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Candlestick Patterns: The Candlestick Trading Bible

Candlestick patterns provide a simple and effective way to analyze the market. The document discusses several candlestick patterns, focusing on the anatomy and psychology behind their formation to help readers learn to identify patterns and understand what they indicate about market dynamics and trader behavior. Mastering candlestick patterns is presented as an important skill that can help traders enter and exit the market at optimal times by following the movements of more experienced market participants.

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Gabriel Merola
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685 views

Candlestick Patterns: The Candlestick Trading Bible

Candlestick patterns provide a simple and effective way to analyze the market. The document discusses several candlestick patterns, focusing on the anatomy and psychology behind their formation to help readers learn to identify patterns and understand what they indicate about market dynamics and trader behavior. Mastering candlestick patterns is presented as an important skill that can help traders enter and exit the market at optimal times by following the movements of more experienced market participants.

Uploaded by

Gabriel Merola
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Candlestick patterns

Candlestick patterns are one of the most powerful trading concepts,


they are simple, easy to identify, and very profitable setups, a research
has confirmed that candlestick patterns have a high predictive value
and can produce positive results.
I personally trade candlestick pattern for more than 20 years; i can’t
really switch to another method, because i tried thousands of
strategies and trading methods with no results.
I’m not going to introduce you to a holy grail, this trading system
works, but be prepared to lose some trades, losing is a part of this
game, if you are looking for a 100% wining system, i highly recommend
you to stop trading and go look for another business.
Candlestick patterns are the language of the market, imagine you are
living in a foreign country, and you don’t speak the language.
How could you live if you can’t even say a word? It’s tough right???The
same thing when it comes to trading.
If you know how to read candlestick patterns the right way, you will be
able to understand what these patterns tell you about the market
dynamics and the trader’s behavior.
This skill will help you better enter and exit the market in the right
time.
In other words, this will help you act differently in the market and
make money following the smart guy’s footprints.
The candlestick patterns that i’m going to show you here are the most
important patterns that you will find in the market, in this chapter, i’m
not going to show you how to trade them, because this will be
explained in details in the next chapters.
What i want you to do is to focus on the anatomy of the pattern and
the psychology behind its formation, because this will help you get the
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THE CANDLESTICK TRADING BIBLE
skill of identifying easily any pattern you find in the market and
understand what it tells you to do next.
If you can get this skill, you will be ready to understand and master the
trading strategies and tactics that i’m going to teach you in the next
chapters.
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THE CANDLESTICK TRADING BIBLE
The engulfing bar candlestick pattern
The Engulfing bar as it states in its title is formed when it fully engulfs
the previous candle. The engulfing bar can engulf more than one
previous candle, but to be considered an engulfing bar, at least one
candle must be fully consumed.
The bearish engulfing is one of the most important candlestick
patterns.
This candlestick pattern consists of two bodies:
The first body is smaller than the second one, in other words, the
second body engulfs the previous one. See the illustration below:
This is how a bearish engulfing bar pattern looks like on your charts,
this candlestick pattern gives us valuable information about bulls and
bears in the market.
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THE CANDLESTICK TRADING BIBLE
In case of a bearish engulfing bar, this pattern tells us that sellers are
in control of the market.
When this pattern occurs at the end of an uptrend, this indicates that
buyers are engulfed by sellers which signals a trend reversal.
See the example below:

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