I am not here to say these are the sure-shot patterns, but I may confidently say that these are the most probable patterns in candlestick patterns for day trading.
In trading, all are probabilities, Right!
Let’s start working together.
Open Equals To High In Candlestick Patterns For Day Trading:
The first candle should be a red candle for the open equals to high strategy. It must be the big or medium red candle that gives some signal, and the market is on the selling side; you should wait for the candle to close at any time frame and take the trade at the next candle opening.
I recommend intraday traders for 5 minutes time frame and positional traders for 15 minutes time frame.
For example: In a nifty 5-minute chart, the candle has opened in 14888, and the high of the candle is also 14888; you have to recognize that market is on the selling side and go for short, your stop-loss should be the high of the candle and target should be in 1:1 ratio or more.
I recommend not to trade for significant risks and small profits; always, your profit should be greater than your risk.
When you find the open equals the high candle, you should recognize that the market is in sellers’ control; you should go with short.
It is one of the most successful strategy, and sometimes I will book 1:2 and 1:3 ratio profits.
This type of pattern is most potent when the market opens.
For example market will open at 9:15 am; if the first candle in five minutes chart is open equals to the high candle, confidently you can take the trade and book profits, sometime your stop-loss may hit, but no problem, that is very rare.
But be careful while keeping stop-loss; I will keep my stop-loss slightly above the high of the candle because sometimes, the price will come till the high of the candle and, it will hit your stop-loss and revert again towards the profit side.
If the open equals to high candle don’t have any wicks or shadows, it is called bearish Marubuzo candle; if I saw that candle, I will get excited to take the trade; many times I had booked 1:3 targets, but in rare cases, stop-loss hits.
Bearish marubuzo candle indicates that the market is drastically falling. Therefore, many lots will short by the sellers; I will blindly enter the trade by seeing that bearish marubuzo candle.
You may say that Open equals high means taking a short position, that’s right, and your stop-loss should be above the high of the candle.
Open Equals To Low In Candlestick Patterns For Day Trading:
This strategy to go long, and this can frequently happen in the opening of the market.
Open of the candle and low of the candle should be the same; you should wait for the candle to close in any time frame.
After closing the candle, you have to check whether the candle is in open equals to low, and it needs to be a big candle or medium.
After confirming all the rules, you should take the trade at the next candle opening and keep the stop-loss at low of the open equals to the low candle.
I recommend keeping the stop-loss slightly below the candle’s low; by now, you will be able to answer why the stop-loss has to stay slightly below the low of the candle?
It is one of the best strategies and most probable ones.
For example: If the nifty, opening of the candle is at 14888 and the candle’s low is at 14888, you should wait for the close and take the trade; stop-loss should be below the 14888 prices.
Bullish marubuzo candle will give the profits up to1:3 ratio.
By seeing bullish marubuzo candles, I will notice that buyers are pushing the market to the bullish side. Therefore, I will blindly enter the trade at the next candle opening, and I will take the profit at a 1:2 ratio; sometimes, it may give up to a 1:4 ratio.
You can be able to identify the candle by following some rules :
marubuzo candle didn’t have wicks or shadows
opening and low of the candle should be the same (BULLISH MAUBUZO)
opening and high of the candle should be the same (BEARISH MARUBUZO)
Another essential thing about candlestick patterns for day trading
Marking of the previous day highs and lows for candlestick patterns for day trading:
If open equals high candle open below the previous day low, that trade will be the most probable and profitable. In that case, I will confidently go for short.
Stoploss should be above the open equals to the high candle.
If open equals to low candle open above the previous day high, that trade will be most accurate and more potent.
You can go for the long by keeping less risk and expecting more reward.
Stoploss should be below the open equals to the low candle.
By identifying the open high low close candle, I will not take the trade blindly without calculating my risk.
My risk should be less, and the target has to be more when compared to the risk.
That should be in the ratio of 1:1 and above.
Mostly I would like to prefer 1:2 and above trades.
Because I would like to concentrate on my losses, then my profits.
The only important thing in every strategy is to bear the loss.
The market will decide your profit.
How To Draw A Trend Line In A Downtrend For Candlestick Patterns For Day Trading?
We have a downtrend market; we run and pull back again, a run and a pullback.
At the bottom of each run, before the pullback begins, it is called swing low, and at the top of each withdrawal, before the run starts, it is called the swing high.
In an ideal downtrend, the price will make new highs and new lows.
Now use a trend line to connect the swing highs and the top and swing lows along the bottom.
How To Draw A Trend Line In A Uptrend For Candlestick Patterns For Day Trading?
We have an uptrend market; we run and pull back again, a run and a pullback.
At the top of each run, before the pullback begins, it is called swing high.
At the bottom of each pullback, before a run begins, it is called swing low.
That means in an ideal uptrend; the price makes higher highs and higher lows.
Then apply the trend line to connect the swing highs and the top and swing lows along the bottom.
Price won”t always move this smoothly in trending markets, but this is what you want to reference for what an ideal trend movement will be taking place.
Why We Exactly Draw Trend Lines For Candlestick Patterns For Day Trading?
Trend lines will act as a form of support or resistance, but also, a break of a trend line will be the signal for a possible trend change.
Along the top, the trend line acted as resistance when price touched the trend line.
Along the bottom, the trend line acted as support when price touched the trend line.
You don’t enter trades blindly because the price has touched a trend line; you should always wait for the price action.
One More Reason Why We Should Draw Trend Lines Candlestick Patterns For Day Trading?
A break of a trend line will give a signal for the possible trend change.
In a downtrend, we have a trend line placed above the trend.
When the price breaks this trend line towards the bullish side, it can signal a possible trend change.
We have a trend line placed below the trend.
When the price breaks this trend line towards the bearish side, it can signal a possible trend change.
In an uptrend, we have a trend line placed below the trend.
When the price breaks this trend line towards the bearish side, it can signal a possible trend change.
Again when the downtrend starts, we place the trend line above the trend; when the price breaks this line towards the bullish side, it will be a possible bullish move.
It is a cycle of bullish and bearish moves. So by drawing the trend line, you should have to take the trades of bullish and bearish moves.
Do not enter the trade; when the trend line has broken, you must watch the action of the price before the entry.
While Drawing The Trend Lines, The Following Are The Rules For Candlestick Patterns Of Day Trading:
In candlestick patterns for day trading for drawing the trend lines,
- you should need a minimum of 2 to 3 touches of the candle shadows.
- The more touches may not hold for the next time.
- Swing highs and lows should be inside the trend line.
- Draw the trend line; if the trend line had occurred naturally, do not force yourself to draw the fake trend lines.
- Use trend lines for your guidelines and analysis but not for the sure-shot signal for the trade.
Trends will not occur smoothly; they are choppy.
Draw your line in an area where you can get the most amount of touches, and either candle closes, candle bodies, or wick ends.
For applying the trend lines, you have to get a suitable movement; either you won”t be able to use the trend line in a moving trend consistently.
In candlestick patterns for day trading there will be some Imperfect trend lines.
In imperfect trend lines, you won”t be able to connect always all the swing highs and swing lows while drawing the line.
In that case, try to connect that gives you the most touches and leave the untouched ones.
How To Use Trend Lines For Candlestick Patterns For Day Trading?
You have to look for the price action patterns before a trend line breakout.
Types of price action patterns are wedges, triangles, price action combining patterns with candlestick patterns.
My favorite patterns in candlestick patterns for day trading are.
- double top or double bottom pattern
- trend change pattern
Double top pattern for candlestick patterns for day trading.
What does double top give the signal in candlestick patterns for day trading?
This double top strategy will be applicable in the uptrend.
The double top pattern is a reversal pattern.
It shows a loss of momentum from the buyers, and it is the signal for you to go against the dominant trend.
Don’t chase trades because, as you can see, there is always another opportunity and another entry.
Vice versa, in a downtrend, the double bottom pattern will be applicable.
Look for a price action reversal pattern inside of the weekly double bottom.
How To Identify Trend Change Patterns You Look For These Traits Specifically?
- You have to look for a lower high OR a lower low to occur right before a trend line break in an uptrend.
- In the downtrend, you have to look for a higher high to happen right before a trend line break.
How To Maintain The Quality Of The Trades In Candlestick Patterns For Day Trading?
The more concepts and strategies you learn, the more will your trade quality.
The deeper you get into the price action, the more you will understand the quality of the trade.
You should know when to take trade and when to pass on without making an entry.
All you will gain from your experience and practice in candlestick patterns for day trading.
If you are interested in taking these types of most probable trades, you may contact us to be a profitable and most probable trader.
These are the only samples for candlestick patterns for day trading, in this article mostly discussed patterns are most probable and profitable.
The original program will be in our private groups and our course about best indicators for intraday trading and candlestick patterns for day trading.
I am not a trainer; in the stock market, there are no trainers; all are learners.
There are many best indicators for intraday trading and many trading strategies will personally recommend that will be available in our private channel for the candlestick patterns for day trading.