Things we should know about the price action on candlestick pattern

[gunhell16]

Why should we care? Of course, it can help us forecast where the price of the cryptocurrency we wish to trade will go in the market or in the future. Because, as the saying goes,
"A trader can use a market price to describe the human thought process that underpins a market's movement."

[a]Dark Cloud Cover

Candlestick patterns indicating a potential reversal to the downside appear at the top of an uptrend and consist
of a large bullish candle followed by a bearish candle that creates a new high before closing lower than the previous midpoint bullish candle.



5 criteria for the dark cloud cover

1. Existing Bullish uptrend
2. Bullish candle within that uptrend
3. A gap on the following day
4. The gap up turn into a down candle
5. Below the midpoint of the previous candle


Trading RULES:

1. An uptrend must be clearly present on the price chart
2. The dark cloud cover must be formation must be present
3. The second bar within the  dark cloud cover must be outside upper Bollinger
    band line
4. Enter a sell order at the break and close of the low of the second candle within the
    dark cloud cover.
5. The stop loss must be placed above the high of the second bar of the dark cloud cover
    formation.
6. Exit: the price crosses below the Bollinger band centerline and then closest above it.
   or price touches the lower Bollinger band line.


-----TO BE CONTINUED------

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[bettercrypto]

Thank you, Op, for the tutorial you gave. You did it pretty well, and it looks like you will make a series of tutorials about the trading idea. For others, they won't notice it much, but if an individual has a passion for trading, having an idea to be able to predict the direction of the price is really a huge help.

It's just like me; I just now somehow understood what it means in its actual appearance when doing trading activity in daily chart trading. I will look forward to this series you will do; it will be a great help to the community that wants to expand its knowledge of crypto trading.

[Wapfika]

Thanks for this informative trading guide. I’m not aware on this because I’m usually using Doji as sign for trend reversal since that’s the most common and easy to spot pattern. This new knowledge is really informative since I’m struggling to find when will the trend will reverse without any doji in sight.

I really your strategy and I think you should compile it or put the reference thread link for your previous strategy thread since I notice that you have more aside from this one. Keep sharing OP.

[DVlog]

Candlestick patterns can be a great way to make predictions of the future price in forex, option and stock trading but in terms of crypto this type of pattern will not have any meaning if there are any news events. Any negative or positive news can prove your prediction wrong if it is only based on candlesticks. There are people who still follow these old methods to trade crypto but there won't be much positive result from using them. Support and resistance are the only two most powerful price actions that can give accurate predictions most of the time in crypto.

[Franctoshi]

Candlestick patterns can be a great way to make predictions of the future price in forex, option, stock trading
Any negative or positive news can prove your prediction wrong if it is only based on candlesticks.

All the news events, positive and negative news that affect the market, economic news, wars, political news, and a pandemic disease like the coronavirus are represented there in the charts with candle stick patterns. Sometimes, it is possible to predict the market based on candlestick patterns.

but in terms of crypto, this type of pattern will not have any meaning if there are any news events.

This is not true, News events are not selective of a certain market, they affect all markets, stocks, Forex, and option markets, and not just titled to the cryptocurrency market.

[Bushdark]

Honestly this is pretty cool for me and op had really tried sharing this knowledge to the community. Price action is what some traders mostly use to analyze market movement and keep things in the right proportion. We need to action canddle stick pattern very well because this gives us a hedge in the market so when we see a particular candsle stick pattern, we can be able to understand what the market is likely to so next and how we can act on it. Trading is very inspiring and full of learning. Even the professional trades are still learning to be a better trader and earn from the market.

[jeraldskie11]

Thanks for this informative trading guide. I’m not aware on this because I’m usually using Doji as sign for trend reversal since that’s the most common and easy to spot pattern. This new knowledge is really informative since I’m struggling to find when will the trend will reverse without any doji in sight.

I really your strategy and I think you should compile it or put the reference thread link for your previous strategy thread since I notice that you have more aside from this one. Keep sharing OP.

For me, the doji candle are not confirmation candle that the trend will reversed because it only indicates to an equal volume of demand and supply in a specific time frame. Mostly it was used as a confirmation that the trend is running of strength and the reversal will going to occur soon. The best reversal confirmation candlestick that we can consider is the pin bar because it clearly indicates that the opposite direction are now in-control of the market. We usually see it in the chart before the impulsive trend occur.

[348Judah]

Why should we care? Of course, it can help us forecast where the price of the cryptocurrency we wish to trade will go in the market

The more we are able to study the weekly candles the better our trading experience becomes because we are going to have a direct prediction of what the next actions on bitcoin market price will be base on the volatility trend and pattern as seen on the chart, we also know that not everyone were able to understand the way they can perfectly make a careful study of on the candles, except for those already used to the whole thing, therefore, being a trader, we are expected to know how to speculate well on the market price in other to have an accurate preciseion on what we target for the market in our own favour.

[Ben Barubal]

     To be honest, I have no idea about that dark cloud cover, but because of what Op did, I had an idea about that storm. Honestly, I still don't know a lot about things like that, but I know a little bit more and understand.

     Well, in fact, the only thing I know how to use is the same one taught by the OP, the Fibonacci retracement; now this is what he teaches and explains.Thank you, Op, for patiently sharing the knowledge you teach or share here. It is a great help to those who are still learning trading.

[Dickiy]

Why should we care? Of course, it can help us forecast where the price of the cryptocurrency we wish to trade will go in the market

The more we are able to study the weekly candles the better our trading experience becomes because we are going to have a direct prediction of what the next actions on bitcoin market price will be base on the volatility trend and pattern as seen on the chart, we also know that not everyone were able to understand the way they can perfectly make a careful study of on the candles, except for those already used to the whole thing, therefore, being a trader, we are expected to know how to speculate well on the market price in other to have an accurate preciseion on what we target for the market in our own favour.

Well and this is the importance that we must have time to at least pay attention to market movements or habits that often occur in one of the markets, when we are used to seeing events that are there then obviously then it will greatly help us to be able to look for clear indications that will result in a fairly precise decision about buying or selling. I think this will be very useful for those traders who like to invest in the short term. Honestly, I am also one of the traders who always create their own strategies from understanding the candlestick patterns that I get from market habits, I feel it myself that this is a fairly effective way. Therefore, I have also told several people that trading is very difficult and cannot be learned instantly because of course we need time to know the habits of the market first, one of which is by always paying attention to the charts that occur in the market.

True, not everyone can understand everything in trading, especially in understanding this very complicated candlestick, I also took more than a year to learn some candlesticks that have indications and influence the next market movement. In my experience do not use too many indicators there because each indicator has a different meaning in terms of indications and you will be confused when the indicators you use contradict each other. So just use a few indicators, one or two to determine the support and resistance areas and then after that you can look for confirmation from candle formation, if all of them show the same direction then you can start to open trades.

[Maus0728]

I thought this is just a simple multiple test of resistance that creates distribution cycle or perhaps a downtrend.

Because as far as I know, if a resistance or support has been tested multiple times, it gets stronger or is less likely to breakout/breakdown from that range, which is seen from the chart. A more effective approach I guess is to ascertain first the relative strength or weakness of asset vs the leading cryptocurrency, which in this case is bitcoin.

But hey, that's just me as we all have different insights on how we are going to trade the market.

[gunhell16]

Candlestick patterns can be a great way to make predictions of the future price in forex, option and stock trading but in terms of crypto this type of pattern will not have any meaning if there are any news events. Any negative or positive news can prove your prediction wrong if it is only based on candlesticks. There are people who still follow these old methods to trade crypto but there won't be much positive result from using them. Support and resistance are the only two most powerful price actions that can give accurate predictions most of the time in crypto.

You know, I want you to understand that support and resistance are undeniably two of the most important concepts when an individual trader performs technical analysis. Where we can use it to predict something, we want to know where the future price movement will go. Take note that the word "future" means it is coming or it will happen; it means we are predicting the possible direction it will go, which also means we are not sure if it will rise or fall. This is where you should understand that there is no 100% accuracy in the prediction we will make.

I also want you to know that support and resistance levels are not always reliable. It should not be used in isolation to make decisions about the trading we do. Now, my question to you is: How can you identify the support and resistance, dude? Are there things to do here? Of course, yes. What should you do to identify support and resistance? When you answer this question of mine, you can tell if you have enough knowledge of trading, and if you don't know the answer to this question, I can tell you the answer here so that others here can know.

Because if you can't answer this question of mine exactly or even close to what I expect, all I can say to you is "Study more." Because even though I already know something, I'm still studying it until now.

[GreatArkansas]

Candlestick patterns can be a great way to make predictions of the future price in forex, option, stock trading
Any negative or positive news can prove your prediction wrong if it is only based on candlesticks.

All the news events, positive and negative news that affect the market, economic news, wars, political news, and a pandemic disease like the coronavirus are represented there in the charts with candle stick patterns. Sometimes, it is possible to predict the market based on candlestick patterns.

but in terms of crypto, this type of pattern will not have any meaning if there are any news events.

This is not true, News events are not selective of a certain market, they affect all markets, stocks, Forex, and option markets, and not just titled to the cryptocurrency market.

Franctoshi is correct, all these news/events must be differentiated with technical analysis.
If you are doing analysis on charts, then focus on charts, it's too technical so don't use the fundamentals like news/events from your analysis because it will make you confuse and sometimes you miss a good trade.

[Husires]

It is difficult to determine dark cloud cover without considering it a confirmatory indicator and not a main indicator because sometimes, even if the price has not approached a point of support or resistance, dark cloud cover will give false results because the trading trend cannot be reversed outside a price range without breaking the support or resistance from a candle. One closed, meaning the price decreases, but not to a profitable extent.
If you can give us examples of dark cloud cover occurring in Bitcoin trading, you may be able to convey the information better.

You need to edit your post, this is the longest space after the reply I have seen.

[hd49728]

It is difficult to determine dark cloud cover without considering it a confirmatory indicator and not a main indicator because sometimes, even if the price has not approached a point of support or resistance, dark cloud cover will give false results because the trading trend cannot be reversed outside a price range without breaking the support or resistance from a candle. One closed, meaning the price decreases, but not to a profitable extent.
If you can give us examples of dark cloud cover occurring in Bitcoin trading, you may be able to convey the information better.

I would like to focus on trading volume because some candles can look interesting but without good signals from trading volume at or around those candles, they don't mean anything for my trading. Ignoring trading volume will cause big trading mistakes that I try to avoid because they will cause losses of my trading fund.

Support and resistance can be broken only with high trading volume and fake break out or break down will appear with not significant high trading volume than previous candles. The market needs trading volume to be live and need high trading volume to go up or down dramatically.

[benalexis12]

Candlestick patterns can be a great way to make predictions of the future price in forex

At this point, I disagree with you. If we base it on what Op did for me, then what you said is not correct. How did I say that?
OP guidelines made this so others know what dark cloud cover does.

In addition to that, this OP explained that, from what I saw, the dark cloud cover can be used in forex, stock, and cryptocurrency trading.

Any negative or positive news can prove your prediction wrong if it is only based on candlesticks. There are people who still follow these old methods to trade crypto but there won't be much positive result from using them.

You are wrong again here; even though it is an old method, it is still useful.
There are many expert traders who still use this method. Now the question is
Are you an expert?

Support and resistance are the only two most powerful price actions that can give accurate predictions most of the time in crypto.

You are wrong again here. How can support and resistance be accurate if we base them on prediction? Has anyone seen someone make a prediction that says this prediction of mine will happen 100%? Is there a prediction that is 100% correct?

[Ben Barubal]

   Without a question, OP is doing a terrific job of disseminating trade knowledge. I'll give this all some thought. Since OP is not difficult to understand, it seems to be simpler if you understand what he is teaching here.

   I'll watch this tutorial series that he produces because, to be completely honest, teaching something like this about trading is not that simple. Because there are so many different indicators, each one may be used to predict the market direction in which the price of a cryptocurrency or bitcoin is most likely to move.

[tygeade]

I thought this is just a simple multiple test of resistance that creates distribution cycle or perhaps a downtrend.

Because as far as I know, if a resistance or support has been tested multiple times, it gets stronger or is less likely to breakout/breakdown from that range, which is seen from the chart. A more effective approach I guess is to ascertain first the relative strength or weakness of asset vs the leading cryptocurrency, which in this case is bitcoin.

But hey, that's just me as we all have different insights on how we are going to trade the market.

Sometimes, but sometimes what is tested gets weaker, because it gets a piece of it destroyed. Imagine it like a wall, so lets say you want to go above 30k, but there is a wall at 30k, the more you hit that wall, the more possibility that it will break down eventually.

However, the most logical thing that happens most of the time is that when people hit that wall, they say there is a wall here and move somewhere else, just like how if you hit a wall, you do not keep trying to go through it in real life right? But there are rare moments when people are fed up with going down, so they just push through it, and with millions of people buying, that means millions of people punching the wall, soon the wall crumbles.

[Hamza2424]

TBH, this is a nice topic idea, and your execution is also promising I would love to see more of such a topic from your side as in the end, you've already mentioned the To Be Continued, it is better to bring these topics into the trading section. I had also covered a newbies's trading chapter, for some reason, I had paused it but after reading this one I think besides all the reasons I should start it again. Sadly in the trading section, 50% of topics are redundant and there are very rare promising topics, It would be great to have a member like you to accompany us in the trading section further.

"A trader can use a market price to describe the human thought process that underpins a market's movement."

That's what we can the physiological readings, emotion readings.

[kingvirtus09]

TBH, this is a nice topic idea, and your execution is also promising I would love to see more of such a topic from your side as in the end, you've already mentioned the To Be Continued, it is better to bring these topics into the trading section. I had also covered a newbies's trading chapter, for some reason, I had paused it but after reading this one I think besides all the reasons I should start it again. Sadly in the trading section, 50% of topics are redundant and there are very rare promising topics, It would be great to have a member like you to accompany us in the trading section further.

"A trader can use a market price to describe the human thought process that underpins a market's movement."

That's what we can the physiological readings, emotion readings.

Well, what you said is true; the OP is doing an excellent job here of instructing on cryptocurrency trading. I've seen a number of trading-related topics posted in this thread, and I'll be honest: what they did was alright but not very simple to understand.

However, in the OP's approach, I can see the effort he is trying to reach others who find it difficult to comprehend the basics of bitcoin trading. As a result, it is really nice that he is giving the knowledge he has, and I am also genuinely interested in what he will accomplish. Teaching about crypto trading will be done more in the future.