CFD Hong Kong 33 Candlestick
Candlestick Pattern Karakasa
Karakasa means Umbrella.
Closing price is higher than the opening price.
It shows a turning point of the market, rise sign that will appear in the lows.
It shows pullback that will appear in the highs this means high possibility turn to the decline in the ceiling.
When Karakasa appear you have to recognize market is turning point.
Identifying Swings in Price Action Trading
Most traders are exposed to indicators like moving averages, MACD, Stochastic when they begin their trading journey.
However, one thing to note is that indicators are mostly lagging by nature because they are dependent on price data on a chart.
It is more beneficial for traders, especially when building a high probability trading plan, to understand leading indicators and how to combine them with lagging indicators.
This is where studying price action on charts comes in.
The first thing about price action is being able to identify swings in a chart.
Swings are significant turning points on a chart, usually in the form of peaks and troughs.
They are usually common around key support and resistance levels.
Swings are variations in the number of candles.
Identification of swings can be discretionary, but more practice and ‘screen time’ can make a trader more aware of where the significant levels are.
Once swings have been identified, the next step is to label them.
There are four labels that traders need to know-
Higher Low (HL)
Higher High (HH)
Lower High (LH)
Lower Low (LL)
The key thing to note when labeling swings is that you must only compare it to the most recent previous swing, not the two or three swings before.
This will allow you to tell whether there has been a change in momentum and direction.
Once traders have identified the swings, the exciting part comes in – identifying phases in the markets.
Markets move in phases, therefore as a trader it’s important to understand price action to identify which phase the market is in.
This would enable traders to use the right tools and strategy to trade the market, as well as manage expectations in regards to stop loss placement and profit taking.
Essentially the market only has three different phases-
Uptrend – a series of higher highs and higher lows
Downtrend – a series of Lower low and lower highs
Consolidation – no specific sequence of swings.