rejection a rejection of higher prices so yeah even though it closed higher for the day there's some sense of a bullishness but it's not very bullish consider this the least bullish among the three so knowing where the candle closed right relative to the range right can give you an insight to know whether the buyers are in control or the sellers

34:30 are in control so let's do a few more before we move on so same for this one over here the market opened at this price point and then close near these lows over here why is this a bearish candle right because you can see that yes even though it closed lower for the day it didn't manage to close at the extreme lows it's just closer somewhat near to the lows of the day so we can consider this a bearish candle why is this very bearish is because the market opened over here and it closed right near the lows of the day right almost near the low so this is a very bearish candle and then this is the least bearish is because again you can see it open over here it closes over here yes it is a down day the market is closed lower for the day but if you look at the close right compared to where it was right previously during the day at one point right it was actually trading near these lows over here and then the buyers did step in and push the price up higher and

35:17 eventually causing the market to actually close uh somewhat below the opening price for the day so yep it is still bearish but it's at least bearish among uh the other candles that we have just discussed and again right this one over here while it's all this a neutral candle a neutral candle over here it's because again the market is pretty much just close right the within the middle of the range okay you can see right this one this is the highs this is the lowest close flat in the middle of the range so this is a neutral candle telling you that both the buyers and sellers they are pretty much in equilibrium same for this one over here this one fun fact that's what we call a long legged doji in other words the difference between this first doji pattern and this one over here is that the volatility of this candle over here is greater than the volatility of this doji looking pattern so this tells you there's more

36:03 volatility in this particular market right that's why you can see that the swings are much wider but the meaning behind behind it is still pretty much the same the buyers and sellers they are pretty much in equilibrium and finally what's this little negative sign over here this is what we call a fall price doji this is where the opening price the highs the lows and the close of the day is pretty much at the same price point and this is usually due to uh markets which are very illiquid right there's not much price movement you get this type of neutral or rather full price doji looking candle over here okay so that's the first part right knowing where the market closed relative to the range and this is important because it tells you who's in control and by the way if you are enjoying this training so far don't forget to smash the thumbs up button to bring a smile to my face okay

36:49 now the second part of this cheat sheet is is this right what's the size of the candle compared to the earlier one so the first part of the cheat sheet right just a quick recap is to where did the price close relative to the range is to find out who's in control are the buyers are in control or the sellers in control right because as you know if the price closed near the highs of the range clearly the buyers are in control and if the price closes near the lows of the range the sellers are in control if it closes near the middle of the range pretty much in this decision undecided now what about this what's the size of the candle compared to the earlier ones this question right helps you to this third question tells you right the conviction right behind the move so let me explain what this means so if you look at this chart over here you can see that over here we have a pullback right Market goes up pulls back goes up makes a pulls back pull back and then over here we have this

37:34 what we call a bullish engulfing pattern where the body of this candle has engulfed the body of this previous candle but if you look at the size of this bullish engulfing pattern there isn't really it doesn't really give you much conviction behind the move right because if you compare the size of this candle to the size of the earlier candles like this one over here this one over here this one over here maybe this one over here it's pretty much similar size or maybe even slightly smaller yeah so where we want to pay attention or to find out whether there's any conviction behind the move is to pay attention to the size of the Candlestick pattern compared to the earlier one so if you see an example like this right now you see a difference right Market makes a move up higher it makes a pullback slight move up higher it makes a pullback and now we have this bullish engulfing pattern once again but look at

38:21 the difference between this bullish engulfing pattern and the earlier one if you look at this bullish engulfing pattern this one over here and compared to the earlier candles like this like this like this like this like this like this you can see that it's much bigger than the earlier candle so this tells you that there is conviction behind the move in the market is likely to head up higher so this is uh what I mean by you know comparing the size of the candle relative to the earlier ones so just a quick recap with the cheat sheet number one the first question to ask yourself is where did the price close relative to the range of the candle this gives you an idea to who's in control whether the buyer sellers or equilibrium and then finally what's the size of the candle right relative to the earlier ones this tells you whether there's any conviction behind the move or not okay so this kind

39:09 of like sums up right the entire training on Candlestick patterns but what we are going to do next is to actually dive into the trading strategy because as you've learned earlier right we don't just trade Candlestick patterns in isolation we don't just see oh Raina look there's a hammer bye no we don't do just that right because we still need to look at the market structure the area of value support resistance you know when to enter when to exit and much more so all the juicy stuff coming up right now okay the first part of this trading strategy is to learn the market structure right so once you learn Market structure you pretty much know what to do right should you be a buyer should you be a seller or should you just stay out of the market so when it comes to Market structure there are three Market structure every Trader should know number one that's what we call the uptrend number two is a downtrend and

39:54 number three is a range market so let me dive into this into more details so uptrend what is an uptrend so a market is said to be in an uptrend when it consists of a series of higher highs and higher lows like for example Market hits up higher makes a pullback heads up higher makes a pullback higher makes a pullback hits up higher so you can see over here we have a series of higher highs let's call it HH higher high HH and then with this higher low higher low okay why is this called a higher lowest because right the low over here is higher than this previous low over here and why is this called the higher lows because this low over here is higher than this previous slope same thing why is this called a higher high because this high is higher than this High over here does it make sense so

40:39 let's have a look at an example to see this in action so if you look at this chart over here this is what we call an uptrend right from left to right Market is heading up higher and uptrend if you look at the highs and lows we have a series of higher high a higher high a higher high higher high higher high and higher high what about the lows if you look at the lows right this would be the the the first higher low right because it's higher than this low higher low this is another higher low another higher low a higher low a higher low and a higher low so you can see that when the market is in and uptrend it will consistently form a series of higher highs and higher lows now some of you might be thinking but right now this is not as easy as it seems because there are times where I see the market is in an uptrend like this then it goes down lower and it

41:27 continues up higher so now Rainer let me ask you Rainer is this now in a downtrend because we now have a lower high and lower low so that's a good question right because in Market structure in an uptrend you don't always get a series of higher highs and higher lows because there are times where the market can make a pullback and within the pullback right the the market gets messy it forms a lower high and lower low like what you're seeing over here or sometimes you could even do like like this over your Market goes up higher then it chops up into a range you thought it's going to be a reversal and then pump it breaks out higher so how do we know whether an uptrend trend is intact or not so this is where I'm going to share with you pay attention right something really important is what I call is this right basically an uptrend is invalidated only after the

42:13 price breaks below the swing low that precedes the breakout what do I mean by this okay so let me give you an example so if you look at an uptrend okay price goes up comes down goes up comes down goes up comes down goes up so when we talk about the swing low the swing low that precedes the breakout we are actually referring basically to a major swing point on the chart now when I talk about major swing point it can be hard to decide like for me I know this is a major swing point this is a major swing point this is a major swing point but to new Traders they can't tell so how do we know that's a major swing point is that you want to look at where did the market broke out previously so you can see over here previously this was the breakout point right over here is the highs and the market broke up over here so this is the the breakout point now where is the swing low that precedes the breakout the

43:00 word precedes means before where is the swing low that happened before the breakout so you can see that the swing load that happened before the breakout is this swing low over here so in other words right this uptrend will be intact unless the market has break and then close below this swing low until that has happened right we would say that the uptrend is still valid and we are expecting higher prices to come okay we would say the uptrend is only invalidated if it breaks below the swing low that precedes the breakout okay so let me give you an example so if you look at this chart over here let me ask you quiz time okay I'll just make your life a little bit easier this over here right is the High okay and when the market breaks out

43:47 of this High over here right you're gonna ask yourself where is the swing low that precedes the breakout and then you have this swing low over here okay now when you look at this chart right you can see that now on the market has actually break and closed below this swing low right yes breaking close below it so my question to you is this is this uptrend still intact or it has to be invalidated five seconds right think about this one two three four five okay so the answer is this is that the uptrend is actually still intact because it did not break below the swing low that precedes the breakout okay this uptrend is still intact so you can see what happened next is that this Market it did a deep down lower and then continue deep down lower and then continue up higher because this is the swing low that you want to pay attention to if if only if the market breaks and close below it then we can

44:33 say that hey you know this uptrend is no longer in Tech and the market could possibly go into a range or reverse down lower so remember right uptrend is invalidated only after the price breaks below the swing low that precedes the breakout okay so one more example look at this chart over here at this point the market has break below this low over here it's breaking close below it let me ask you is the uptrend still in Tech or has it been invalidated otherwise known as otherwise or can we say that the uptrend is destroyed yeah so what's your answer five seconds one two three four five okay the answer is this right so if you first and foremost find out where is the swing low that precedes the breakout this is the breakout Point all right this is the highest that we are referring to so at this point the market has break out of this highs so where's the swing low that happened before the

45:20 price breaks below this highs this is the swing low over here so at this point you can see that the market did break below this uh swing low so at this point this is what what I'll say right that the market the trend is no longer intact and it could possibly you know go into a range or even reverse down lower now one important thing to add is that in an uptrend we only want to look for buying opportunities so for example if you see a chart let's say we go back to the earlier chart like uh I think this one over here in this case right when you see that the market is in an uptrend we only want to look for buying opportunities why only buying opportunities I mean you can look for selling opportunities if you want to buy if you're a new Trader just getting started I recommend only to look for long setups basically to look for buying opportunities because that is the path of least resistance because when you look at markets which are in an uptrend

46:06 it is more often than not right that the market is likely to continue heading up higher so by trading along the path of least resistance by trading in the direction of the trend you number one are putting the odds in your favor and number two you are getting the most bang for your buck because if you look at by trading in the direction of the trade look how much higher the market can move in your favor so by trading the direction of the of the trend the move can explode up this much higher this much higher whereas if you are like a counter Trend Trader looking for selling opportunities in an uptrend you can see that the the move the down move is much smaller much smaller and much smaller so this is why as much as possible you trade in the direction of the trend so if you spot the market is in an uptrend look for buying opportunities and avoid selling in that market scenario a market

46:52 is said to be in a downtrend where it forms a series of lower highs and lower lows something like this Market head is down lower pulls back then breaks down lower pulls back breaks down lower pulls back break down lower so if you look at the highs right We compare this high with this height this is a lower high because this current high is below this high and of course this is a lower high as well and this is a lower low because this low is below this low and likewise this is also a lower low so you'll see a series of lower lows and lower highs in the downtrend and just like an uprender when you see a market is in the downtrend you want to look for selling opportunities because that's the path of least resistance by looking for selling opportunities in the downtrend you can see that the move right the magnitude of

47:38 the move is much larger you can see this is the magnitude of the move that you can expect the magnitude of the move the magnitude of the move compared to let's say you are looking to buy in a downtrend the move is usually much smaller you can see over here this move is usually much smaller okay so let's have a look at an example so over here this is a market the pound against the dollar and if you just identify the highs and lows this is a lower let's take this is the first side and this would be the lower high a lower high a lower high a lower high a lower high and then this is say let's say we take this as the first load and this will be the lower low lower low lower low lower low lower low and a simple trick is that if you look from left to right right if the market is trending it usually will point to One Direction in this case it's just pointing down lower and once again right

48:24 when the market is in the downtrend we want to look for selling opportunities now some of you might be thinking about rain I know Market downtrend is not as obvious right sometimes I see the market Spike up higher I thought it's an uptrend I buy only to get stopped out why well that's because remember we we have an idea to how a downtrend looks like but the market somehow just doesn't you know play out to our expectations there are times where you can just do this Market hits down lower and then it suddenly makes a strong pullback right we thought this is the start of a new uptrend we buy only to see the market collapse down lower so how do we not get caught right by this fake move right and again we're going to use this principle which I just shared with you right just that this time round is for a downtrend a downtrend is invalidated only after the price breaks above the swing high that precedes the

49:11 breakout or breakdown if you want to call it so so let's say for example Market is in a downtrend and then it breaks down lower and then now it hits up higher over here okay now where is the swing high that precedes the breakout so the breakout point is actually over here okay just here this is the breakout point okay because it broke below this low this is the breakout point so where is the swing high that precedes the breakout the swing height that precedes the breakout is actually this level over here so until the price can break above this swing high I would say that the downtrend is still intact until the market can break Above That Swing high and if the market does break above the swings I I would then tell myself hey this Market could possibly go into a

49:56 range or even start or be the start of a new uptrend okay so let's have a look at a quick example so quiz time look at this chart let me ask you is this the start of a new uptrend or is the trend likely to continue down lower so remember the rule is this right for downtrend is that uh a downtrend is only invalidated it's only invalidated until the price can break above the swing high that precedes the breakup okay so what do you think the answer is so one two three four five okay so here's how I'll do it so where is the price or where did the price break out so the breakout point is actually here this is where the market broke out and where is the swing high that precedes the breakout the swing high is this one

50:42 over here so just to dive in a little bit more details you can see that this is actually also a swing high so how do we decide between this swing high and this swing high so I like to be more conservative I like to take the swing high that is actually higher the one that is further away from the breakout point so it's this one so I'll reference this swing High over here so until the market can break above this swing height I would say that you know the market is still in the downtrend until right the market managed to let's say go up higher break above this swing High then I'll say at this point it could be the start of a new uptrend or the market could enter a range so in this case you can see that the market that did continue down lower because it did not break this swing High there's a high that we've identified earlier which is the key swing point in this downtrend yes now what about range markets a market is

51:27 said to be in a Range when it's contained between the highs and the low so let me give you an example so let's say the price goes up higher then pulls back lower heads up higher pulls perspect lower heads up higher and pulls back lower so at this point you notice that this Market is not in an uptrend because it's you know it doesn't form a series of higher highs and higher lows neither is it in the downtrend because you don't see a series of lower lows and lower highs instead what you have is actually a range Market the market is contained between this highs over here and this lows over here okay so this is what we call support and resistance this low of the range is usually what we call an area of support and this highs over here is what we call an area of resistance so this is what we call a range market and of course in reality the range Market isn't as precise as

52:15 this because in reality the market could break down below support and then goes back up into the range again so let me give you an example of how a range Market looks like so you can see over here this is an example of a range Market notice how the highs and lows are not exactly precise notice how this this uh this price point over here the market took out this low so right people thought it's going to be a breakdown before the market reverse up higher once

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