Understanding
Forex Pattern Recognition
Now we will learn to understanding forex pattern recognition.Basic Pettern
Marubozu
Marubozu means having only body and having no tail or shadow. The opening price is equal to the closing at the highest and lowest price.
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Forex Pattern Recognition of Marubozu in white color is a candlestick chart without a tail showing Bullish or increasing trend. This condition is created if the opening price is equal to the lowest price and the closing price is equal to the highest price. This condition shows that buyers controlling price movement since the early transaction, or opening price to closing price. Generally, it shows the early indication of bullish or increasing trend, or reversal pattern trend.
Understanding Forex Pattern Recognition of Marubozu in black color is a candlestick chart without tail showing a bearish or decreasing trend. This condition is created if the opening price is equal to the highest price, and the closing price is equal to the lowest price. It shows that sellers controlling price movement since the beginning of transaction (opening price) to the final transaction (closing price). Commonly, it shows the indication of bearish/decreasing trend, or a reversal pattern.
(Picture will be uploaded soon)
Forex Pattern Recognition of Marubozu in white color is a candlestick chart without a tail showing Bullish or increasing trend. This condition is created if the opening price is equal to the lowest price and the closing price is equal to the highest price. This condition shows that buyers controlling price movement since the early transaction, or opening price to closing price. Generally, it shows the early indication of bullish or increasing trend, or reversal pattern trend.
Understanding Forex Pattern Recognition of Marubozu in black color is a candlestick chart without tail showing a bearish or decreasing trend. This condition is created if the opening price is equal to the highest price, and the closing price is equal to the lowest price. It shows that sellers controlling price movement since the beginning of transaction (opening price) to the final transaction (closing price). Commonly, it shows the indication of bearish/decreasing trend, or a reversal pattern.
Spinning Tops
Forex Pattern Recognition of Spinning Tops are candlestick charts with long tails in both sides, up and down. This condition the un-consistency between bullish and bearish condition.
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The little body shows that the opening price is slightly different to the closing price, while the tail or shadow shows a high activity, either bullish or bearish condition. Even though the opening price and the closing price is only slightly different, there’s a big movement that can be seen from the length of the tail.
If the candlestick chart shows a spinning top pattern at the bullish trend, you need to be careful. This condition is likely to be a reversal trend, and vice versa.
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The little body shows that the opening price is slightly different to the closing price, while the tail or shadow shows a high activity, either bullish or bearish condition. Even though the opening price and the closing price is only slightly different, there’s a big movement that can be seen from the length of the tail.
If the candlestick chart shows a spinning top pattern at the bullish trend, you need to be careful. This condition is likely to be a reversal trend, and vice versa.
Doji
Forex Pattern Recognition of Doji Patterns is a pattern where the opening price is the same to the closing Doji patterns shows the balance “fighting” between sellers and buyers. Doji Pattern becomes important if it happens within or after a candlestick chart with a long body. DOji Pattern is not too crucial if it happens between spinning tops.
There are 4 types of Doji Pattern:
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Doji Patterns and Trend
Doji Patterns is crucial if that pattern exist after a trend happened. Exists after a trend happened. In a bullish trend, and then a doji pattern happens, it can be concluded that the buying pressure is weakening. In a bearing trend, and then a doji patterns happens, it can be concluded that the selling pressure is weakening.
Doji Patterns indicate the selling and buying pressure are getting balance, and it will likely be the end of certain trend.
Reversal Patterns
A pattern can be categorized as a reversal pattern if a certain trend has been firstly happened. Bullish reversal needs decreasing trend, while bearish reversal needs increasing trend. Trend movement can be analyzed with a help of technical analysis, such as moving average, and so on.
Long Shadow/Tail reversals
There are 2 pairs of reversal forex patterns which are made of a bar of candlestick charts. The forex patterns are in the form of 1 little body, 1 long tail, and another short tail, in which the longer tail is at least twice as long as the short tail. This forex patterns in a candlestick chart will determine the reversal direction.
The first pair is called as “Hammer” and “Hanging Man” which can be noticed from a little body with long tail at the bottom.
The second pair is called as “Shooting Star” and Inverted Hammer” which can be noticed from a little body with long tail at the upper part.
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Read More about Technical Analysis:
Bookmark/share this article with others:There are 4 types of Doji Pattern:
- Long-legged Doji
- Dragonfly Doji
- Gravestone Doji
- Fourprice Doji
(Picture will be uploaded soon)
Doji Patterns and Trend
Doji Patterns is crucial if that pattern exist after a trend happened. Exists after a trend happened. In a bullish trend, and then a doji pattern happens, it can be concluded that the buying pressure is weakening. In a bearing trend, and then a doji patterns happens, it can be concluded that the selling pressure is weakening.
Doji Patterns indicate the selling and buying pressure are getting balance, and it will likely be the end of certain trend.
Reversal Patterns
A pattern can be categorized as a reversal pattern if a certain trend has been firstly happened. Bullish reversal needs decreasing trend, while bearish reversal needs increasing trend. Trend movement can be analyzed with a help of technical analysis, such as moving average, and so on.
Long Shadow/Tail reversals
There are 2 pairs of reversal forex patterns which are made of a bar of candlestick charts. The forex patterns are in the form of 1 little body, 1 long tail, and another short tail, in which the longer tail is at least twice as long as the short tail. This forex patterns in a candlestick chart will determine the reversal direction.
The first pair is called as “Hammer” and “Hanging Man” which can be noticed from a little body with long tail at the bottom.
The second pair is called as “Shooting Star” and Inverted Hammer” which can be noticed from a little body with long tail at the upper part.
- Hammer and Inverted Hammer are a reversal forex patterns from decreasing trend to the bullish situation.
- Hanging Man and Shooting Star are reversal forex patterns from increasing trend to the bearish situation.
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Read More about Technical Analysis:
- Technical Analysis in Forex Trading
- Forex Trading Charts
- Japanese Candlestick Patterns
- Hammer and Hanging Man Patterns
- Support and Resistance Indicator
- Forex Trendline Indicator
- Forex Channel Indicator
- Fibonnaci Squence Golden Ratio
- Understanding Fibonacci Squence
- Fibonacci Retracement
- Moving Average Method
- Which are is better between SMA and EMA?
- Forex Trading Common Indicators
- What is Bollinger Bands?
- What is MACD?
- What is Parabolic SAR?
- What is Stochastic Oscillator?
