Candlestick Patterns

When HODLing, maintain a focus on just two candlestick patterns. You can research other candlestick patterns if you want to via  Google or by referencing my Gravity course. 

 

  1. A long wick (also commonly called a tail) signifies a reversal. Looking at the picture below, notice the wick low that occurred after a period of consolidation. This was a very bullish sign. Typically the larger the wick, the more likely the reversal in the opposite direction. 
  2. A strong momentum candlestick tends to lead to a short-term continuation in that direction. In the picture below, take a look at the strong bullish candlestick that occurred midday on the 8th and on the 11th — and notice how price continued to rise in both examples (albeit far more on the 11th).

 

More importantly, instead of using sheets of candlestick patterns to see what ranks as bearish or bullish — look out instead for signs of strength and weakness of the current trend. For example, if you see multiple wick lows on high volume in a range that would be considered quite bullish in the short-term as it shows the weakness of the sellers at price lows. 

 

 

The chart above is a good example of how multiple high volume wick lows eventually led to a strong upmove that was around 10% from low to high. 

 

However, between chart patterns, candlestick patterns, and volume patterns I have found chart/market structure patterns and volume patterns more specifically to be the best predictor of price. The next section will go over a more in-depth look into market structure with a focus on trend analysis. 

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