A Deep Dive Into Candlestick Patterns

7/18/23, 7:41 AM A Deep Dive Into Candlestick Patterns
A Deep Dive Into

Candlestick Patterns
In This Report
High Profit Candlestick Signals and Patterns
Stephen Bigalow, Candlestickforum.com
Award-Winning Candlestick Pattern Identifies Big Money Trading Opportunities

Rob Hoffman, BecomeABetterTrader.com
Candlestick Acceleration Pattern

J. Crawford, LearnToTradeForProfit.com
https://wealthempire.clickfunnels.com/a-deep-dive-into-candlestick-patterns 1/36
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High Profit Candlestick

Signals and Patterns
Stephen Bigalow, CandlestickForum.com
As long as buyers and sellers have been trading the markets, two predominant sentiments have been in play: fear and greed.
Centuries ago, Japanese rice traders developed the candlestick method to graphically depict trader sentiment. It has worked
successfully for hundreds of years, and still works today. Candlestick analysis can help you make better trading decisions
about investor sentiment in the markets.
The Japanese rice traders didn’t just become wealthy using candlesticks, they created legendary wealth trading a basic
commodity. This method works for any trading instrument as long as the basic human emotions of fear and greed are
involved – which pretty much covers every market.
Candlestick analysis prepares you to be ready for big price moves based on historic results of specific signals and patterns.
It’s simply a graphic depiction of investor sentiment. The Japanese rice traders gave us not only the benefit of knowing
what the signals look like, but they also described what the investor sentiment was behind each signal There are 50-60
signals to learn, but eight of the most successful candlestick signals will be discussed in this lesson.
The most beneficial thing about candlesticks is that they help identify trends.
But first, to help identify trends, you need a few indicators. Here’s what they are:
- Red Line: 200 day simple moving average (SMA)
- Blue Line: 50 day simple moving average
- Gray Line: 20 day simple moving average
These indicators are important because every money manager in the world uses these indicators to help them make
decisions when trading their portfolios.
The most important indicator is the T-Line, which is the 8 Exponential Moving Average (EMA). The T-Line has some
very simple rules:
- If you see a candlestick BUY signal ABOVE the T-Line, you are in an UPTREND
- If you see a candlestick SELL signal BELOW the T-Line, you are in a DOWNTREND
Stochastics are used to indicate overbought and oversold conditions. If you see a candlestick BUY signal in an oversold
condition, there is a strong probability that you are going to be going into an uptrend. Conversely, if you see a candlestick
SELL signal in an overbought condition, you are likely heading into a downtrend. The settings that I use for stochastics are
12,3,3. These settings have worked the best for what I do most of the time, which is swing trading.
Summing it up, if you plot the 200, 50, and 20-day Simple Moving Averages, along with the 8 Exponential Moving
Average, and stochastics set at 12, 3, 3 – then you are good to go. Let’s see how these indicators work with candlestick
patterns:
In this daily chart, the stochastics are in an overbought condition with candlesticks above the T-Line. Once they turn red
and break through the T-Line, a downtrend is established until a Morningstar pattern at the bottom triggers a reversal to the
upside.
The rest of this chapter will be devoted to the top bullish candlestick power signals. If you know them and can identify
them you will have a much better handle on identifying trader sentiment.
The Top Eight Bullish Power Signals

1. Your Best Friend
2. Left/Right Combo
3. Series of Doji’s
4. Candlestick Patterns followed by Gap Ups
5. Kicker Signal
6. Bullish Flutter Kicker
7. Steady Eddie Trends
8. Magnitude of a Signal
1. Your Best Friend
A Doji occurs whenever the market opens and closes at the same level during a particular time frame.
- Doji Star: Small price movement.
- Long-legged Doji: If the price movement is huge, but the bar closes where it opened.
- Dragonfly Doji: Where the price opens and closes at the top of the bar.
- Gravestone Doji: Where the price opens and closes at the bottom of the bar. It got its name from Japanese soldiers
pressing on in battle only to retreat back to camp.
A derivative of the Doji is the Spinning Top. Spinning Tops are characterized by short candle bodies with short wicks,
similar to the child’s toy. Spinning tops signal indecision between the bulls and the bears in the marketplace. When you see
a spinning top or Doji at the top, you want to consider taking profits. If you see them at the bottom, there’s likely to be an
uptrend.
A Doji in an oversold area, followed by a gap-up, gives you a very strong probability that you are about to enter a
strong uptrend. The beauty of candlesticks again is that they capture investor sentiment. When you are at the bottom of
the market in oversold territory, as indicated by stochastics, and a Doji appears, it signals indecision. If it is followed by a
strong gap-up, closing above the T-Line, then a strong uptrend is building.
One caveat to this strategy is that when the candlesticks start moving well above the T-Line, they are going to want to come
back to the T-Line, so you want to be prepared to take profits if necessary.
To summarize, here are the optimal criteria for the “Best Friend: scenario:
- Look for the signals
- Stochastics oversold
- Gap-up from the Doji signal. The bigger the Gap-up the stronger the uptrend
- Close above the T-LineNote:
At the end of this chapter, click on the YouTube presentation of this topic for many more examples of the “Best Friend”
bullish signals in action.
2. Left/Right Combo
The Left/Right Combo is a Doji followed by a bullish engulfing signal. The bullish engulfing signal completely
encapsulates the previous candle body. Since the Doji body is small, it represents a moment of indecision followed by a
clear bullish move. The Left/Right Combo is like a boxer setting up a small left jab with a roundhouse right punch. In this
example we have a small Doji, followed by a bullish engulfing signal and a strong upward move in the stochastics. Notice
there is a series of Dojis in this chart. If one Doji signals indecision, a series of Dojis indicates greater indecision. If you see
a strong candlestick buy signal, followed by a series of Dojis and the next bar gaps-up significantly, a strong bullish move
is in play, and you want to be buying.
3. Series of Dojis
Remember that a Doji represents indecision. If you see a series of Dojis it represents greater indecision. When you see a
series of Dojis setting up, and stochastics start moving up, with candlesticks closing above the T-Line, it signals a positive
open the following day and trigger to buy. Bear in mind, you still need to do your due diligence. Make sure to check the
pre-market futures the next day, and make sure there isn’t any economic or geopolitical news that could adversely impact
your decision to buy. But if the futures are moving in the same direction as your trend, it’s a signal to proceed and buy.
4. Candlestick Patterns followed by Gap-Ups
Any signal followed by a gap-up is a signal to buy. In this case, we have a hammer signal, followed by a bullish gap up.
Once the candles close above the T-Line along with a corresponding upward move in the stochastics, it signals a strong
buying trend.
When we see a gap-down in an oversold condition it’s just telling you that most people panic when the market is at the
bottom. How can you tell if the market is at its bottom? With candlestick patterns, once you see a gap-down in an oversold
condition, start looking for signs of a reversal. It could be a Doji, a series of Dojis or a gap-up reversal.
5. Bullish Kicker Signal
The strongest of all buy signals is the Bullish Kicker Signal. This is when the market is in a downtrend, and the
following bar opens in a gap-up above the previous day’s high. This pattern signals that investor sentiment has been kicked
the other way.
In this example, there is a significant gap-up above the previous day’s downtrend. The gap-up is well above the T-Line and
there’s a strong upward move in the stochastics. This signals a very strong change in investor sentiment.
Some traders are afraid to buy after a significant gap-up. They are afraid that they are buying at a high. Remember, if the
stochastics are rising and the candlestick is above the T-Line, then the upward trend is likely to continue. Bear in mind that
the further the candles drift north of the T-Line, the more likely they are to retrace and come back to it. Bullish kicker
Signals don’t require a gap-up as long as it is a significant move in the opposite direction of a downtrend, and it’s moving
above the T-Line with supporting stochastics. As a rule of thumb, the bigger the Bullish Kicker Signal is, the more
significant the move will be.
6. Bullish Flutter Kicker
A Bullish Flutter Kicker occurs when the market has a down day followed by an indecisive gap-up. If you see a Doji
gapping-up over the previous days open, it’s a signal that the market is showing some strength. If the market moves up the
next day over the previous days close and starts moving above the T-Line, it’s a signal that investor sentiment is moving the
market into an uptrend. If you remove the Doji from the picture, you would have a Bullish Kicker Signal with a strong gap-
up.
7. Steady Eddie Trends
When you see a gap up through a resistance, in this case, the 200-day moving average, it signals the start of a “Steady-
Eddie” trend, and it’s a great place to be. The candlesticks will ride above the T-Line for an extended period of time
signaling multiple opportunities to let profits ride. You can rest every night knowing that the market will continue to rise
until you see a close below the T-Line. Once again, the further the candlesticks drift above the T-Line, the more likely they
are to return to the T-Line. Once the Candlesticks start crossing back below the T-Line is when you need to start thinking
about making a course correction.
8. Magnitude of the Signal
The larger the signal, especially after a Doji, the more compelling the evidence is that there is a change in investor
sentiment. In this example, the candles formed a rounded bottom and broke above the 50-day moving average resistance
level, followed by a very large gap-up above the T-Line. Once a gap-up like this happens, the market will more than likely
form a 45-degree “Steady-Eddie” pattern, where the market churns upward above the T-Line.
Whenever you see a large gap in candlestick patterns as shown above, it’s a sign of a strong move. If you can identify it,
your earnings will multiply.
Summary
Candlestick patterns are a historical gauge of investor sentiment. They were developed centuries ago by Japanese rice
traders and they still work today. If you study these bullish candlestick patterns and can identify them, you will prepared to
act on decisive changes in investor sentiment. You will be in a much better position to enter into an uptrend, set stop/losses
and ride your profits to the upside.
The tools you need are simple and straightforward:
- The T-Line = the 8 Exponential Moving Average (EMA)
- 20, 50 and 200 Day Simple Moving Averages (SMA)
- Stochastic Oscillator (settings are 12,3,3)
Follow the rules in this lesson, and you will trade with better certainty. You will have a better handle on investor sentiment
and will know when to enter and exit a trade.
THE MOVIE
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About Stephen Bigalow

Stephen W. Bigalow possesses over twenty-five years of investment experience, including eight years as a stockbroker with
major Wall Street firms: Kidder Peabody & Company, Cowen & Company and Oppenheimer & Company. This was
followed by fifteen years of commodity trading, overlapped with twelve years of real estate investing. He holds a business
and economics degree from Cornell University, and has lectured at Cornell and at many private educational investment
functions over the past twenty years.
Mr. Bigalow has advised professional traders, money managers, mutual funds and hedge funds, and is recognized by many
in the trading community as the “professional’s professional.” He is an affiliate of the “Market Technicians Association”.
(mta.org – A non-profit association of professional technical analysts) and a member of AAPTA, the American Association
of Professional Technical Analysts. (aapta.us)
Back to Table of Contents
Award-Winning Candlestick Pattern

Identifies Big Money Trading Opportunities
Rob Hoffman, BecomeABetterTrader.com
The Hoffman Inventory Retracement Bar (IRB) Trade

Developed and used to win trading competitions around the world, the Hoffman Inventory Retracement Bar (IRB) Trade
has become one of the most popular ways to identify where short-term countertrend institutional inventory has subsided
and when it’s time to re-enter into a trade’s original trend direction. What you will learn here is how to identify when the
conditions arise to make the trade, the entry points, and exit strategy.
What is the Hoffman Inventory Retracement Trade (IRB)?

The IRB Trade is a strategy that is used to identify specific types of institutional trading activity that is counter to the
prevailing trend at hand, and then identify entries when the short-term countertrend inventory activity has come to an end
and the market is likely ready to resume’s its original trend.
While it is common folklore in the investment industry that institutions, like wolves, travel in packs, the reality is that
institutions are not all sitting around at a table conspiring as a group about how to part retail traders with their money. The
institutional investment business is extremely competitive and these firms are very much out for themselves and have their
own objectives and performance metrics to achieve to appear most attractive to prospective investors at any given time.
Therefore, this strategy is designed to identify when one or a handful of institutions are moving inventory in and out of the
market and are straying away from the markets current path causing a short-term retracement against the trend. We are
subsequently looking for the market in question to resume its preexisting trend when those short-term countertrend
institutional activities and inventories have dried up.
The Rules For The Inventory Retracement Bar (IRB) Identification

IRB Characteristics
In an uptrend – Look for candlestick bars that open and close 45% or more off their high.
Figure 1 shows four individual and unique examples of the IRBs in an uptrend for illustrative purposes
In a downtrend - Look for candlestick bars that open and close 45% or more off their low.
Figure 2 shows four individual examples in a downtrend for illustrative purposes.
Trend Identification
In the absence of the advanced trend identification systems Rob Hoffman uses, a simple approach to trend identification is
looking at the 20 EMA (Exponential Moving Average) and asking yourself if it appears to be in approximately a 45 degree
angle based on the timeframe you’re looking to trade over the 20 bars of data (i.e. 5 min., 60min, Daily, Weekly, etc.). The
next higher timeframe above the one you’re looking to trade should also be flowing in the same direction. For instance, if
you’re trading off of a 5 minute chart and it’s in an uptrend, you would like to see that your 10 or 15 minute chart also in an
uptrend. It should be flowing in the same direction. If it’s sideways, or worse yet, trending in the opposite direction, your
trade is much more likely to fail.
The Entry Strategy

Once an IRB and proper trend is identified, the next step is to allow the market to move along and wait for the price action
to break one tick/cent/pip below the low of the IRB in a downtrend. In an uptrend you’re looking for the market to break
one tick/cent/pip above the high of the IRB. While it is not an absolute, it is preferred that the price breaks beyond the IRB
within the next 20 bars based on the time period you’re trading. For example, if you’re trading off of a 2 minute chart, you
would ideally like to see the break in the next 40 minutes. In general, the sooner (i.e. the next five bars as an example) it is
better for trend resumption.
The Trailing Stop Exit Strategy

While many traders are specific dollar target traders, the preferred method is more of a support and resistance target based
methodology backed up by a trailing stop to ensure you are not giving back those profits during any snapbacks against your
position.
Typically, Rob Hoffman prefers a trailing profit stop moved up to 50% trailing of profit achieved when you’ve made it
50% of the way to the intended overall profit target. Then move the trailing stop to 80% of profit earned as you approach
80% of the way to your intended target. Then move the stop to 90%+ of profit achieved as the major support or resistance
target level is hit. At this point, if no further progression is made in price, then trail right to the current bid/offer with the
intent to exit. If one more spike of energy comes in to trap unsuspecting retail traders with a false breakout, we manually
trail immediately behind price during the spike until it pauses, then we’re taken out with profit. Either way a win-win
trading opportunity. Common major levels include key Fibonacci levels, previous day’s highs and lows, daily, weekly and
monthly pivot points, etc. For maximum comfort with the strategy, it is preferred that you use this with your own favorite
support and resistance levels.
Figure 3 Live Trade Example: Below the middle chart highlights in yellow the intended target, a pivot point. As we
approach 50% of the way to the target, we trail the stop to 50% of profit earned.
Figure 4 Live Trade Example: As we approach 80% of the way to the target, we trail the stop to 80% of profit
earned.
Figure 5 Live Trade Example: As we approach intended target we trail the stop to 90% of profit earned. This gives
the trade an opportunity to have one more false breakout move above the target that allows us to pull out a little
more profit.
Figure 6 Live Trade Example: If trade holds target and fails to break through we move stop to current bid/offer and
wait to be taken out of the trade. If one more spike of energy comes in to trap unsuspecting retail traders with a
false breakout, we manually trail immediately behind price during the spike until it pauses, then we’re taken out
with profit. Either way a win-win trading opportunity.
Figure 7 Live Trade Example: The bid was hit and the maximum profit achieved!
Stop Management
Based on the premise of this trading strategy, the expectation upon the entry is that the market will continue into the
original direction it was heading after its brief institutionally driven pullback against the trend. Very frequently, after
breaking through IRBs, the market will actually rapidly accelerate with fast action and wide ranges as everyone starts to
realize that the brief pullback was merely a pause by one or a few institutions against the intended direction as the market
moves to catch up with its original intent.
With that said, once a trade is entered, the price should not retrace back beyond the opposite side of the IRB. For instance,
if the trade is entered one tick/cent/pip below the low of the IRB in a downtrend, it should not stop and reverse to one
tick/cent/pip above the high of that IRB. If it does, that market may be forming more of a reversal pattern and thus the
need to exit the position and move on to the next opportunity or use one of Rob Hoffman’s phenomenal market reversal
strategies to capture the move.
When not to use the strategy

This strategy was primarily designed to identify and take advantage of trend continuations after counter trend institutional
inventory exhaustion. Therefore, this trade is not to be used in a sideways market conditions as continuation failure will
frequently occur.
Why This Strategy Works

In general, the market tends to trade directionally with as few retail traders on board the correct direction as possible.
This strategy is so effective due to its ability to find high probability areas where three things are happening to retail traders
in an uptrend:
1. Buyers are being distracted from taking long side trades when they see the pullbacks off the highs, scaring them into
believing the move is over.
2. During pullbacks, sellers are being given false hope that any shorts taken earlier in the uptrend may finally start to work.
3. Buyers who bought the high during rapid wide range ascents hoping it will go higher get stopped out on the pullback.
After all of these events above, once a new IRB to the upside appears and is pierced, the market is much more likely to
move without all of those traders above on the right side of the market.
In a downtrend these three things are happening to retail traders:
1. Sellers are being distracted from taking short side trades when they see the pullbacks off the lows, scaring them into
believing the move is over.
2. During pullbacks, buyers are being given false hope that any buy side trades taken earlier in the downtrend may finally
start to work.
3. Sellers who sold the low during rapid wide range descent hoping it will go lower get stopped out on the pullback.
After all of these events above, once a new IRB to the downside appears and is pierced, the market is much more likely to
move without all of those traders above on the right side of the market.
Used During International Trading Competitions

Figure 8 shows one of the seven trades taken using this strategy during the International Trading Competition held
in Paris, France. The black vertical arrow highlights the IRB and the black horizontal arrow shows the intended
area of entry for trades using this strategy.
Rob’s Strategy Checklist

1. Strategy Name: Hoffman Inventory Retracement Bar Trade (aka. Hoffman IRB)
2. Strategy Type: Trend Continuation
3. Time Frame: Intraday as well as daily and weekly signals
4. Setup: IRBs are created where the open and close of the bar are 45% or more off the low in a downtrend and 45% or
more off the high in an uptrend
5. Entry: One tick/cent/pip below the low of the IRB in a downtrend and one tick/cent/pip above the high of the IRB in a
uptrend
6. Stop-Loss: One tick/cent/pip above the high of the IRB in a downtrend and one tick/cent/pip below the low of the IRB
in a uptrend
7. Trailing Stop Exit Strategy: 50% of profit achieved until you approach a major support or resistance level, 80% trailing
when 80% to target, then move the stop to 90%+ of profit achieved as the major support or resistance level is hit.
8. Risk And Money Management: <1% per trade
9. Average Number Of Signals: Every instrument and time duration will be different based on its frequency of trending.
However for active traders as an example, in general, it is possible to see as many as 25+ IRB on a 2 minute chart over a 24
hour period.
Key Points To Remember

No more weight is given to any IRB based on whether its close is above or below the open (i.e. green or red candle).
In addition, think about the concept of over extension. If the IRB has an extraordinary range as compared to the Average
True Range of the last 10+ bars before it then the break back through the IRB is far more likely to fail. This will more
likely result in an entry that has a higher likelihood of reversion to the mean as much of the energy and profit opportunity
has potentially dissipated leaving the trader with a much smaller profit or perhaps a stop loss.
Trail your entries to reduce the risks of reversion to the mean while still giving a trade a chance to push into your intended
direction.
Use proven trend qualification tool like Rob Hoffman’s. In the absence of a well-tested tool of your own, trade in the
direction of an approximately 45 degree angled 20 EMA.
This strategy has very diverse applications across many markets and asset classes. For instance, in addition to trading
conventional equities, futures, options and FOREX instruments, traders can consider using this strategy to analyze
underlying equities and then trade high delta, in the money options plays as an example for active options day traders. So
very diverse indeed.
Conclusion
What we have shown you here is a simple, award winning strategy that you can take away and explore here today. Rob
Hoffman has used this tool to help him secure wins in many of his 19 domestic and international trading competition wins.
It is an excellent tool used for identifying where retail traders are misjudging the markets movement. It shows where one
or more institutions is temporarily breaking away from the trend due to short-term inventory acquisition or liquidation.
Once that inventory need is exhausted the overall market is free to resume the existing trend offering new opportunities for
retail traders to trade back in the direction with the overall trend.
THE SPECIAL OFFER

VIDEO: Watch Rob Hoffman's Award-Winning Strategy Here!
ABOUT ROB HOFFMAN

Rob Hoffman is the president and CEO of Become A Better Trader, Inc. and BecomeABetterTrader.com.
Expertise: STRATEGIES
Rob Hoffman is 19-time domestic and international trading champion trader who has won more live, real-money only,
domestic and international trading competitions than any other trader in the entire world.
Rob is also an internationally recognized professional trader, frequent speaker for top brokerage firms and financial
exchanges, skilled educator and passionate mentor to proprietary traders, portfolio managers, and hedge fund managers
from around the world.
Contact Rob at rob@becomeabettertrader.com or his team at support@becomeabettertrader.com. His office number is 847-
235-6131.
Candlestick Acceleration Pattern

J. Crawford, LearnToTradeForProfit.com
As I have often shared, the last thing a trader wants to be guilty of is chasing the market…
However, sometimes we do have the opportunity to capitalize on acceleration mid-move.
The candlestick pattern I want to show you today is often a good indicator of that type of acceleration.
[Speaking of patterns, My TOP 3 Price Action Pattern Report Can Be Downloaded Free Here]
It’s not a strategy in itself, but it will go a long way in your arsenal as a weapon for fast-moving, momentum-filled price
action.
What is momentum trading?

Momentum trading is piggybacking on a market moving strongly in one direction. The sharp move can be due to news,
another type of event or just market volume and volatility.
If you’re smart, you’ll avoid jumping into the market just because it’s moving fast and excitement is on the horizon. Yet,
quick moving markets are some of the best opportunities for strong returns in a short period of the time, so we don’t want
to stand idle and miss all of the potential.
In this article, I want to give you an acceleration pattern I often look for in these types of conditions.
Here’s the key:

The majority of traders who jump into momentum moves lose money because they get shook out of the trade…
Either they are so late that the market has a complete reversal or they simply jump into the market and can’t manage the
trade so they get whipped out even if it does end up going in their direction.
While this acceleration pattern is far from perfect and no strategy can eliminate the market knocking you out of a
potentially good trade on occasion, it does give you an opportunity to take advantage of high-profit potential conditions
with higher probability.
With this pattern, you can jump into the midst of a strong move and still know it is very likely that the market will continue
in your direction WITHOUT a big retracement which is key for being able to use a tight stop loss and still catch a portion
of the move.
In these examples, I’ll use a moving average as a guide as most of my readers prefer a visual aid to confirm direction. The
pattern itself, however, is based on price action.
The sample chart setup is shown below.
Defining the Pattern:

1. Three consecutive bars it should be above/below the 13 and the 20-period exponential moving average.
2. Prior to the signal bar, there should be a minimum of three bars forming consecutive higher highs and higher lows (or
lower lows and lower highs in a downtrend)
3. Our acceleration signal is the first bar that makes a lower high in the sequence (in an uptrend)
4. Once we see the “dip” we can potentially place an order to buy one tick above the high of the signal bar. If the next bar
breaks out above the signal bar, our order is filled and our trade is live.
5. The low of the signal bar would be the stop loss for the trade.
6. However, if the bar after the signal bar doesn’t move one tick higher than the signal bar, our trade doesn’t get filled and
we abandon the setup and start afresh.Here’s an example:
Entry, stop loss and exit rules

1. For long positions, we place a buy order one tick above the high of the signal bar.
2. If the next bar to the signal bar doesn’t trigger the trade, we abandon the setup, because, many times, a break in
momentum can lead to a consolidation or a reversal. Hence, we want to enter only when the momentum reasserts itself
after a pause of one bar.
3. The initial stop loss for the trade is just below the low of the signal bar.
4. As long as momentum continues, you may choose to trail the stop loss 1 bar behind the current live bar or simply keep
an eye on the trade and click out when you see momentum fading.
Why does this pattern work?

Once price is above the short-term moving averages, it signals a trend. Three consecutive bars with higher highs and higher
lows, signal a momentum build up.
Intraday traders and scalpers tend to take profits when they get a windfall. On the other hand, the short sellers are looking
to short, as they believe that the trade is overextended.
The market LOVES to crush over-aggressive reversal traders which is often why we see a short, small pause before an
additional run that kills those positions.
Being on the other side gives us a quick momentum-filled trade in our direction.
Example of a short trade

This setup works equally well in a falling market as it does in a rising market, as shown in the chart below:
The EUR/USD starts to drop and we get our signal bar after three consecutive bars, which make lower lows and lower
highs. Our signal bar doesn’t make a lower low. We place a sell order one tick below the low of the signal bar, which gets
filled and our trade is live.
Our initial stop loss is one tick above the signal bar. We trail our stops higher and book profits when our price objective is
met.
A few more examples

An example of a trade which did not meet our rules, hence, was filtered out.
At times, the next bar after the signal bar fails to break above the signal bar, as shown in the chart above. According to our
rules, we leave the trades and don’t chase them.
Sure, sometimes they still work out wonderfully like above… But we’re simply playing the odds with this setup and the
percentages say that a break of the high from the next bar increases the odds of a higher run up. Another example of a long
trade:
The set up not only works on currency pairs, it works equally well for stocks exhibiting momentum, as shown in the charts
below.
Long setup on the 5-minute chart of Apple:
An example of a long setup on the 15-minute chart of Facebook:
A quick roundup...
This is a pattern best suited for momentum markets. Spotting the pattern is pretty straight-forward with a little practice.
1. Set up the chart with 13 and 20-period exponential moving average.
2. For long trades, the price should be above both the moving averages.
3. Look for three successive bars which form higher highs and higher lows. This confirms momentum and trend.
4. Now look for the bar, which fails to make a higher high in the sequence of the trend. This will act as our signal bar.
5. As soon as we locate the signal bar, we place a buy order one tick above the high of the signal bar.
6. The next bar after the signal bar should move higher and fill our trade. If it does, our trade is live.
7. We place the stop loss, one tick below the low of the signal bar.
8. Our target is to take profits when price reaches two times the initial risk.
Important final notes...

Note that this is a potential opportunity and not a strategy unto itself.
That’s because I am giving you a narrow look at a price action signal. I don’t know all the other conditions of a given pair
or instrument.
I don’t know the longer term trend, key support and resistance areas, etc.
So this is simply a pattern to look out for and NOT a strategy you should use as stand alone.
That said, once you get good at identifying this pattern in momentum markets, I think you’ll be able to utilize it with your
strategy very effectively.
Get My TOP 3 Price Action Pattern Report Here!
About J. Crawford
I am an investor who's been able to greatly improve my net worth by not just earning a paycheck but putting
that money to work through various investments. I am a very strong believer in putting your money to work,
multiple streams of income and viewing your personal finances like a business that needs to be streamlined,
optimized and constantly audited so that you can boost your net revenue as an individual. It's with that
attitude that I approach my own life and I hope I can empower others to do the same with their own financial
situations.
If you have any questions or feedback for me or regarding my website, feel free to contact me:
JCrawford@learntotradeforprofit.com

A Deep Dive Into Candlestick Patterns

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A Deep Dive Into Candlestick Patterns

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7/18/23, 7:41 AM A Deep Dive Into Candlestick Patterns

A Deep Dive Into

Award-Winning Candlestick Pattern Identifies Big Money Trading Opportunities

Candlestick Acceleration Pattern

High Profit Candlestick

- Red Line: 200 day simple moving average (SMA)

- Blue Line: 50 day simple moving average

- Gray Line: 20 day simple moving average

The Top Eight Bullish Power Signals

4. Candlestick Patterns followed by Gap Ups

6. Bullish Flutter Kicker

7. Steady Eddie Trends

1. Your Best Friend

- Doji Star: Small price movement.

- Look for the signals

- Close above the T-LineNote:

4. Candlestick Patterns followed by Gap-Ups

5. Bullish Kicker Signal

6. Bullish Flutter Kicker

7. Steady Eddie Trends

8. Magnitude of the Signal

The tools you need are simple and straightforward:

- The T-Line = the 8 Exponential Moving Average (EMA)

- 20, 50 and 200 Day Simple Moving Averages (SMA)

- Stochastic Oscillator (settings are 12,3,3)

Get the Major Signals Education Package for Just $12!

About Stephen Bigalow

Back to Table of Contents

Award-Winning Candlestick Pattern

The Hoffman Inventory Retracement Bar (IRB) Trade

What is the Hoffman Inventory Retracement Trade (IRB)?

The Rules For The Inventory Retracement Bar (IRB) Identification

Figure 2 shows four individual examples in a downtrend for illustrative purposes.

The Entry Strategy

The Trailing Stop Exit Strategy

When not to use the strategy

Why This Strategy Works

In a downtrend these three things are happening to retail traders:

Used During International Trading Competitions

Rob’s Strategy Checklist

2. Strategy Type: Trend Continuation

3. Time Frame: Intraday as well as daily and weekly signals

8. Risk And Money Management: <1% per trade

Key Points To Remember

THE SPECIAL OFFER

ABOUT ROB HOFFMAN

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Candlestick Acceleration Pattern

However, sometimes we do have the opportunity to capitalize on acceleration mid-move.

What is momentum trading?

Here’s the key:

The sample chart setup is shown below.

Defining the Pattern:

Entry, stop loss and exit rules

Why does this pattern work?

Example of a short trade

A few more examples

Long setup on the 5-minute chart of Apple:

An example of a long setup on the 15-minute chart of Facebook:

1. Set up the chart with 13 and 20-period exponential moving average.

Important final notes...

Get My TOP 3 Price Action Pattern Report Here!

Back to Table of Contents

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