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Pesavento Pattern If you know the author, please post his credit. Thank You. Pesavento_Pattern_(MultiCharts).pla Pesavento_Pattern_(TS).txt

This pattern is often noticed when a trending move is in its final stages.

The impulse wave always moves in the direction of the pre-existing trend.This implies that if a trend is upwards in direction, the impulse wave will also show a peak in the price and when the trend is downward, the wave will show a corresponding dip the price.

I want to share some candlestick patterns for some new traders who want to learn candlestick charting and i try to make it short and simple so that everyone understand and learn that. Unfortunately i could not attach pictures of formations with the text but they are attached with this post so check out there. Abandoned Baby: A rare Reversal Pattern characterized by a gap followed by a Doji, Which is then followed by another gap in the opposite direction. The Shadows on the Doji must completely gap below or above the shadows of the first and third day. Dark Cloud Cover: A bearish reversal pattern that continues the uptrend with a long white body. The next day opens at a new high then closes below the midpoint of the body of the first day. Doji: Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary, and the resulting candlestick looks like, either a cross, inverted cross, or plus sign. Doji Convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. Downside Tasuki Gap: A continuation pattern with a long, black body followed by another black body that has gapped below the first one. The third day is white and opens within the body of second day, then closes in the gap between the first two days, but does not close the gap. Dragonfly Doji: A Doji where the open and close price are at the high of the day. Like other Doji days, this one normally appears at market turning points. Engulfing Pattern: A reversal Pattern that can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing Pattern) or a downtrend (Bullish engulfing Pattern). The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body. Evening Doji Star: A three day Bearish reversal pattern similar to the Evening star. The uptrend continues with a large white body. the next day opens higher, trades in a small range, then closes at its open (DOJI). The next day Closes below the midpoint of the first day. Evening Star: A bearish continuation pattern that continues an uptrend with a long white body day followed by a gaped up small body day , then a down close with the close below the midpoint of the first day. Falling Three Methods: A bearish continuation pattern. A long black body is followed by three small body days, each fully contained within the range of the high and low of he first day. the fifth day closes at a new low. Gravestone Doji: A doji line that develops when the Doji is at, or very near, the low of the day. Hammer: Hammer candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with along stick. if this candlestick forms during an advance, then it is called a hanging man. Hanging Man: Hanging Man candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with a long stick. if this candlestick forms during a dicline,then it called a Hammer. Harami: A two day pattern that has a small body day completly contained within the range of previous body, and is the opposite color. Harami Cross: A two day pattern similar to the harami. the difference is that the last day is doji. Inverted hammer: A oneday bullish reversal pattern. In a downtrend, the open is lower, then it trades higher, but closes near its open, therefore looking like an inverted Lollipop. Long Day: A long day represents a large price move from open to close, where the length of the candle body is long. Long-Legged Doji: This candlestick has long upper and lower shadows with the Doji in the middle of the day;s trading range, clearly reflecting the indecision of traders. Long Shadows: Candlesticks with along upper shadow and a short lower shadow indicate the buyers dominated during the first part of the session bidding prices higher. conversely, candlesticks with long lower shadows and short upper shadows indicate the sellers dominated during the first part of the session. Marubozo: A candlestick with no shadow extending from the body at either the open, the close or at both. The name means close-croppes or close-cut in Japenese, though other interpretations refer to it as Bald or Shaven Head. Morning Doji Star: A three day bullish reversal pattern that is very similar to the morning star. the first day is in a downtrend with a long black body. The next day opens lower with a Doji that has a small trading range. the last day closes above the midpoint of the first day. Morning Star: A three day bullish reversal Pattern consisting of three candlesticks a long bodied black candle extending the current downtrend, a short middle candle that gapped down on the open, and a long-bodied white candle that gapped up on the open and closed above the midpoint of the body of the first day. Piercing Line: A bullish two day reversal pattern. The first day , in a downtrend, is a long black day. the next day opens at a new low, then closes above the midpoint of the body of the first day. Rising Three Methods: A bullish continuation pattern in which a long white body is followed by three small body days, each fully contained within the range of the high and low of the first day. the fifth day closes at a new high. Shooting Star: A single day pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. it looks just like the Inverted Hammer except that it is bearish. Short Day: A short day represents a small price move from open to close, where the length of the candle body is short. Spinning Top: Candlestick Lines that have small bodies with upper and lower shadows that exceed the length of the body. spinning tops signal indecision. Stars: A candlestick that gaps away from the previous candlestick is said to be in star position. depending on the previous candlestick, the star position candlestick gaps up or down and appears isolated from previous price action. Stick Sandwich: A bullish reversal pattern with two black bodies surrounding a white body. The Closing Prices of the two black bodies must be equal. A support prices is apparent and the opportunity for prices to reverse is quite good. Three Black Crows: A bearish reversal pattern consisting of three Consecutive long black bodies where each day closes at or near its low and opens within the body of the previous day. Three White Soldiers: A bullish reversal pattern consisting of three consecutive long white bodies. Each Should open within the previous body and the close should be near the high of the day. Upside Gap Two Crows: A three day bearish pattern that only happens in an uptrend. the first day is a long White body followed by a gapped open with the small black body remaining gapped above the first day. the third day is also a black day whose body is larger then the second day and engulfs it. The close of the last day is still above the first long white day.

Possibly one of the most underrated trading books of all time. This book is packed with statistical data of every type of technical chart pattern in both bear and bull markets. Bulkowski explains how to trade these patterns with precise measuring rules for exit points. If you are a technical trader this book is a must read. Bulkowski includes a section called "Focus on Failures" for each pattern. From pure technical information, Bulkowski explains how to anticipate such pattern failures. He also points out several patterns that will help traders identify a pattern failure in place. If you are a technical trader based on price patterns this is a true gem to your trading library. This is a great reference book for traders of all levels.

In this thread, Bearbull posted a neat little chart that is more appropriate here. The premise is simple... And the chart that followed the post: It's an interesting trading idea that I thought could get some life here. I'll invite Bearbull over to comment more. A few charts that caught my attention using the same idea: * IMO the yellow highlighted one above would be the primo setup - a pullback to the 20 EMA after a move and an immediate rejection. ================= Is there potential here for a very tradable system? Perhaps. Items to consider: * Entry is only part 1 of the equation, need an exit strategy. * This may or may not be an all day trading system. There needs to be some movement for this to be viable IMO. * Rules of entries could be flexible as some I have highlighted above or more strict like the one highlighted in yellow. * Chart timeframe can make a big difference as well - minute chart, tick charts, volume charts - all could be viable options here.

I was listening to an interview by Peter Reznicek today and found one of his comment particulary interesting. I am not a candlestick pattern trader but he mentions how day traders focus too much on trendline breaks, channel breaks, and candlestick patterns on too short of a timeframe. He mentions how these technical patterns are only valid on a 15 minute or more timeframe. I also agree with his comment. I am not particulary fond of price patterns when day trading. Any thoughts?

Can one rely on strictly chart patterns to trade the markets? For example: triangle, wedges, flags, pennants, etc... Do you think one can make money in the markets in the long run relying only on chart patterns? Thanks

I am a newbie who just recently got out from the Holy Grail Quest phase and I decided to start tape reading. But instead of using T&S I decided to watch 1 tick chart with volume. I don't know if some of you actually do it too, but anyway, I have a question (I guess a noob one). Could anyone give me a hint what the attached pattern means? Apparently it is a big order split into several sequences. Each sequence is made of 8 steps. 9 contracts @ 1875.00 4 contracts @ 1875.00 2 contracts @ 1875.00 1 contract @ 1875.25 4 contracts @ 1875.25 2 contracts @ 1875.25 1 contract @ 1875.00 1 contract @ 1875.00 What is buying and what selling? What is the interpretation of such a pattern? And I am interested if anybody else reads the tape this way. And if there is someone out there, what patterns is he/she looking for.