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WHEN A BEARISH ENGULFING PATTERN IS SIGN OF SIDEWAYS TREND?

A bearish harami can sometimes result in a sideways trend.This happens when the bearish harami takes a form called the high price harami.

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What makes the bearish harami a weak bearish reversal indicator?

A bearish harami is one of the weakest bearish trend reversal candlestick.It is due to the psychology behind it.

In simple terms, it is the bears and bull's behaviour in the market that makes the bearish harami a weak trend reversal pattern.

The above picture depicts the behaviour of bulls and bears in the market that leads to the formation of bearish harami and also makes it a weak indicator.

Click here to read the explaination about their behaviour.

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Bearish Harami-What is it and what it tells?

Harami is a japanese word meaning pregnant women . In terms of candlesticks, harami represents a two candle pattern .

Bearish harami appears in an uptrend . The first candle is called the mother candle and is longer . The second candle is called the foetus or baby candle.It is shorter than first candle.

How it looks?

In terms of the candle terminologies, the open price of the second candle is less than the close price of the first candle . The close price of the second candle is greater than the open of the first candle.

click here to read the three factors that influence the strength of bearish harami.

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How the bears and bulls behave in a bullish harami ?

The stock market is driven by the bears and bulls .The behaviour of the bulls and bears which results in a bullish harami can be understood by looking into the price movements.

The price movements explaination helps us to conclude with three promising factors that enhance the chance for trend reversal.

click here to read about the three promising factors

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Bullish harami-The warning to short sellers

A bullish harami is bullish trend reversal pattern.It is a two candle pattern.Unlike bullish engulfing pattern, a bullish harami is not a strong trend reversal indicator.

However it's not wise to neglect such patterns especially when you are short selling.

STRUCTURE

A bullish harami consisit of a large bearish candle at first.This is followed by a small bullish candle.

What do the candles represent?

The two candles in bearish harami represents two things.The first candle represents the existing trend in the market.The second candle represents the emerging trend in the market.

click here to read more

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Bearish Engulfing pattern can result in uptrend ! When and How?

The above chart is a perfect example for a bearish engulfing pattern to act as a bullish trend reversal.This happens when bearish engulfing pattern occurs in the end of downtrend.

Click here to learn more about this in detail.

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Bearish engulfing pattern-The most bearish of all the pattern

A bearish engulfing pattern is considered to be the most bearish of all the bearish trend reversal patterns.

The reason behind this lies in the price movements of the pattern.The price movement looks as follows

Read explaination of the price movement to find out why it is the most bearish...

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Bearish Engulfing Pattern

A bearish engulfing pattern is a two candlestick pattern.It indicates the bearish trend reversal.

The first candle is small and green in color.The second candle is large and red in color.

The shadows of the first candle can remain outiside the real body of the second candle.The most important condition is that the first real body must remain within the region covered covered b second candle's real body.

Do you know that a bearish engulfing candle and shooting star are similar to each other?

Click here to find out how...

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How do the bulls and bears behave in the market during a bullish engulfing pattern?

The stock market is driven by the supply and demand.In other words we can say that it is the bulls and bears who control the market.

If you are new to stock market , a bull is a person who wishes to buy a stock at higher price than current price.When bulls dominate the market , the market becomes an uptrend.

A bear is a person who wants to buy the stock at a lower price than the current price.When there are large number of bears , the share price fall resulting in a uptrend.

It is the behaviour of these bulls and bears that result in a various candle patterns.

The above picture reveals how the bears and bulls behave in the market that leads to a bullish engulfing pattern.

Click psychological behaviour to read about their behaviour in detail.

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Bullish Engulfing candle-The candle a trader should not miss

A bullish engulfing candle is a two candle pattern.It consists of a smaller bearish candle at first.Followed by a big bullish candle.The shadows of the first candle need not be necessarily contained within the real body of the second candle.

A bullish engulfing candle looks as follows

To take a trade in a bullish engulfing candle , there a few criteria's that should be compulsarily satisfied.Click criterias to read further

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The above chart is a perfect example for shooting star pattern.There are three factors that should be considered while taking a trade in a inverted hammer.

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What is a shooting star candle?

A shooting star is a candle pattern similar to that of the inverted hammer.It is a bearish reversal pattern and most effective when it appears in the end of a uptrend.

A shooting star consist of a long upper shadow and a small to no lower shadow.

The shooting star can be red or green.Both results in downtrend when it appears.This is because of the price movements that results in a shooting star formation.Click explaination to read about it's price movements.

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The Color Of A Hangingman Candle Is Not Important At All? Do you know why?

If you have watched the market for a while, you would have seen that a hanging man candle whether red or green result in a downtrend.Have you ever wondered why?

Usually a green candle indicates that the bulls are more active.But if this is true in case of a green hanging man then what is it that makes it to cause a downtrend.

The answer for this lies in the following price movement chart

The above is the price movement for a hanging man and hammer.This price movement causes the hanging man to result in downtrend no matter what the color.

Click here to read the explaination of the price movemrent.

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Hanging man candlestick

A hangingman is a single candle trend reversal indicator . It is a bearish reversal candlestick . The hangingman candlestick can appear anywhere in the trend . However it indicates trend reversal only when it appears at the top of a bull market or uptrend . It is called so because it looks like man hanged up.

A hangingman candlestick has the same characteristic features as that of a normal hammer candlestick . Click hammer candlestick to learn more about hammer.

Structure of a hanging man candlestick

The structure of both a hammer and hanging man are the same.The difference between them is caused by other factors .Click here to read about the factors.

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The psychology behind a inverted hammer candle

The above chart shows the price movements of the stock caused by the bears and bulls in the market.This is also the reason why both the red and green inverted hammer reult in uptrend.

Read the explaination of the chart to get a full in depth understanding.

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Inverted Hammer Candlestick

An inverted hammer is a bullish reversal candle.It has a long upper shadow and a small or no lower shadow.It appears at the end of a downtrend.

The structure of an inverted hammer is as follows

The inverted hammer can be either red or green.Either color results in uptrend.The reason for this could be understood only if the psychology behind is known.

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The psychology behind a hammer candle

The above picture describes the psychology of the bears and bulls in the market that leads to the formation of hammer candle.

This is the reason why both red and green hammer results in an uptrend irrespective of color.

Click explaination to read about this in brief.