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.

By Stock Chat

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29 thoughts on “Candlestick patterns: two to trade two to avoid”
  1. Avataaar/Circle Created with python_avatars Timothy Crawford says:

    Great video. Following your suggestions and making progress. Plan to watch all your videos.

  2. Avataaar/Circle Created with python_avatars Dane Chowning says:

    Thank u Tim B for all your help and video

  3. Avataaar/Circle Created with python_avatars Do Not Be Misled says:

    Yes traded several down turning charts. For instance what is PGY doing?

  4. Avataaar/Circle Created with python_avatars Martin Medved says:

    It will be better not to show this laptop in front while doing the explantions

  5. Avataaar/Circle Created with python_avatars gracefire7 says:

    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.

  6. Avataaar/Circle Created with python_avatars Walter Harris says:

    🤩

  7. Avataaar/Circle Created with python_avatars BrianLexL says:

    So what you’re saying is to short these avoidable patterns? Lol

  8. Avataaar/Circle Created with python_avatars Tony Rodriguez says:

    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. 🤦‍♂️

  9. Avataaar/Circle Created with python_avatars Robert Osiobe says:

    I always enjoys watching Tim Bohen"s video lessons.

  10. Avataaar/Circle Created with python_avatars xquisitered says:

    My first stock that I bought when I was 24 years old was a downtrending stock that never recovered.

  11. Avataaar/Circle Created with python_avatars Oscar P says:

    I got suckered with MMAT lol 😉

  12. Avataaar/Circle Created with python_avatars Farhan Chohan says:

    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

  13. Avataaar/Circle Created with python_avatars Richard Buchanan says:

    I'm curious what you might think about $ARLO and it's current movement?

  14. Avataaar/Circle Created with python_avatars Handy Rams says:

    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.

  15. Avataaar/Circle Created with python_avatars Claudia Cardenas says:

    yes I was trapped

  16. Avataaar/Circle Created with python_avatars Claudia Cardenas says:

    Yes I have gotten caught in the down trending chart. Thanks for the videos helping a lot

  17. Avataaar/Circle Created with python_avatars Maganth Mogandas says:

    You are my favorite You tuber! Thank you Kindly for your time and help.

  18. Avataaar/Circle Created with python_avatars n w says:

    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.

  19. Avataaar/Circle Created with python_avatars Gary Porter says:

    Thanks TB

  20. Avataaar/Circle Created with python_avatars TheFam says:

    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.

  21. Avataaar/Circle Created with python_avatars Fly4or says:

    Here's the master of trading Tim Bohen

  22. Avataaar/Circle Created with python_avatars jonas derosa says:

    is there a difference between authorized shares outstanding shares, i know the definition but does the sped between them matter for supply and demand???

  23. Avataaar/Circle Created with python_avatars Jackie Smith says:

    Thank you!

  24. Avataaar/Circle Created with python_avatars Just Chilling says:

    Thanks for the videos Tim…I think Im starting to understand a little more.

  25. Avataaar/Circle Created with python_avatars dannyb says:

    by far the best channel and software I've came across in my trading career.

  26. Avataaar/Circle Created with python_avatars Lisa Tatsuno says:

    The trade pattern Tim said to avoid looks like JC Penny stock. company going bankrupt

  27. Avataaar/Circle Created with python_avatars Antony_thecoolboy Maiyo says:

    Yes I am one of them. Thanks for opening my eyes.

  28. Avataaar/Circle Created with python_avatars Craig Israel says:

    The long-term downtrending but with rising bottom are potential break outs

  29. Avataaar/Circle Created with python_avatars StocksToTrade says:

    Are you trading these patterns?

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