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Daniel Flores
Daniel Flores

High Profit Candlestick Patterns

Stephen W. Bigalow has studied and implemented candlestick analysis trading techniques into the investment community for over 18 years. His book Profitable Candlestick Trading, published by Wiley & Sons in 2002, has been highly acclaimed for the concise manner it explained how to use candlestick signals profitably. His application of candlestick analysis, with Western technical analysis and fundamental research programs, has been utilized by numerous investment institutions. Mr. Bigalow, through constant research, applying candlestick signals to modern computer technology, is one of the leading Candlestick analysts in the nation. He graduated from Cornell University with a degree in business and finance. He has worked many years with major Wall Street brokerage firms. His educational articles, on utilizing candlestick signals correctly, have been published worldwide. The techniques he has developed have been utilized in the equity markets, commodity markets and Forex trading.

High Profit Candlestick Patterns


Finally, trading candlesticks without any other confluence is not recommended. Although there are well-performing candlestick patterns, we recommend adding other confluence factors to create a robust price action trading system.

There are two things that make this candlestick pattern highly favorable and effective. First, it has a 68% accuracy rate; but second, and perhaps most importantly, it occurs very frequently in the markets, making it a highly tradable pattern. Just one caveat: this pattern works best when the main trend is downward, so be careful when using this trend in a correction of an uptrending market.

I use the following candlestick patterns for day trading almost every day. Intraday trading with candlestick charts is part of my complete stock trading business. Like everything in my stock trading, I learned to find simple basics that provide the best results.

The first profitable candlestick trading pattern is a reversal. Two candles create this candlestick pattern. The first is going in one direction, and the second one completely reverses the previous move. The result is that the move often continues in the direction of the second candle.

The box number two presents a situation with different candlestick chart patterns for day trading. The series of a small-body candles that you can see after several minutes of the strong uptrend is good. It indicates the price needs to rest for some time but that the trend stays intact. The buyers are not selling; they hold the position. The pullback is quite shallow. A volume is often light during this pullback.

The third box shows a strong long-body candlestick. Your trading bullish strategy here is that you should be in the trade already when this happens. This important candlestick trading signal confirms your trading idea. This movement often pushes your trade into a significant profit.

Trading with candlesticks is profitable for day traders. The major problem that affects results of many short-term traders is that they overcomplicate their pre-trade analysis. Avoid too many complications so you can make a clear decision that has a high probability of success. Profitable candlestick trading means keeping your intraday analysis simple.

Max Profit Max profit is incurred when the stock price settles below the lower short put or above the higher short call. Take the strike differential minus the net debit (5 - 4.55)

Max Profit Max profit is incurred when the underlying is outside of the short strikes (below the lower call and above the higher call). Max profit is equal to the credit received (.02). 041b061a72


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