Posted in Australian dollar, Candles, Japanese yen, tagged aud, aussie, buy signals, candle patterns, evening star, forex, hammer, harami, jpy, yen on January 30, 2008|
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Candle hunting sounds like some sort of freaky hobby, when really we’re talking about looking for candle patterns.
The AUD/JPY has had a couple in recent bearish bounces.
First off, to be clear, the trend is down and that’s the mood we want to be in here (… not down, but bearish) Name of the game is to find a bearish signal.
Candles are NOT the entry signals. They do not supersede the studies and are not stronger, technically, than either the studies or support and resistance.
Candles are meant to be little helper bees, confirming other stuff. If you get a signal, it is more powerful accompanied bya candle pattern.
Case in point, if using the MACD and Stochastics, they both rounded lower heading for red arrows as the price bounced down from resistance recently. There’s an entry signal. They were accompanied by a beautiful evening star (first green oval on the price) and by a so-so harami (second price oval). I put ovals on the studies showing the entry signals that occurred with them.
Hopefully we will see some another candle pattern with a bounce down in the next day or two. The candle pattern that just happened today? A hammer.
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Posted in British pound, Candles, Japanese yen, tagged candle, candle pattern, forex, gbp, gbp/jpy, jpy, pound, reversal, tweezer, tweezer bottom, yen on November 14, 2007|
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A group of you students and I were talking about this today in the Advanced Currency 6 (advanced news analysis) trading room earlier in the morning. The GBP/JPY closed through the half-way point on its long candle yesterday, and has now risen even more. When we talked about this, the pair was going up a lot but was far from where it is now.
When two long bars lay side-by-side and are opposite, and the high or low (in this case) are about even, that is a potential reversal. I’ve found them to work pretty dang good. In this instance it’s very bullish. Tweezers are rare, but you see them from time to time on the GBP/JPY. I trade them on an hourly chart so I be sure to trade with the trend and manage my risk well.
In the chart below, I highlighted the tweezer in green.
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