CHART PATTERNS (1)

Selasa, 12 Agustus 2008

When to buy and when to sell could very well be the question of all questions when it comes to trading or investing in forex, stocks, futures, and option. The answer thought, could very well be found in technical analysis. It,s been suggested time and time again, that technical analysis is indeed the most reliable method for trading the market.

Candle Stick Pattern


Bullish Pattern


Long white (empty) line. This is bullish line. It occurs when prices open near the low and close significantly higher near the period’s high

Hammer. This is bullish line if it occours after the significant downtrend. If the line occurs after the significant up-trend, it is called Hanging Man. A Hammer is indentified by a small real body (i.e., a small range between the open and closing prices ) and a long lower shadow (i.e., the low is significantly lower than the open, high, and close). The Body can be empty or filled-in.

Piercing Line. This is bullish pattern and opposite of a dark cloud cover. The first line is long black line and the second line is long white line. The second line opens lower than the first line’s low, but it closes more than halfway above the first line’s real body.

Bullish engulfing lines. This pattern is strongly bullish if it occurs after a significant downtrend (i.e, it acts as reverseal pattern). It occurs when a small bearish (filled-in) line is engulfed by a large bullish (empty) line.

Morning star. This is a bullish pattern signifying a potential bottom. The “star” indicates a possible reverseal and the bulish (empty) line confirms this. The star can be empty or filled-in.

Bullish doji star. A “star” indicated a reverseal and a doji indicates indecision. Thus, this pattern usually indicates a reverseal following an indecisive period. You should wait for a confirmation (e.g., as in the morning star, above) before trading a doji star. The first line can be empty or filled-in.