The Belt-Hold Line Candlestick Pattern
Bullish and Bearish Belt-Hold Line Candlesticks
The Belt-Hold candlestick pattern (or yorikiri as it is know in Japanese) is considered a minor trend reversal pattern that can indicate a bullish or bearish trend reversal, depending on the nature of the pattern and direction of the trend in which it appears. The Belt-Hold pattern is a single candlestick pattern that is similar to a Marubozu candlestick in that it is has a large real body with little or no shadows, indicating the strength of bullish or bearish activity. The single Belt-Hold candlestick that appears in an uptrend is a potential top reversal pattern and the pattern is a Bearish Belt-Hold pattern. The bearish belt-hold line consists of a single dark candlestick that opens at or near its high and closes at or near its low, leaving very little upper or lower shadows. Conversely, a Bullish Belt-Hold pattern appears in downtrend and is a potential bottom reversal pattern. It consists of a single rising candlestick that also opens at or near its high and closes at or near its low. The length of these candlesticks indicates a potential change is sentiment, thus the pattern becomes more significant if depending on the size of candlestick in this pattern.
Both the bullish and the bearish belt-hold lines are more reliable when they appear near market extremes as indicated by trend lines, support and resistance, pivot points and moving averages. They are also more significant when they form part of other candlestick patterns, such as the dark-cloud cover pattern or the engulfing pattern.
The dark-cloud cover pattern is the opposite of the piercing pattern and appears at the end of an uptrend. It is a dual candlestick pattern with the first candlestick being light in color and having a large real body. The second candlestick must be dark in color, must open higher than the high of the first candlestick and must close down, well into the real body of the first candlestick. The deeper the second candlestick penetrates the first, the more reliable the pattern becomes.
The dark-cloud cover pattern is also more reliable when it appear at or near a resistance line ...
The Hanging Man and Hammer candlestick patterns are related trend reversal patterns that may appear at the end of an uptend or downtrend respectively. This is a single candlestick pattern that with a short real body, little or no upper shadow and a long lower shadow that must be at least twice as long as length of the real body. The color of the candle is not import, only its location in the current trend.
The Hammer pattern is called a takuri in Japanese, which means testing the water for its depth. This is the bullish version of the pattern. A bearish ...
The Evening Doji Star
Star patterns are trend reversal patterns that consist of three candlesticks, with the middle candles stick forming the star. A star is a candlestick with a short real body, like a doji or a spinning top, that gaps away from the real body of the preceding candlestick. There are three basic star patterns: the morning star, which appears in a downtrend; and the evening star and the shooting star, which appear in an uptrend.
The morning star and the evening star have a doji or a spinning top as the second candle...
Three Black Crows
The Three Black Crows pattern is the bearish counterpart of the Three Advancing White Soldiers pattern. It is a reversal pattern that consists of three bearish candlesticks that should come into consideration when it appears within an established uptrend, where it indicates a weakness in the uptrend and, potentially, the beginning of a down trend.
Each of the three candlesticks in the Three Black Crows pattern should be relatively long bearish candlesticks with little or no lower shadows. Each of the candlesticks in this pattern should mark a steady decline in ...
When the open and close are at the high and the low, or vice versa, then the candlestick will have no shadow above or below the real body. These candlesticks are called Marubozu, which means shaven, and can be either bullish and light in color, if the Marubozu closes at the high of the period, or bullish and dark in color if it closes at the price low. A bullish Marubozu indicates strong buying pressure as the buyers did not allow the sellers to drive the price down. The length of the candlestick indicates the strength of the bullishness, especially when the Marubozu is longer than the preceding candlesticks. Conversely, a bearish Marubozu indicates strong selling pressure. A bullish Marubozu at end of a downtrend is a potential reversal signal. You should close your short position and wait for the next candlestick to enter a long position if it is also bullish. Similarly, a bearish Marubozu at end of an uptrend it is also a potential reversal signal.
The Marubozu without a shadow at either end is less common than a Marubozu that is shaven on one end but has a shadow on the other end. The shadow can form either the opening of the candlestick or at its close. When the shadow forms at the closing price it tentatively indicates weakness as the price was pushed back near the end. However, this is a weak indication and does not necessarily indicate a reversal.
Continuation patterns indicate that there is a greater probability of the continuation of a trend than a trend reversal.. These patterns are generally formed when the price action enters a consolidation phase during a pre-existing trend. During the consolidation phase, the trend appears to change; however, the continuation of the preceding trend is more probable.
Some of the common continuation patterns include the cup and handle pattern, flags and pennants, symmetrical triangles, ascending triangle and desc...
Reversal patterns mark the turning point of an existing trend and are good indicators for taking profit or reversing your position. Generally, trend reversal patterns indicate that a support level in a downtrend or a resistance level in an uptrend will hold and that the pre-existing trend will start to reverse. These patterns allow you to enter early in the establishment of the new trend and are usually result in very profitable trades.
The common reversal patterns include the double tops and double bottoms, triple tops and triple bottoms, broadening tops and broadening bottoms, ...