90023The Right appliion of Japanese Candlestick patterns INVOLVES an Comprehension of the price action Before and or within the Japanese Candlestick occurs.Originally Posted by ;
Most traders that fail using Japanese Candlesticks, fail because they do not concentrate on price action and rather believe it is just about pattern recognition.
Simply, your statement infers that Japanese Candlesticks and Price Action are mutually exclusive, they however are not. This is despite the fact that learning sources for Japanese Candlestick analysis teach it .
There is more than 1 way to skin a....Originally Posted by ;
I view price action just trading (no indiors) otherwise. Have a look at the chart below. This is a good example of a Bearish Engulfing pattern (not the generic patterns found in books or most online sites). From this particular pattern to life is an understanding of exactly what caused it. That's to say, the price action surrounding it.
I like quantity. Although seemingly one be a commerce and scalper VSA or can not trade from one timeframe, I use some of it in viewing price action. :
A. Broad Spread up candle on increased and climatic quantity. Markets do not like high volume on up candles. Be aware that we closed off the top of the candle. IF all the volume related to the candle has been buying, and then the candle shouldn't shut of the high.
B. The following candle is up. This does not imply, however, there wasn't hidden selling in the preceding candle. Also, note that in this candle we shut off the high. We shut in the reduced 1/3 of the range of the candle. The long upper shadow shows provide (selling) entering the market. This is an upward Thrust.
C. Bearish Engulfing dark candle. Whilst the quantity is less than the preceding two candles, it's nevertheless bearish. A B C all together create the bearish engulfing pattern. A alone is an candle line. As are B and C, but together they change from independent candle lines (intervals) to a legitimate candle pattern.
D. Another candle with quantity less than the preceding two candles. But let's think about the circumstance. We have seen provide enter on two up candles (near greater than the previous candle's shut ) and now we see an up candle using DECREASING volume. The Smart Money isn't interested in prices at this time. In VSA parlance, this isn't any Demand.
VSAers can't take this trade because they need to check at 6 different timeframes and talk about background from 3 days ago. As a true price/volume activity trader that incorporates Japanese Candlestick Patterns into the mix, the point is set.
I feel this is how price action flows...