MORNING STAR vs. EVENING STAR

Both Morning Star & Evening Star are 3-day reversal patterns.Whether a pattern is bearish or bullish reversal, it depends upon whether it appears at the end of a downtrend (Morning Star) or an uptrend (Evening Star).Note:The grey candle means the color of the candle’s body can be white or black (red).MORNING STAR (BULLISH)Morning Star is a bottom reversal pattern / bullish reversal pattern.It may be formed at the end of a downtrend, or during...

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DESCENDING CHANNEL PATTERN

Descending Channel Pattern is a short-term bearish continuation pattern, whereby the price movement is contained within two parallel descending trend lines and the price is moving lower while bouncing off upper and lower down-trending lines.Descending Channel pattern is also known as “Bearish Price Channel”.The Formation of Descending Channel PatternDescending Channel Pattern has two parallel trend lines that are sloping downward.In this case, the...

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ASCENDING CHANNEL PATTERN

Ascending Channel Pattern is a short-term bullish continuation pattern, whereby the price movement is contained within two parallel ascending trend lines and the price is moving higher while bouncing off upper and lower up-trending lines.Ascending Channel pattern is also known as “Bullish Price Channel” or “Rising Channel”.The Formation of Ascending Channel PatternAscending Channel Pattern has two parallel trend lines that are sloping upward.In this...

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Love Links

Happy Valentine’s Day to all my readers!May you have a specially sweet and memorable day today by spending it with your loved ones. :)By the way, it’s been quite a while I didn’t provide links to many excellent educational readings out there.Here are some of them. Check them out!Trading Wise Words: What Is Discipline in Trading?OptionAddict: Selecting an Option... With a Hint of GammaAfraid To Trade: Insights from Volume and Open InterestAfraid To Trade: Thoughts on Frustration in Achieving Trading SuccessTime Is Money: The Holy Grail Setup ExplainedA...

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RECTANGLE PATTERN – Part 2: Important Characteristics

Go back to Part 1: Rectangle FormationImportant Characteristics of Rectangle Pattern:Existing Trend:There should be an established existing trend (either uptrend or downtrend) in order for the pattern to qualify as a continuation pattern.Shape of Rectangle Pattern:* There should be at least 4 reversal points to draw two parallel lines, i.e. two equivalent peak (high) points forming a horizontal upper line (resistance) and two equivalent trough (low) points forming a horizontal lower line (support).* There should be some distance between the two...

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RECTANGLE PATTERN – Part 1: Formation

Rectangle Pattern is a neutral pattern that normally forms during a trend (either uptrend or downtrend) as a continuation / consolidation pattern.The breakout usually occurs in the same direction as the previous trend, although it may break against the previous trend as well.Rectangle pattern is also known as “trading range”, “box pattern”, "rectangular pattern”, “consolidation zones”, or “congestion areas”.The Formation of Rectangle PatternRectangle...

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