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+ 7 Key IQ option Best Candlestick Reversal Patterns Strategy

Ultimate Candlestick Strong Reversal Pattern

One of the tricks and binary option trading strategies and forex is read the price movement by candlestick reversal patterns.

Reversal candlestick patterns is the emergence of two or more candlestick formation which indicates impending reversal of the direction of price movement.

By knowing the appearance of candlestick formations that included a reversal candlestick pattern, traders can use it to perform an execution of open trading positions.

For example, with the emergence of the evening star candlestick reversal pattern, then the next likely price movement will turn the direction of the previous uptrend into a downturn.

This article will explain reversal candlestick patterns ranging from the morning star to harami candlestick reversal pattern.

According to direction reversal candlestick patterns are divided into two, namely:
  • Bullish reversal candlestick Pattern
  • Bearish reversal candlestick Pattern

 Candlestick patterns based on the number of a candlestick formations grouped into four, namely:
  • Candlestick reversal Patterns level 1
  • Candlestick reversal Patterns level 2
  • Candlestick reversal Patterns level 3
  • Candlestick reversal Patterns level 4
Directly just about anything, including candlestick reversal patterns?

CANDLESTICK REVERSAL PATTERN LEVEL 1


Candlestick Reversal Pattern Level 1 is the most reliability candlestick patterns and rarely requires confirmation.

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Following reversal candlestick patterns as trading strategies and forex binary on the IQ option:


1. EVENING STAR
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A Bearish Reversal Pattern type: Level 1

Description:
  1. Bullish candle with a body length appears on the uptrend.
  2. The next Candle is a short body candle (can be either bullish or bearish candle), gap up between the body of the candle and the candle body do not overlap.
  3. The third Candle is a bearish candle with a body length of and more robust if the gap down.
Psychology:

When the market is experiencing an uptrend, the existence of a gap up adds to the belief that the uptrend will continue.

The buyer is able to control the time of the early session, but they were not able to retain so that the session ended with a short body candle.

The next session even as the market moves in the opposite direction and back down to the body first candle so that shows the seller began to take control.

Note:
  • Increase the volume on the third candle can further confirm the impending reversal.
  • If there is a gap down between second and third candle body, then the possibilities are bearish.

2. MORNING STAR
magic candlestick reversal pattern

Type: Bullish Reversal Pattern Level 1

Description:
  1. A long Bearish candle with a body appears when downtrend.
  2. The next Candle is a short body candle (can be either bullish or bearish candle), gap down between body and body candle candle does not overlap.
  3. The third Candle is a bullish candle with body length.

Psychology:

When the market is undergoing a downturn, the existence of a gap down adds to the belief that the downtrend will continue.

Sellers were able to control early, but they were not able to retain so that the session ended with a short body candle.

The next session of the market move in opposite directions and even rose to the first candle body.

Note:
  • Increase the volume on the third candle can further confirm the impending reversal.
  • If there is a gap up between second and third candle body, then the bullish possibilities.

3. The BEARISH ABANDONED BABY
candlestick pattern reversal bearish

A Bearish Reversal Pattern type: Level 1

Description:
  1. A Long Bullish candle with a body appears when an uptrend.
  2. The next Candle is a doji and gap up.
  3. The third Candle is a bearish candle with body length and gap down.

Psychology:

When the market is experiencing an uptrend, the existence of a gap up adds to the belief that the downtrend will continue.

But it turns out there is no dominant between buyer and seller so formed doji.

The next session even as the market moves in the opposite direction and even down to the body first candle.

Note:
  • Increase the volume on the third candle can further confirm the impending reversal.

4. The BULLISH ABANDONED BABY
trend reversal candlestick pattern

Type: Bullish Reversal Pattern Level 1

Description:
  1. A long Bearish candle with a body appears when downtrend.
  2. The next Candle is a doji and a gap down.
  3. The third Candle is a bullish candle with a body length and gap up.

Psychology:

When the market is undergoing a downturn, the existence of a gap down adds to the belief that the downtrend will continue.

But it turns out there is no dominant between buyer and seller so formed doji.

The next session of the market move in opposite directions and even rose to the first candle body.

Note:
  • Increase the volume on the third candle can further confirm Impending reversal.

5. BEARISH TRI STAR
strong reversal candlestick pattern

A Bearish Reversal Pattern type: Level 1

Description:
  1. When in an uptrend, gap up, but prices closed the same or almost the same so formed doji.
  2. The second Candle also doji and gap back up.
  3. The third Candlestick in the form of doji but this time gap down.

Psychology:

Doji indicating doubt among market participants. When the market is in an uptrend and appears first doji, market participants began to pay attention to whether the uptrend will end.

The emergence of the second market shows, doji started to lose direction. The third doji gives indication that the uptrend is over.

This pattern indicates too the large number of doubts among the market participants.

Note:
  • These patterns rarely appear but if it comes up, then have a high probability.
  • This pattern is typically followed by a decrease in volume.

6. The BULLISH TRI STAR
magic candlestick reversal pattern

Type: Bullish Reversal Pattern Level 1

Description:
  1. While in a State of downtrend, gap down, but eventually formed doji
  2. The second Candle also doji and gap down again
  3. The third Candlestick in the form of doji but this time gap up

Psychology:

Doji indicating doubt among market participants. When the market is in a downtrend and appear doji first, market participants began to pay attention to whether the downturn will end.

The emergence of the second market shows, doji started to lose direction. The third doji gave a sign that the downturn has ended.

This pattern indicates too the large number of doubts among the market participants.

Note:
  • These patterns rarely appear but if it comes up, then have a high probability.
  • This pattern is typically followed by a decrease in volume.

7. A BEARISH ENGULFING
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A Bearish Reversal Pattern type: Level 1

Description:
  1. The bullish candle appears when an uptrend.
  2. The next Candle is a bearish candle with a long body exceeds the previous candle.

Psychology:

When the market is experiencing an uptrend, the next session opened with a gap up that indicates market participants still think conditions will remain bullish.

But prices reversed course and closed lower from the previous session's close. This marked change in sentiment from bullish become bearish.

Note:
  • Candle the second need only exceed the body first candle. But if well beyond the shadow candle first, then the stronger signal reversal.
  • The second candle is getting longer then the stronger the sentiment change that occurs.
  • It is usually followed by increased volume.

8. BULLISH ENGULFING
iq option candlestick pattern

Type: Bullish Reversal Pattern Level 1

Description:
  1. The bearish candle appears when downtrend.
  2. The next Candle is a bullish candle with a long body exceeds the previous candle.

Psychology:

When the market is undergoing a downturn, the next session opened with a gap down, which indicates market participants still think conditions will remain bearish.

But prices reversed course and closed higher than the previous session's closing. This marked change in sentiment from bearish became bullish.

Note:
  • Candle the second need only exceed the body first candle. But if well beyond the shadow candle first, then the stronger signal reversal.
  • The second candle is getting longer then the stronger the sentiment change that occurs.
  • It is usually followed by increased volume.

9. DARK CLOUD COVER
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A Bearish Reversal Pattern type: Level 1

Description:
  1. A Long Bullish candle with a body appears when an uptrend.
  2. Next in the form of a bearish Candle, candle with a long body opened above the high of the first candle and closed below the half of the body first candle.

Psychology:

When the market is experiencing an uptrend, the next session opened with a gap up that indicates market participants still think conditions will remain bullish.

But prices reversed course and closed below the half of the first candle. This indicates a lack of support for continuing the uptrend.

Note:
  • The lower the price closed below half the body candle first, then the more likely reversal.

10. PIERCING LINE
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Type: Bullish Reversal Pattern Level 1

Description:
  1. A long Bearish candle with a body appears when downtrend.
  2. The next Candle is a bullish candle with a long body opened below the low first candle and covered over half of the body first candle.

Psychology:

When the market is undergoing a downturn, the next session opened with a gap down, which indicates market participants still think conditions will remain bearish.

But prices reversed course and closed the first half on top of the candle. This indicates a lack of support to continue the downtrend.

Note:
  • The higher the price closed above half the body candle first, then the more likely reversal.

11. BEARISH KICKER
iq option candlestick analysis

A Bearish Reversal Pattern type: Level 1

Description:
  1. A Long Bullish candle with a body appears when an uptrend.
  2. The next session gap down with the opening price was near the opening price the previous session.

Psychology:

When the market is experiencing an uptrend, the next session opened with a gap down near the opening price the previous session.

This shows the sudden changes of market participants. If the market is still bullish, seeing in the next session of the market immediately reverses direction.

Note:
  • The Body of the second candle is the same or almost the same.
  • Getting the length of a body on the candle then the stronger signal reversal occurs.
  • It is usually followed by increased volume.

12. The BULLISH KICKER

candlestick reversal day trading
Type: Bullish Reversal Pattern Level 1

Description:
  1. A long Bearish candle with a body appears when downtrend.
  2. The next session gap up with opening price is near the opening price the previous session.

Psychology:

When the market is undergoing a downturn, the next session opened with a gap up near the opening price the previous session.

This shows the sudden changes of market participants. If the market is still bearish, sometimes at the next session of the market immediately reverses direction.

Note:
  • The Body of the second candle is the same or almost the same.
  • Getting the length of a body on the candle then the stronger signal reversal occurs.
  • It is usually followed by increased volume.
That's 12 pattern candlestick reversal level 1 as reference in open position trading or buy call/put/sell.
Do not miss also a reversal candlestick patterns to learn the next level:
Hopefully by learning, understanding and knowing the reversal candlestick patterns that emerge will help you in entering the market in taking the position.May be useful.
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I LOVE YOUR ALL CANDLESTICK ANALYSIS POSTS.

29 September 2018 at 00:39

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