scalping candlestick patterns: 16 Must-Know Candlestick Patterns for a Successful Trade

forex and crypto

Usually, when I trade hourly master candles, I place my stop on the opposite side of the master candle. If the candle is too wide to maintain my risk parameters, I will place my stop in the center of the master candle. A break of a Master Candle on any time frame can be very profitable, but trading a break of a weekly Master Candle can be especially profitable. The January candle is bearish and when the price reaches the Fibonacci targets , it will have retraced back to the 38.2 and 50% Fib levels of the monthly candle. Now, let’s outline where to place our protective stop loss and where to exit our profitable trade. DTTW™ is proud to be the lead sponsor of TraderTV.LIVE™, the fastest-growing day trading channel on YouTube.

exponential moving

When you first start out on your trading journey, you will be bombarded left and right with new concepts. It can be daunting and confusing to assimilate everything. This trading tutorial will show you how to read candlestick charts for beginners. Long-term traders use the strategy to identify opportunities to buy or short. In fact, some chart patterns like cup and handle are only useful for traders with a long-term horizon.

Six bullish candlestick patterns

A more condensed scalping candlestick patterns can show noticeable and exploitable inclinations that can influence a trader to attempt a scalp if there are no trends in a longer time frame. Stock scalpers, on the other hand, will generally have a higher ratio of winning trades versus losing ones, and keep profits roughly equal or slightly larger than losses. Since scalping involves multiple trades per day, liquidity is also a vital aspect of scalping. Additionally, it ensures that traders get the best price possible when entering and exiting the trade.

Medium-term scalping is referred to active trading strategies with 5-10 minutes per trade, while conservative scalping is referred to 30 minutes per trade. If I were to handpick just 1 or 2 items in the checklist for scalping, it would be candlestick pattern and volume. Over the last 18 chapters, we have learnt many aspects of Technical Analysis. If you have read through all the chapters and understood what is being discussed, you are certainly at a stage where you can start trading based on Technical Analysis. The objective of this chapter is to help you get started by identifying technical trading opportunities. A common tactic is to spot support and resistance levels as well as trends on a time-based chart and plan entries with a tick chart.


If the lower EMA crosses above the higher EMA, it’s a bullish view, and if it crosses below, it’s a bearish view. In the chart below, the opening crossover on the 14th of July is avoided. It is better to avoid the last minutes for any trading activity. Entry and exit, including stop loss, can be on crossovers of the moving averages. The best way to learn to read candlestick patterns is to practise entering and exiting trades from the signals they give.

  • For example, if your goal is to make a $50 profit per trade 10 times per day, that is equal to about $500.
  • Whenever price breaks above the day high, it tends to reverse lower from there.
  • A successful scalper executes many such trades within the day.
  • The Engulfing has a bullish version called the Bullish Engulfing while the mirror opposite is the Bearish Engulfing.
  • What you’re seeing on the chart below is the raw price data that in Forex jargon is also referred to as the naked price action chart.

This suggests that, in the case of an uptrend, the buyers had a brief attempt higher but finished the day well below the close of the prior candle. This suggests that the uptrend is stalling and has begun to reverse lower. Also, note the prior two days’ candles, which showed a double top, or a tweezers top, itself a reversal pattern. A forex scalping strategy involves buying a currency pair at a low price and then re-selling for a profit, or vice-versa, often within a matter of seconds or minutes. Forex scalping is particularly effective across more liquid currency pairs with tight spreads. Bullish patterns may form after a market downtrend, and signal a reversal of price movement.

In such situations, the key is to ensure proper risk control and a plan to re-enter if possible. The candlestick pattern offered a neat stop-loss level that helped with risk control. A candlestick is a type of price chart that displays the high, low, open, and closing prices of a security for a specific period and originated from Japan. A spinning top is a candlestick pattern with a short real body that’s vertically centered between long upper and lower shadows. With neither buyers or sellers able to gain the upper hand, a spinning top shows indecision. Another key candlestick signal to watch out for are long tails, especially when they’re combined with small bodies.

Some of the candlesticks, however, do provide more value than others. These candlesticks have various names because they are of more importance than regular and “normal” candles. Bearish candlestick – These are red candles and it shows that the price has decreased over the selected time period. In other words, the closing price is lower than the opening price. After this happens, the scalper can open a trade in the opposite direction. Price action is a term that refers to the overall chart pattern of a financial asset.

Bullish/Bearish Engulfing Lines

It all really depends on your personal trading interests and goals. If you prefer quick trades and are eager to learn some new techniques, then, perhaps, scalping is for you. If you’re a novice, it might be a good idea to practice with a demo account until you are ready to dive into the real game. Traders who implement this strategy are referred to as scalpers.


An ideal approach is to choose the settings in comparison to a time-based chart. For scalping, charts with 34 or 50 ticks should best suit. As the time element gets eliminated with tick charts, you can test with different settings to find the right match. The benefit of using futures contracts is the easy availability of volume data for the effective use of tick charts.

Truth #4: You have to be aware of news release

The strategy increases the number of champions while surrendering the bulk of the wins. Trading Candlestick Patterns With RSI. As a trader, we have many things to analyze at any given time. If you take too long to decide whether it’s time to enter into a trade because of your complicated entry rules, it might mean a missed opportunity for you. 4 Exponential moving averages are there in the indicator with easy enable disable option. For MIS+ product, while placing order user places first leg order along with compulsory Stop loss trigger order (i.e second leg) & optional book profit trigger order . The second candle is key to indicating whether the pattern is bullish or bearish.


All other charges as well as taxes and other statutory/Exchange charges continue to apply. There is no AMC charged on Demat account for the first year. All other charges will apply as per agreed tariff rates.

Traders can execute scalp trades on both high and low sides. Scalping can be carried out with several common chart structures, like triangles and cups or handles. Similarly, a trader can make decisions based on technical indicators. This is a useful supplementary technique for dealers with more extended time frames. Using this when the trading market is rough or clasped in a tight range is the most obvious way.

In literature, is defined as a short-term trading style that helps to take advantage out small price changes as often as possible within a day. Experts identify scalping as a risky trading approach, which requires keeping an eye on the charts for the whole day. Therefore, a scalper must have steel nerves and follow the market carefully. It’s essential to know the tips on risk management and place entry and stop loss levels correctly. A self-confident newbie in scalping may turn into a loser if they does not have an algorithm for entering the market. Today, we will help you with this struggle and share some effective scalping strategies.

The best lookback period for a swing trader is 6 months to 1 year. The power of tick chart trading ultimately depends on individual preferences and tendencies. Some forex traders admit using tick scalping to make profitable entries. A scalp trade is better described as an assumption that most securities will complete the first stage of a movement in a short span of time.

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