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 The Morning Star For the sake of simplicity, a bearish candlestick is one in which the stock's closing price is lower than its opening price, meaning that the price has fallen during the day. In contrast, a bullish candlestick is one where the closing price is higher than the opening price because the price has risen throughout the day. With that in mind, let us know as we take a closer look at the construction and key features of this popular candlestick pattern. What is the difference between Morning Star and Evening Star candlestick patterns? The main difference between the Morning Star and Evening Star candlestick patterns is that the Morning Star is considered a bullish indicator, while the Evening Star is considered a bearish indicator. The Evening Star has the center candle at a higher high than the two side candles with a gap up followed by a gap down, while the Morning Star has the center candle at its highest low with a gap down followed by a gap up. An example of a morn...

  What is a Bullish Engulfing Pattern? A bullish engulfing pattern is a white candlestick that closes above the previous day's open after opening below the previous day's close. It can be recognized when a small black candlestick indicating a downtrend is followed the next day by a large white candlestick indicating an uptrend, the body of which completely covers or engulfs the body of the previous day's candlestick. A bullish engulfing pattern can be contrasted with a bearish engulfing pattern. With a single candlestick pattern, the trader only needed one candlestick to spot a trading opportunity. However, when analyzing multiple candlestick patterns, the trader needs 2 or sometimes 3 candlesticks to identify a trading opportunity. This means that the trading opportunity develops for at least 2 trading sessions. What Is a Bullish Engulfing Pattern? To find bullish engulfing patterns, look for these two candlesticks side by side: A small red candlestick, usually at the end ...

WHAT IS A PIERCING PATTERN? The piercing line pattern is considered a bullish reversal candlestick pattern at the bottom of a downtrend. This often results in a trend reversal when bulls enter the market and push prices higher. The piercing pattern features two candles, with the second bullish candle opening lower than the previous bearish candle. This is followed by buyers pushing prices past the 50% bearish candlestick body . How a Piercing Pattern Works A piercing pattern has two days where the first day is decidedly influenced by sellers and the second day is answered by enthusiastic buyers. This may indicate that the supply of shares that market participants are looking to sell has dried up a bit and the price has fallen to a level where the demand to buy shares has increased and increased. This momentum appears to be a reasonably reliable indicator of a short-term bullish outlook. How to identify Piercing Patterns? First of all, it should be considered that the pattern formulatio...

What is the hammer candlestick pattern? When the opening and closing prices are almost the same, it shows that the bulls have taken control of the prices. Since Hammer is a bullish reversal chandelier model, it should form at the end of a downtrend. The long shadow below shows that the bears initially pushed prices too low near the support. But then the bulls came along and eventually pushed the price higher and closed above the opening price. There is a difference between the hammer and the inverted hammer in terms of training. The inverted hammer candlestick is the inverted version of the hammer. What does the hammer candlestick pattern tell you? As seen above, Hammer forms after the stock price falls, indicating that prices are trying to bottom out. The hammers indicate that the bears have lost control of the prices, which suggests a possible reversal of the uptrend. It should be noted that this candle should form after 3 or more bearish candles as it gives more confirmation. Confir...

 The 3 Most Powerful Candlestick Chart Patterns Candlestick charts are a technical tool that groups data from multiple timeframes into individual price bars. This makes them more useful than traditional open-high, low-close bars or simple lines connecting closing price points. Candlesticks form patterns that predict the direction of prices when they end. Proper color coding adds depth to this colorful technical tool, which dates back to 18th-century Japanese rice traders. Steve Nison introduced Japanese candlestick patterns to the Western world in his popular 1991 book, Candlestick Charting Techniques.1 Many traders today can identify dozens of these patterns, which have colorful names like bearish cloud cover, evening star, and bearish cloud cover. three black ravens. Additionally, single bar patterns including Doji and Hammer have been incorporated into dozens of long and short trading strategies. 1. Spinning Top When trading stock markets or other liquid and risky asset classes,...

What is the relationship between PPO and MACD? The PPO is almost identical to the moving average convergence divergence (MACD) technical indicator. Both are momentum oscillators, which measure the difference between the two moving averages. However, there are differences between the two listed below: Difference between the two, PPO and MACD Here, the PPO measures the percentage difference between the two EMAs, while the MACD measures the absolute difference (in dollars). MACD(12,26,9) calculated the absolute difference between the 12-day and 26-day EMA. On the other hand, PPO(12,26,9) MACD goes a step further by showing the percentage difference between these two MAs. Percentage Price Oscillator (PPO) Formula and Calculation Use the following formula to calculate the relationship between two moving averages for a holding. PPO=  26-period EMA 12-period EMA−26-period EMA ​ ×100 Signal Line=9-period EMA of PPO PPO Histogram=PPO−Signal Line where: EMA=Exponential moving average ​Use wi...

Balance of Power (BOP) It is an oscillator that measures the strength of the buying and selling pressure. The Balance of Power indicator is a technical analysis tool. It constantly measures the balance between the market power of buyers and sellers. This helps traders determine the prevailing mood at the moment. Traders can use this indicator to: When the indicator is positive, the bulls are in control; and sellers dominate when the indicator is negative. A reading near the zero line indicates a balance between the two and may indicate a trend reversal. History The Balance of Power (BOP) indicator was developed by Igor Livshin and later presented to the public through Stocks and Commodities magazine in 2001. The BOP measures price trends by measuring the strength of buyers and sellers in the market and determining what prices reach extreme ups and downs. Calculations To calculate the force ratio, use the following formula: Balance of Power = (Close Price - Open Price) / (Hi...

  What Is the Accumulation Distribution Indicator? The A / D metric attempts to identify discrepancies between stock price and volume flow. This gives an indication of the strength of a trend. If the price rises but the indicator falls, it suggests that the volume of purchase or accumulation may not be enough to support the rise and that a fall in price may be imminent. This is how this indicator works 1The actual value of the accumulation distribution is not important. Focus on your direction. 2If the price and the accumulation distribution reach higher highs and lows, the uptrend should continue. 3If the price and the distribution of the accumulation reach lower highs and lows, the downtrend should continue. 4If the accumulation distribution increases in a trading range, accumulation can occur and is a warning of a breakout to the upside. 5If the accumulation distribution falls during a trading range, a distribution can occur and is a warning of a breakout to the downside. The ac...

 Definition and Use of the Aroon Indicator The Aroon indicator was developed by Tushar Chanda in 1995. Tushar chose this name because the indicators are supposed to reveal the start of a new trend. The Aroon indicator is similar to other momentum oscillators in terms of when the market enters a trend. It becomes more effective in confirming signals or conditions identified by additional technical analysis. Calculation of Aroon Indicators Calculating Aroon metrics is not as complicated as you might think. It simply requires that the high and low prices of an asset be tracked for the number of periods used in the formula. As mentioned above, almost all of the 25 periods of use are recommended by Tushar Chande. Track the ups and downs in the asset price over the last 25 time periods. Note how long it has been since the last high and low. Use these numbers in the Aroon-Up and Aroon-Down formulas below. Aroon-Up = ((25 days from 25-day max) / 25) x 100 Aroon-Down = ((25 days from 25-day...

  Harmonious patterns in the currency markets. Harmonious price patterns identify the phases of a pullback so that once the pattern completes, you have a clear signal to buy or sell. Retracements are boring at any time, and any help is always welcome, although, with harmonic trajectory patterns, the orthodoxy is to apply for Fibonacci numbers. Again, Fibonacci numbers are not a proven theory and in fact, there is a lot of evidence that Fibonacci numbers only appear as often as chance allows in stock prices, forex included. However, when a perfect or near-perfect Fibonacci number appears, many traders will see it and get the expected result, so Fibonacci-based trading ideas are not worth dismissing. How can these harmonious patterns help you improve your trading strategy? Depending on the reason (each reason can tell a different story), they can be a clue to: Reversal Pattern - Predicts that the price will reverse and move in the opposite direction. Reason for continuation: predicts...