10-01-09
4:24a GMT – Quick pop quiz for you: there was a very bearish candlestick on the charts about 4 hours ago. Can you name what the candlestick formation was and why it was significant sell signal? Post your answers below. On to the signal…
Happy October! It is starting to get cold outside but the forex market is heating up. I am still bearish on the pair and therefore looking for areas to short, but there are also some bullish signals beginning to creep into the picture. First and foremost we had a bullish engulfing candlestick yesterday on the daily chart. We also had a higher high and higher low in general. That’s OK though as long as key resistance levels aren’t broken (we have 1.4680 and 1.4720 still holding down prices). Those looking to re-enter the market for shorts should look for failures between 1.4660-14680.
Trading Idea: Look to short failures in the 1.4660-1.4680 resistance area, with short targets to 1.4630, 1.4600 and 1.4565.
(click to enlarge)
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October 1, 2009 at 03:39
Was it the long whisk up, meaning it got pushed down near resistance at 4660?
October 1, 2009 at 03:42
I won’t say if you are wrong or right yet because I want to give more people the chance to reply but you get points for being fast regardless :). For the candlestick you are talking about what is the name of that candlestick formation?
October 1, 2009 at 04:02
It´s that a Pinocchio pinbar?
October 1, 2009 at 04:21
bearish evening star?
October 1, 2009 at 04:29
Gravestone doji?
October 1, 2009 at 05:08
Bearish engulfing bar on ibfx i/10 oo::oo bar
October 1, 2009 at 05:11
but on yours looks like shooting star
October 1, 2009 at 05:47
You mean a Spinning top candle? :)
October 1, 2009 at 05:52
Oooops… EUR/USD for this time: 1.4570
What next? Back up to 1.4680? Hmmm… Help please :)
October 1, 2009 at 06:00
would say bearish evening star
October 1, 2009 at 06:37
That is a shooting star and it is a sell signal because price just pierced the resistance but closed below it
October 1, 2009 at 06:43
Hammer candle, the bulls tried to take control but lost to the bears
October 1, 2009 at 06:50
If it is the candle on the 1H chart at 00h00 then it is a shooting star. It’s a sell signal as it indicates failure by the Bulls to dominate the market during that time. The longer the shadow the greater degree of uncertainty.
(Hey Mark, I kept the caps to the min)
October 1, 2009 at 07:05
Evening Star .
Oh and by the way wery nice web site keap up the good work :) Started to folow your advice on trades a few weaks back and till nou didnt lost a trade :D
October 1, 2009 at 07:15
It’s a Shooting Star or Inverted Hammer, my favourite reversal candle.
October 1, 2009 at 07:17
ohh lol if im wright Evening Star is a top reversal signal to the downside after market reaching new highs :D
October 1, 2009 at 07:33
It is bearish Shaven candlestick
October 1, 2009 at 07:56
evening star !
October 1, 2009 at 08:56
Evening Star
October 1, 2009 at 09:43
Can anyone recommend a good trading platform for using a micro account. Thanks very much
October 1, 2009 at 10:14
To me it seems like Hammer Formation. which shows DownTrend.
Please post the answer… i can’t wait :)
October 1, 2009 at 12:38
Hey Mark, wonderful site !
Do you think the price will bounce of the 1.4530 support and back to 1.46xx or a definite downtrend is forming ?
October 1, 2009 at 14:47
Downtrend is definitely forming BUT I’d like a break of 1.4515 to really put the nail in the coffin. Either way I’m looking for shorting opportunities on rallies. My nearest major resistance is 1.4600.
October 1, 2009 at 14:26
On the daily chart I have a downtrend channel and a restistance at around 1.4515 (10-20). Is this valid Mark or do you have different numbers?
October 1, 2009 at 14:46
I’ve got support between 1.4515-1.4530 (I use “areas” of support). My nearest major resistance is 1.4600.
October 1, 2009 at 14:27
sorry, not resistance i meant support
October 1, 2009 at 14:27
Mark, the posts and comments on your site should show the time and not just the date. There is no way of figuring out at what time a comment was posted.
October 1, 2009 at 14:45
Good point. I’ll look into this. Thanks
October 1, 2009 at 14:36
We got a lot of different answers here but the answer I was looking for was…. (drumroll) SHOOTING STAR. More specifically, shooting star AND it was signifcant because a) it was at support at 1.4660 making it significant, b) there was a bearish doji on the 30M chart giving us miltiple signals, further reinforcing the sell signal.
I would have also accepted PIN BAR (aka Pinnochio pin bar), or inverted hammer (but the proper name for this is shooting star :).
Some of the other answers with explanations as to why they are right/wrong:
Shooting star - RIGHT – occurred after several bullish sticks and short-term uptrend at the top. Long upper wick, small body. Some people call this inverted hammer but the proper name is shooting star :)
Pin bar – RIGHT – basically a shooting star but open close is within previous candle’s body and the candle after is bearish.
Evening Star – technically WRONG – but the right idea. Evening stars look like shooting stars but are suppose to have a gap between the preceding and following candles.
Doji - WRONG – good doji’s have flatter bodies and long wicks on both sides, but
Gravestone doji - WRONG – closer than a regular doji but not it. Gravestones usually have long upper wicks (which this did) but flat bodies (this did not). This is debated but I think gravestone doji’s are more reliable at the bottom of a pattern, not top.
October 1, 2009 at 15:02
On a quick note, that shooting star signal would have yielded you 100+ pips… :)
October 1, 2009 at 14:37
Quick note on candlestick formations – a lot of them look similar as we just saw where 20 something traders all saw slightly different versions of the same thing. Small nuances make the difference…
October 1, 2009 at 14:38
By the way, seems like people liked this – maybe I should do a daily candlestick quiz? What do you think?
October 1, 2009 at 14:45
Please do, maybe some other stuff as well. Which tech ana do you use?
October 1, 2009 at 15:10
What is “tech ana”?
October 1, 2009 at 15:20
Short for technical analysis, if you would care to share it with us
October 1, 2009 at 15:30
Nothing fancy about my technical analysis – I share it with you every day. Determine if I’m looking short or long depending on short-term trend. Use support/resistance, candlesticks and plain-old price action for entry points. My thing though is I keep it consistent and use solid money management. I like simplicity.
Long ago I used lots of different technical indicators but they never worked for me as well as this. Too much information, too many false signals – paralysis by analysis.
October 1, 2009 at 16:47
I think the daily quiz would be nice, for your money management, when you enter multiple lots, do you still make them 2% of your balance? Thanks.
October 1, 2009 at 16:53
Yes, and 2% at the MOST.
October 1, 2009 at 17:36
Hi Mark,
with the risk of not being original: thanks for you great site that you have here.
One suggestion: could you please update your posts, or even in the comments, during the day? It could happen to clarify some signals, eg: I do not enter a trade if your suggested enter is being touched for the second time in a interval greater than 2 hours. Even if I spot clear signs to enter… Many times I regret that I did not enter.
October 2, 2009 at 14:10
I’m always OK with people being repetitive about saying “thanks”. Glad to help and glad to have you here. In the past I have updated posts/signals more regularly but just haven’t had the time recently. The main thing is I want to help you trade for yourself – not trade for you. That is why I recommend demo accounts for most traders – beginners or not. I want you to get to the point in your trading where if I stopped working on PipHut tomorrow you’d still be OK on your own.
October 1, 2009 at 17:53
Thank you again. +1 for a quiz everyday.
Does your strategy work on every currency pair? Also how did you call it correctly at 1.4850 there can be a major reversal of trend. What support level has the potential to change trend upwards from here.
Can tomorrow’s news change trend for Euro?
October 2, 2009 at 14:08
My basic strategy works for many pairs yes, though some pairs are a bit different and require tweaking (e.g. a trending market requires a little different strategy than a ranging market). Also pairs have different recommended stop-loss minimums.
1.4850 was so long ago… Luckily I write about it everyday and keep my rationale! Follow the link below and you can see my reasoning behind going short then. Namely it was an overbought market approaching strong weekly support.
http://piphut.com/2009/09/forex-signal-eur-usd-approaches-key-resistance/
October 1, 2009 at 19:21
Thanks MARK for the brain-teazer!
A good reminder to dig out the candle theory.
October 1, 2009 at 19:30
The shooting star is a bearish reversal pattern that looks identical to the inverted hammer but occurs when price has been rising. Its shape indicates that the price opened at its low, rallied, but pulled back to the bottom. This means that buyers attempted to push the price up, but sellers came in and overpowered them. A definite bearish sign since there are no more buyers left because they’ve all been murdered.
October 2, 2009 at 02:57
I find that a Shooting Star at a pivot resistant region is a very strong reversal signal to sell, the higher the time frame the higher the probability.