Price action

Market analysis using Japanese candles is a popular non-

indicator trading method on the world market. Its advantage is its
simplicity. You only need to wait for the required candlestick to appear on
the chart of your currency pair and then open a trade to sell or buy. To
interpret patterns, you only need to know the most popular ones.
What candlestick combinations have proven effective?
The “Engulfing Model” pattern
The engulfing model is mainly a reversal pattern that helps you
determine trend reversals. It looks like two candles, the first of which is
small and the second is large, with a body larger than the previous
candle, and it is pointing in the opposite direction.
Operating rules:
To enter the market, you need to have the “engulfing” model formed on
the chart. The appearance of a “powerful” candle which swallows the
previous one and closes in the opposite direction, marks the beginning of
a new, strong trend. This is the signal to enter the trade. The color of the
candle that absorbs the previous one indicates the direction of the trade
A red candle is a down trade, a green candle is an up trade.
Trade UP
• We are waiting for the emergence of a “powerful” candle that swallows
the previous one and closes in the opposite direction.
• We enter the trade in the direction of the candle.
Trade DOWN
• We are waiting for the emergence of a “powerful” candle that swallows
the previous one and closes in the opposite direction.
• We enter the trade in the direction of the candle.

The body of the second candle must be of a different color and

direction. The shadows don’t have to be engulfed, but the signal will be
considered weaker.
The “Pin Bar” pattern
The Pin Bar (aka Doji and Hammer in the Japanese
interpretation) is one of the most important reversal figures in candlestick
analysis. It is a candle with a long shadow whose size exceeds the body
by two or even three or four times. The opening price is practically no
different than the closing price in either direction. Such a candle looks
like this:
The color of the pin bar which engulfs the previous one indicates the
direction of the trade
A red candle is a down trade, a green candle is an up trade.
Operating rules:
To enter the market, you need three candles formed on the chart. Pin Bar
is the second candle of the three.
Trade UP
• We are waiting for the emergence of a “powerful” candle that swallows
the previous one and closes in the opposite direction.
• We enter the trade in the direction of the candle.
Trade DOWN
• We are waiting for the emergence of a pin bar.
• We are waiting for the closing of the candle that appears after the pin
bar.
• Entering a trade DOWN.
We don’t forget to wait for the closing of the candle which follows the pin-
bar and only then do we enter the trade.

The "Three Candles" pattern

The “Three Candles” pattern is suitable for beginners and is intended for
trading on absolutely any currency pair. Despite its versatility, it was
observed through experimentation that the best possible results occur if
you follow the basic rules of money management.
Operating rules:
To enter the market, you need three candles of the same direction, one
after the other, to form on the chart. That is, in order to consider doing a
DOWN trade, it needs to be preceded by the formation of three
downward candles in a row (red). The same goes for UP trades. If you
see three ascending candles (green) following each other, then an UP
trade is possible.
Аналогично и со сделками ВВЕРХ. Если вы видите три восходящие
свечи (зеленый цвет), следующие друг за другом, то возможна
сделка ВВЕРХ.
Trade UP
Three ascending candles (green) following each other.
Trade DOWN
Three downward candles (red) following each other.