Japanese Candlestick Chart Patterns: (What the Books Don't Show) - YouTube

Channel: Trading Mastermind

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what's the real secret to using Japanese candlesticks in your trading strategy
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there's a lot of misconceptions about how to actually use Japanese candles to
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make profit today I'm going to show you the ultimate secret to how you can use
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Japanese candlesticks for trading that will enable you to get consistent profit
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using Japanese candles the right way so let's get started
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when you're looking at a chart and trading using Japanese candlesticks is
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the best possible way to display price action data it's the foundation for all
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other types of technical analysis but there are a lot of misconceptions about
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exactly how they should be used this is Metatrader simple choice bar
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charts line or candlestick charts then you can customize the color and so forth
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so displaying price data using candlesticks is a pretty basic thing on
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all charts charts that I most recommend or use nowadays would be metatrader5
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trading view or here on motive wave the options that I have this is currently
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displaying candlesticks sometimes I like to adjust the space in between the
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candlesticks so here I have all of these options candlesticks candlesticks trend
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3d candlesticks gives us like 3d quality to the candlesticks candlesticks hallow
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candlesticks flat or you have the various types of high conoces candles
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and in the beginning when people look at those they think that that might
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actually help but I find that it's more useful to have the regular Japanese
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candlesticks than the high conoces candles you can try them take a look at
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them side-by-side you should be able to see what it is I'm talking about if it's
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designed to to keep a trend all one color but in doing so it kind of messes
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up some aspects of the candles I prefer to have a more accurate view which I get
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through Japanese candles so once you actually learn to read the market the
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interesting thing is learning to read financial markets is a lot like learning
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to read a book imagine that you're learning to read a book and the book
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could be a nonfiction technical manual or it could be a book of classic
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literature so as you're reading this book if someone told you that every time
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when you're reading a book every time you see the
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letter L it means that the main characters of the book are going to fall
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in love and start kissing each other you're looking through books and you're
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going all they're doing it there they're doing there you can see that's not very
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accurate or if you're reading something technical and a technical manual or a
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memo from your company and someone told you that every time you see the letter B
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it means you need to report to the main office immediately we can see but that's
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not accurate and that the person who is suggesting this is probably illiterate
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themselves and that's why they're guessing that these are the means so
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it's the same with Japanese candlesticks it's a beautiful way to display price
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data on a chart but after you learn to read the market you will probably never
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be looking at individual candles in here and going oh look there's a hammer or
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there's a doji there's a doji right there that means the market is going to
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reverse immediately and it doesn't mean that at all all these things that's not
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what means anything what really has a meaning is the shape and the pattern of
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the overall highs and lows that you're looking at there for instance if I take
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this little piece of the market right here I'm on the 1-hour I can see that
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that is an ABC correction that there's a trend inside of each of those waves and
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if I go to the 15-minute I will be able to actually view those so now I can see
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this is the perfect shape of a trend I've made quite a few videos and you
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know there's the perfect shape of a trend once again and then this is a
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correction to that trend and this is a pattern that we know as an a B C where
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the a is a trend and then the V is a is a correction and then the C is a trend
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again and these things just keep forming over and over but as I'm looking at this
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I'm reading Japanese candlesticks but my eyes are never focusing in on oh look
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that Candlestick breakers you know let's see
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that's not a bearish engulfing perhaps if I change the timeframe it might
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display a bearish engulfing and that's just almost irrelevant what really is
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relevant is to see these shapes so I assume that everyone is already familiar
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with what Japanese candlesticks are and how to read them for instance if the
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candle body is the color of white blue or green or the color that you chose for
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representing a bullish candle you know that the price went up during that
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period of time if the candle is black to red or the color that you chose to
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represent a bearish candle you instantly know that the price went down during
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that period of time and this is the main reason why Japanese candlesticks are
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much easier to read than bar charts instead of relying on these tiny little
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notches that stick out of the bars representing the open
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clothes it's actually a more recent innovation on bar charts to even change
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the color from the bullish color to the bearish color because originally they
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are all the same color and you had to rely on those little tiny notches and it
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uses a part of the brain that makes it not intuitive not really user friendly
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with Japanese candlesticks relying on the change of color or the change of the
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body of the candle being filled or not filled black or white the brain quickly
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adapts to this type of symbolism making reading financial markets easier and
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more intuitive so the next step for a new trader will be to learn the
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different types of Japanese candles and their names and the meanings within
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market price action in the beginning everybody will learn what is a doji
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what's a bullish engulfing candle what's the hammer how about the three
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Buddha table is that really a specific Japanese candle formation or is it just
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a chart formation three white soldiers tweezer tops and bottoms dark cloud
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cover hanging man Morningstar evening star the her Omni pattern all this
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information is readily available and none of this information has much to do
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with the ultimate secret of how to get profit using Japanese candles but before
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you can learn to appreciate classic literature you have to learn to read and
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write using the English language or whatever language you read and write in
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using the letters of the alphabet and that's what Japanese candlesticks really
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are they are the letters of the alphabet in the language of reading financial
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markets so when you're just learning to trade go ahead and spend a week or two
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familiarizing yourself with the various Japanese candlestick formations and if
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you want to go ahead and memorize the different names and look at them on
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charts and notice for yourself what they mean but then after that there's a next
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step where after you learn what the individual
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letters of the alphabet are you you're not going to go around looking for the
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letter B and saying that means something in a piece of literature you're going to
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look at the overall shape of the highs and lows and you're gonna see that
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you'll get the best results by taking your attention off of the individual
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candles and instead look at the overall pattern and the shape of the highs and
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loans that is how you read the market now when you see this shape you don't
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need to look at any individual candles but the meaning is far more accurate and
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useful than memorizing the various names of the Japanese candlesticks with
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experience study and practice you can develop a higher level of skill for
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reading financial markets a skill that can be truly amazing in terms of the
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actual results that you get in your account if you use a chart that's
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displaying Japanese candlesticks yes that can really help you to see the
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patterns and yes they are a great way of displaying price action data but what
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you really want to see with these candles are the patterns that show if
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the market is forming a trend or a correction if you do this and you master
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it you will develop a refined skill in your chart reading ability and then you
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can become a master of tree and get consistent profit that is considered top
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notch amazing in the industry if you want to find out what really works in
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trade just go to WWE ad mastermind comm or click on the link we have in the
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description below which will take you to a page where you can sign up for our
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free professional trading course and soon you will discover what really works
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for you now I have made another video about the topic of how to read financial
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markets you can watch that video right over here