Candlestick Forum

Boot Camp

„High Profit Patterns

Why is it important
to know the
patterns?

Eliminates
emotions

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 Advanced Candlestick Patterns

¾ Fry Pan Bottom

¾ Dumpling Top
¾ Cradle Pattern
¾ Jay-
Jay-Hook
¾ Scoop Pattern
¾ Belt Hold
¾ Breakout Patterns

High Probabilty Patterns

„ Pennants
„ Channels
„ Fibonacci
„ Distance from MA’
MA’s
„ Double Bottoms/Tops

Fry Pan Bottom

„ The downtrend starts waning
with the appearance of small
trading bodies
„ As the trend starts slowly
curling up, a gap up in price
indicates that strong buying
sentiment has now returned

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 Fry Pan Bottom

Long Rounded Curved bottom

Fry Pan Bottom – minutes, days, months

The indecisive rounding bottom is the predominant factor

Fry Pan Bottom - Past Analysis

Big Percent move at top has a different

meaning when a pattern can be identified

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 Fry Pan Bottom measuring point

A dimple usually marks

the Halfway point

Fry pan bottom

Fry Pan Bottom - Dollar analysis

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 Fry Pan Bottom expectations

Should not have breached bottom

curvature

Fry pan Bottom – Failure

Fry Pan Bottom – where to buy?

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 Fry Pan Bottom with MA confirmation

Fry Pan Bottom - A Break Out or Failure?

Easy identification of a failure, which

makes for easy stop loss procedures

Fry Pan Bottom can become a Cup and Handle

CUP Handle

Or a J-hook pattern

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What shows a Fry Pan Bottom failure?

Fry Pan Bottom – Exuberant buying

Want to see break out buying

Fry Pan Bottom –What to expect?

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 Fry Pan Bottom – What is expected?

Opposite the Fry pan Bottom

Dumpling Top

The Dumpling Top- an identifiable characteristic

Lousy trading atmosphere

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Cradle Pattern
• The Cradle Pattern is a symmetric
bottom pattern that is easy to
identify.
– A downtrend becomes obvious
with a large black candle at the
bottom.
– A series of small or indecisive
trading days trade in a flat area.
– A bullish candle, more powerful
with a Bullish Engulfing signal, is
formed of approximately the same
magnitude as a Bearish candle at
the end of the downtrend.
• This signifies that the Bulls have
come out of the indecisive trading
area with decisive force.

Cradle pattern

Cradle Pattern

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 Cradle Pattern

Cradle pattern

Cradle Pattern at the MA’s

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 Cradle pattern

Cradle Pattern

What is expected after a Cradle pattern?

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 Jay Hook Pattern
• The first move of the
uptrend is very strong.
• A candlestick sell signal
indicates a pullback about
to occur.
• After a few days, small
indecisive candles start to
appear
– Doji, small Hammers,
Bullish Engulfing signals

Jay Hook Pattern

• The first test becomes the
recent high
• Indecision as found in
candlestick sell signals at
the recent high becomes
a quick indicator to get
out of the position
• A Bullish candle
breaching the recent high
illustrates that investor
sentiment is taking prices
up

Jay Hook Pattern

• How to differentiate between profit taking

and a full-scale reversal.

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 J-hook

Jayhook patterns build strong trends

What’s identifies a Jayhook pullback?

Indecisive trading

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 Jay Hook

J-Hook – How to Identify

The pull back is stopped when

Candlestick buy signals appear

Stochastics do not get to the

Oversold area

J-hook - what is first criteria?

A strong price trend

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J-Hook – What forewarns a possible J-Hook?

Bearish Harami says to sell

J-Hook with added confirmation

Indecisive trading at a major moving average

Adds more evidence of a J-hook pattern potential

J-Hook – Easy Expectations

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 J-Hook Relatively Quick Pull Back and Reversal

J-hook - No Decisive selling on the pull back

Selling did not show any confirmation

J-Hook – The signals make identifying easy

A hammer , an Inverted Hammer, then bullish confirmation

Sets up for easy entry and exit strategies

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J-Hook – what is next target?

Bearish J-hook

Scoop Pattern

• An extended flat
trading area
– Followed by a pullback
• Buy signals bring
price back up to flat
trading range
• Once price breaks
above flat range, look
for strong uptrend

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 Scoop Pattern formation

Scoop Pattern- Completed

Scoop Pattern

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 Scoop pattern

Scoop pattern off the MA’s

Scoop pattern - Do not scan for a Scoop

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 Scoop pattern Use it to analyze

Scoop Pattern - What should happen upon confirming?

Scoop Pattern - A strong trend to potential targets

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Scoop pattern - And if it doesn’t work

Scoop – where are the targets?

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 Scoop – Where are the targets?

Longer term chart makes shorter term chart easier to read

Scoop = Targets

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 Belt Hold Pattern
• Strong prevailing trend
• The candlestick body
should be the opposite
color of the prevailing
trend
• Gap on the open,
continuing the trend
• The open is the high or
low of that trend
• The length of the body
should be a long body.

Belthold

Belthold - Adds strength to existing trends

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Belthold – shows the sellers are flushed out

Belthold – gets rid of the last of the sellers

Belthold

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 Belthold

Belthold Bearish

Belthold

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Belthold – Act as good continuation patterns

Belthold works for Funds

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 Breakout Patterns

„ Knowing when to get on board

and when to take profits.

Breakouts

Breakouts

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 Break Out or gap up at top?

Breakout? What is previous chart showing?

Breakout when is the profit taking over?

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 Breakout – where to buy?

Breakouts tell you something

Analyzing The
Market

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 DOW what pattern?

DOW – where could it go?

DOW where can it go?

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 Where did it go?

Trendlines are watched by everybody

Gold

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 Trading Gaps

• Gaps represent enthusiasm to get into a position

to the point that investors will pay prices away
from any of the previous day's trading range.

• Great for identifying panic selling at the bottom

and exuberant buying at the top.

Gaps – when they are meaningful

Gaps – with signals at major technical levels

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 Gaps – or they can be very obvious

Gaps – Doji followed by a gap down, get out asap

Gaps – when to get out, when to watch gor buy signals

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 Gaps – at bottom, look for the signals

Gaps – Kickers signals are the strongest signals

The Gap is built into the signal

Trading
Channels

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Trading channels – signals that tops and bottoms

Trend channels

Trading channels -- breakout

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Trading channel -- breakout

Trading channels – buy and sell points

Pennant
breakouts

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Pennant breakouts – which direction

Pennant breakouts

Pennant breakouts

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 Pennant breakouts

Double
Bottoms

Why is this bottoming action significant?

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What does a double bottom due to the bears psyche?

The Bulls liked this area before

The Bulls like this area before

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 Double Tops tell the same story

Moving Averages -
Magnets

MA’s support and targets

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 MA’s act as magnets

MA’s and patterns

MA’s once breached , will come back and test

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 MA’s Targets

MA’s – first attempts usually fail

MA’s once breached , act as support

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 Targets – when pattern is identified

GAP

Fry Pan Bottom can become a Cup and Handle

CUP Handle

Or a J-hook pattern

Wave 1-2-3

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 The T-line

Why is it
important to know
the patterns?

It prepares you
to react to an
expected
results

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