Candlestick chart patterns are SO important. They can repeat over and over. You need to learn to recognize them so you can spot solid trade opportunities. Today, Tim Bohen will discuss two patterns you should look for — and two you should avoid.
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Let’s start with patterns you should trade ... like the bullish uptrending chart. It has a long history of consolidation, a big high-volume breakout, and then it just gradually uptrends. Look for those higher lows and higher highs — these are where you want to draw your trend lines.
That's the kind of chart you want to look for. Gradually uptrending, breaking out on the 52-week chart, with building volume, higher lows, and higher highs.
Next, let’s look at a consolidation and breakout chart. Gap up, consolidate, and then re-breakout. You can actually set alerts in StocksToTrade or whatever platform you're using for this pattern. So if you miss these big gap ups, you can set an alert at that next breakout area.
For example, say you have a big high-volume candle. It gaps up, and the stock goes into consolidation mode. Consolidation mode means it's in a tight band. The stock is just tracking sideways ... It's not breaking out, but it's also not breaking down. That means the stock is collecting buyers. It's building momentum, and it's holding its gains.
Now everyone is looking for that next breakout area. You're looking to buy those breakouts with risk. You set your risk on the failed breakout level. Not every trade will work, but these are common patterns.
Now, onto the two patterns you should avoid...
Let’s say a stock does nothing for a year but drop lower and lower. Every single day it just trends lower. And when it does bounce, it closes on the low of the day, then continues its trend down lower. That’s what we call a ‘dead cat bounce.’ Don’t EVER try to trade this pattern.
This is a stock, until something significant happens, that you should avoid. The risk/reward just isn’t there on the long-term downtrending chart.
The last one I want you to avoid is what we call the ‘one and done.’ This is a chart where the stock spikes, but then those doji candles pop up. Every time the stock spikes, it spikes up but then closes almost on the low of the day. It’s possible to win here and there. But these stocks tend to squeeze, drop, and stop you out. And that can create frustrating losses.
So remember, the bullish uptrending chart and the consolidation breakout are two you should focus on. And you should avoid the long-term downtrend (the dead cat bounce) as well as the one and done.
#StocksToTrade #StockMarket #CandlestickPatterns
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
🔴 Subscribe for more free Stock Trading tips: YouTube.com/StocksToTrade
Share this video with a fellow Trader: https://youtu.be/Jwqbhh3lBYI
✅ Links we mention and recommend:
Try StocksToTrade for $7: https://stockstotrade.com/14daytrial/
Get our FREE weekly watchlist here: https://stockstotrade.com/watchlist
Check out the SteadyTrade podcast: https://steadytrade.com
✅ Recommended video: https://youtu.be/nvw8p6jaBO4
✅ Recommended playlists:
Stock Trading 101: A Day Trader's Guide: https://www.youtube.com/watch?v=G_v3GMkKCjk&list=PLWWz2BSabm3bG64ohfJ-CnnVTjLCWwvei
Advanced Stock Trading Tips: https://www.youtube.com/watch?v=OXLs_-PgMUk&list=PLWWz2BSabm3YCZdk7ocrBXGJaLVXXFUYb
StocksToTrade Software Tips and Tricks: https://www.youtube.com/watch?v=jiTi-chHNyo&list=PLWWz2BSabm3ay_lvQC9JN_1niB78bI7ga
Weekly Trading Recap Videos: https://www.youtube.com/watch?v=_n0XaDt1XFY&list=PLWWz2BSabm3b3-4DcEx98TzNPLAKcq6ES
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Let’s start with patterns you should trade ... like the bullish uptrending chart. It has a long history of consolidation, a big high-volume breakout, and then it just gradually uptrends. Look for those higher lows and higher highs — these are where you want to draw your trend lines.
That's the kind of chart you want to look for. Gradually uptrending, breaking out on the 52-week chart, with building volume, higher lows, and higher highs.
Next, let’s look at a consolidation and breakout chart. Gap up, consolidate, and then re-breakout. You can actually set alerts in StocksToTrade or whatever platform you're using for this pattern. So if you miss these big gap ups, you can set an alert at that next breakout area.
For example, say you have a big high-volume candle. It gaps up, and the stock goes into consolidation mode. Consolidation mode means it's in a tight band. The stock is just tracking sideways ... It's not breaking out, but it's also not breaking down. That means the stock is collecting buyers. It's building momentum, and it's holding its gains.
Now everyone is looking for that next breakout area. You're looking to buy those breakouts with risk. You set your risk on the failed breakout level. Not every trade will work, but these are common patterns.
Now, onto the two patterns you should avoid...
Let’s say a stock does nothing for a year but drop lower and lower. Every single day it just trends lower. And when it does bounce, it closes on the low of the day, then continues its trend down lower. That’s what we call a ‘dead cat bounce.’ Don’t EVER try to trade this pattern.
This is a stock, until something significant happens, that you should avoid. The risk/reward just isn’t there on the long-term downtrending chart.
The last one I want you to avoid is what we call the ‘one and done.’ This is a chart where the stock spikes, but then those doji candles pop up. Every time the stock spikes, it spikes up but then closes almost on the low of the day. It’s possible to win here and there. But these stocks tend to squeeze, drop, and stop you out. And that can create frustrating losses.
So remember, the bullish uptrending chart and the consolidation breakout are two you should focus on. And you should avoid the long-term downtrend (the dead cat bounce) as well as the one and done.
#StocksToTrade #StockMarket #CandlestickPatterns
*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.
You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.
Great video. Following your suggestions and making progress. Plan to watch all your videos.
Thank u Tim B for all your help and video
Yes traded several down turning charts. For instance what is PGY doing?
It will be better not to show this laptop in front while doing the explantions
Not trading any of those, but do have one that shows consolidation before an uptrend. I don't stick to viewing just the day, month or year charts, though. I look at them all. I want to know what is possible in a stock. Maybe it won't repeat, but then again, maybe it will. Uptrend/Green/Go. Downtrend/Red/Stop (unless you're shorting, of course, ha ha!). Yes, this is very simplistic, but I am aware that there are many other factors to consider. Many thanks for this valuable illustration.
🤩
So what you’re saying is to short these avoidable patterns? Lol
No. In being New to trading, I don't think that's financially a good idea. If i don't get that simple transacting concept, I need to find a new career. 🤦♂️
I always enjoys watching Tim Bohen"s video lessons.
My first stock that I bought when I was 24 years old was a downtrending stock that never recovered.
I got suckered with MMAT lol 😉
Love how Tim makes it so simple…I have caught 3 times in such dump and pump…I had a chance to get out on profit/even out but got greedy to hit my goal and paid for it…Small position size saved me
I'm curious what you might think about $ARLO and it's current movement?
I got suckered into an ICO (Unikoin Gold) in 2017 at the top and I got the hopium bug thinking it would turn around. It went to zero. I lost a lot of money in that. Chart looked eerily similar to your last chart.
yes I was trapped
Yes I have gotten caught in the down trending chart. Thanks for the videos helping a lot
You are my favorite You tuber! Thank you Kindly for your time and help.
Awesome content!! The movement of your computer going left to right is very dizzying for a motion sickness person and seems to be for no reason.
Thanks TB
Oh Yes I have been suckered into a downward trending chart and held over time to luckily make my money back but either way it sucks as my money is locked up and wasn't looking to take a lose.
Here's the master of trading Tim Bohen
is there a difference between authorized shares outstanding shares, i know the definition but does the sped between them matter for supply and demand???
Thank you!
Thanks for the videos Tim…I think Im starting to understand a little more.
by far the best channel and software I've came across in my trading career.
The trade pattern Tim said to avoid looks like JC Penny stock. company going bankrupt
Yes I am one of them. Thanks for opening my eyes.
The long-term downtrending but with rising bottom are potential break outs
Are you trading these patterns?