Bearish Candlestick III

Now continuing with the theme of bearish candlestick we need to explain the following bearish candlesticks, Deliberation, Dragonfly Doji (Flying Dragon), Engulfing, Meeting Lines.

Deliberation



The pattern Deliberation or Stalled (Stuck) shows a weakening in the uptrend. After two strong candles upside the small body of the third candle tells us that the movement is losing momentum. While this formation shows a change in the market is not strong enough to create a signal to sell, but we will liquidate positions buyers.

This pattern requires that the second candle opens within the range of the body of the first candle, but the gap (gap) in the opening price is not possible in the Forex market. But traders tend to look similar formations as the Advance Block or Breakaway indicate that the market psychology.

Characteristics

• In an upward trend or movement, two bullish candles appears.


• The third candle is a little more bullish candle, as the spinning top or a Doji.

Dragonfly Doji (Flying Dragon)



After a strong uptrend a sale which is reflected by the Dragonfly Doji suggests that the trend may have lost strength.

Despite the fact that the hill on or near its opening price or a maximum reflecting bullish rally that day, but the candle we questioned the possibility that the market continues to trend upward.

With the upward movement lost momentum training can be a sign of more sales in the near future. We will have to seek confirmation of a trend change in the following candles.

Dragonfly Doji and Hanging Man

The Dragonfly Doji is a rare training in candlesticks that typically occurs at the top of an uptrend. It is very similar to the Hanging Man, with the exception of the Dragonfly Doji prices for opening and closing are virtually identical (without body). When the market opens and closes at the same price that shows a greater tendency to indecision of a small candle. Therefore, the Dragonfly is a more reliable signal that the Hanging Man and that gives us a stronger bearish signal.

Characteristics

• A candle with a very small or no body and a long lower shadow (long lower shadow).


• The lower shadow is at least double the body of the candle


• It has no upper shadow.

Engulfing



This pattern is one of the most clear change in a bearish trend. The pattern reflects that sellers have taken control over the purchase, and often is followed by a drop in the price.

First Candle: This may occur even as a Doji, the smaller the first candle will be the longest fall in the second candle and therefore higher signal a trend change. The dojis and candles indicate a small uncertainty in the trend, hence the smaller the first candle is the best sign of the end of an uptrend.

Second Candle: The second candle confirms the bearish end of the trend. The larger the greater the bearish candle drop movement and therefore the better the signal change.

This pattern is also more significant when it precedes a long upward trend or a quick upward movement. In both cases indicates that the market is in overbought and is therefore a possible change in trend.

The pattern Engulfing provide us levels of resistance to the price that this training has achieved. In the future this level of resistance will be difficult to break.

Characteristics

• In an established uptrend, a candle upward to a small average.


• n the second day the formation of a bearish candle.


• Normally the maximum (high) of the bearish candle should be over the maximum (high) of the previous candle.


• The signal strength will be greater the further down the candle close below the bass (low) of the first candle.

Meeting Lines



After an upward trend, the second candle opens above the close of the first candle. Although the second candle has a rally and open up the sales lead to closing the candle near the closing price of the previous candle. Hence its name because it included the closing lines of the previous day and the second candle near the end of the second candle and closing the first candle.Esto means that the upward trend has weakened and may change trend.

Psychology and Confirmation: In many ways this training is a clear indication of a trend change, as prices have been rising for a while. We can see an upward movement in the first candle, setting a mark for the rally. After the close of the first candle and the opening of the second candle, the market has continued to rise. The second candle we sell a telling shift. Those traders that have positions close and buyers must find the time to start selling. But as this formation is a formation of a moderate turnaround in strong, traders will need to seek confirmation of a change in the following candles.

This pattern is fairly typical in a short-range market. Meeting Lines is more significant after a prolonged uptrend.

Meeting Lines is not as reliable as the Dark Cloud Cover. The Meeting Lines is very similar to Dark Cloud Cover. With the formation Dark Cloud Cover, the rally is not as high, suggesting a weaker purchasing power. With the Dark Cloud Cover is the strongest decline, indicating that sellers are more to strength Meeting Lines. Therefore, the Dark Cloud Cover is more reliable.

Characteristics

• The market should be characterized by an uptrend.


• The first candle will be a bullish candle.


• The second candle is a bullish candle.


• The two closed at the same price.