Bullish Candlestick Patterns (Use These Candlestick Patterns to Make Money in the Stock Market!) - YouTube

hey guys what is up welcome back to my channel the best place to learn

investing trading and the stock market in this video I'll be going to share

with you the best bullish candlestick patterns so that you can use them in

your candlestick trading there are many bullish candlestick patterns out there

that investors and traders use but one of the biggest mistake that traders who

are starting out make is trying to memorize all these candlestick patterns

and attempt to use them all this usually doesn't end up well it is better to have

a small number of bullish candlestick patterns in your trading

arsenal and being able to recognize them on your price chart rather than trying

to memorize all these candlestick patterns but not actually being able to

recognize and use them on your charts that is why in this video I'll be

sharing with you three powerful bullish candlestick patterns that you can take

away immediately after this video and use it in your candlestick pattern

trading strategy in this video I'll be sharing with you candlestick patterns so

we are taking a look at two and three candlestick patterns if you are just

starting out on candlestick you can check out my video on candlesticks for

beginners here where I share with you what individual candlestick means and

how you can read them so check that video out after you have watched this

video so that you can maximize whatever you have learned in this video alright

let's dive in into my computer and check out the first bullish candlestick

pattern first and most common bullish candlestick pattern I look for is the

bullish engulfing pattern so the bullish engulfing pattern is a two candlestick

pattern and it can indicate a bullish reversal there are two things that we

look out for that helps us confirm a bullish engulfing pattern so the first

is that the first candlestick must be a bearish candlestick and the second

candlestick must be a bullish candlestick so the bearish candlestick

must be followed by a bullish candlestick

that's the first thing that we want to look out for the second thing that we

want to look out for is that the second candlestick must be larger than the body

of the bearish candlestick as you can see on the picture on your

screen the body of the bullish candlestick is larger than the body of

the bearish candlestick so that is why we call it the

bullish engulfing pattern because the body of the bullish candlestick engulfs

the body of the bearish candlestick ideally we also want to see the body of

the bullish candlestick to be larger than the whole bearish candlestick that

means larger than both the body and wicks of the bearish candlestick but

that is more a bonus than a criteria so that's the two criteria we want to look

out for in a bullish engulfing pattern the first is that the first candlestick

must be a bearish candlestick and the second candlestick a bullish candlestick

the second is that the body of the bullish candlestick must be larger than

the body of the bearish candlestick so how do we use the bullish engulfing

pattern there are two main ways to use the bullish engulfing pattern that I

found to have a higher probability of success I like to tell my students that

there is no one indicator that can give you a 100% success rate we just need to

find the indicators that give us a higher probability of success in the

markets and using technical analysis and risk management so that when we win we

win more than when we lose we'll be profitable in the stock market so for

the bullish candlestick patterns that I'll be sharing with you in this video they will

not give you a 100% win rate that's for sure the bullish engulfing pattern will

not give you a 100% win rate but what I discovered is that when we use the

bullish engulfing pattern in these two ways they give you a higher probability

of success and that is what we as traders want in the market not 100%

success rate because that is not possible but to have a higher

probability of success in our trades so the first way to use the bullish

engulfing pattern with greater reliability and probability is to use it

when prices have been on a downtrend and falling for a while and it's close to a

nearby support level so check out my video on support and resistance to learn

how to identify these levels and why they work in this video so when prices

have been on a downtrend and falling for awhile there is greater probability that

prices will reverse and start to rise this is because prices do not fall forever

and when prices are close to a support level prices are more likely to reverse

and start rising at a support level and on top of this if the bullish engulfing

pattern a bullish reversal pattern forms at this point with all these patterns

forming there is greater probability that prices are likely to reverse into an

uptrend when the bullish engulfing pattern appears so the three signs you

want to look out for are first prices have been falling for a while the second

is that there's a support level close by and lastly the formation of the bullish

engulfing pattern this is the first way we want to use the bullish engulfing

pattern the second way is when prices are on an uptrend and it is making a

minor retracement so prices is on a medium and long term uptrend but on a

short term downtrend that is what we call a minor retracement so when prices

encounter a minor retracement and there is a support level close by and the bullish

engulfing pattern forms there is higher probability that prices are likely to

continue the uptrend so some of you may be wondering Linus do we really need

all these additional criteria to use the bullish engulfing pattern can we use the

bullish engulfing pattern by itself I personally don't use the bullish

engulfing pattern just by itself in isolation without taking a look at other

indicators I found through experience that whatever technical indicators I use

they give me a greater probability of success if I use them together rather

than individually so does this mean that I receive fewer signals and

opportunities to enter the market definitely but at the same time every

time I trade I know that my probability of success is higher so back to a

question do we really need all this additional criteria to use the bullish

engulfing pattern yes you need it if you want a higher probability of success

okay let's take a look at some examples on our price charts using the bullish

engulfing pattern along with that other criteria all right so on this price chart

can you identify where the bullish engulfing pattern is take a moment to

pause the video and identify where the bullish engulfing pattern is all right

have you identified where it is great so the bullish engulfing pattern

is at this point so these two candlesticks so remember the two criteria that we

want to look out for for a bullish engulfing pattern is that the

first candlestick must be a bearish candlestick so this red candlestick is

the bearish candlestick the second candlestick must be a bullish

candlestick so this is the bullish candlestick so that's the first criteria

so the second thing is that the body of the bullish candlestick must be larger

and engulfing the body of the bearish candlestick so can you see here that the

body of the bullish candlestick is larger than the body of the bearish

candlestick so that is the two criteria that we want to look out for in a bullish

engulfing pattern so if the candlesticks meet those two criteria we

can say that it is a bullish engulfing pattern so remember one way we want to

use the bullish engulfing pattern is when prices are on a downtrend for a

while so can you see that prices have been declining for a while that's the

first thing the second thing is we want to see that the bullish engulfing

pattern forms at a support level close by so can you see there's a support

level here so that first test was this one so one two and three so that is the

support level so when a bullish engulfing pattern appears on a support

level and after prices have been declining for a while it gives us a

greater probability that prices are likely to rise in the near future so can

you see that after a bullish engulfing pattern appears what happened to prices prices start to rise right so it rose for awhile then it move sideways for a

while also and then after that it starts to pick up and start to rise all the way

so that is one way we want to use the bullish engulfing pattern the second

bullish candlestick pattern that we will take a look at is the morning star

pattern the morning star pattern has three candlesticks so it is a three

candlestick pattern the first candlestick in the morning star pattern

is a bearish candlestick followed by doji

candlestick and lastly a bullish candlestick that's the first thing we

want to look out for in a morning star pattern the second thing we want to look

out for is that there must be a space or gap between the bodies of the bearish

and doji candlestick and a gap between the bodies of the doji candlestick and

bullish candlestick if the candlestick pattern meets these

two criteria then we say that it is a morning star pattern remember that we

want to use candlestick patterns along with other indicators and not in

isolation the morning star pattern is no exception

so what are the indicators we want to look out for that can give us a greater

probability of success so similar with the bullish engulfing pattern we want to

see that prices have been falling and on a downtrend for a while and then there

is a nearby support level and the last one is the formation of the morning star

pattern when we see these three indicators appearing together this gives

us a very strong signal and probability that prices are likely to turn bullish

and start rising the second way is when prices are on a medium and/or long

term uptrend and prices are making a minor retracement and there is a support

level close by and if the morning star appears there is a greater probability

that prices will reverse from a temporary and minor downtrend and back

into an uptrend now that we have know how to identify a morning star pattern

and what other indicators we want to look out for and use along with the

morning star pattern let's take a look at our price charts and see how we can

use the morning star pattern alright so for this price chart can you identify where

the morning star pattern is great so the morning star pattern is here right so we

have the first candlestick being a bearish candlestick followed by a doji

candlestick followed by a bullish candlestick so that's the first criteria

in the morning star pattern the second criteria is that there must be a gap

between the bodies of the bearish and doji candlesticks so can you see that there's

a gap and there must be a gap between the doji candlestick and

the bullish candlestick so can you see that there's also a gap so with those two criteria we can

safely say that that pattern that three candlesticks form a morning star pattern

so remember one of the ways that we want to use the morning star pattern is when

prices are on an uptrend and is making a minor retracement so can you see that

prices are on an uptrend for a while so how do we tell that prices are on

an uptrend for awhile we can tell by the moving averages so you can see that the

shorter term moving average is above the longer term moving average so when the

shorter term moving average is above the longer term moving average it indicates to

us an uptrend so we can say that prices are on an uptrend for a while so how do

we tell that prices are making a minor retracement so can you see there

prices have rose for awhile and recently prices start to decline a bit so this

decline for a bit is like a minor retracement because we know that prices

do not go all the way up or do not go up in a straight line it usually goes up

goes down goes up and goes down in an uptrend so prices do not always go up so

in a minor retracement prices go down for a while

so when prices are on an uptrend and prices make a minor retracement on this

uptrend and a morning star pattern forms can you see what happens after that

there's a greater probability that prices are likely to rise after the

morning star pattern forms so can you see after the morning star

pattern is formed prices start to rise right so that is one way we want to use

the morning star pattern let's take a look at another chart

can you identify where the morning star pattern is right so the morning star

pattern is here so the first candlestick is a bearish candlestick followed

by a doji candlestick and a bullish candlestick so for this example prices

are on an downtrend so how do we know that prices are on a downtrend so we can

tell that when the shorter term moving average is below the longer term moving

average that prices are on a downtrend so when prices are on a downtrend and

the morning star patterns forms it gives us greater probability that

prices are likely to rise in the future so can you see that after the

morning star pattern forms and when prices are on a downtrend and the morning

star pattern forms can you see what happened to prices after that prices

start to rise after that so prices rose for quite a bit after that so that is

another way we want to use the morning star pattern for the third bullish candlestick

pattern we want to take a look at the three white soldier pattern the three

white soldier pattern is a bullish candlestick pattern as it has three

consecutive bullish candlestick forming back-to-back in three straight days so

it is a very strong bullish candlestick pattern the second thing we want to look

out for is that the bullish candlestick must open within the body of the

previous day candlestick and close above the previous day's candlestick like the

bullish engulfing and morning star pattern we want to see the three white

soldier pattern forming after prices have been declining for a while with a

support level close by and the three white soldier pattern appearing the next

pattern that we want to take a look out for is when prices are on a medium and

long term uptrend and is making a minor retracement with a support level close

by and when the three white soldier pattern appears alongside with this

other indicators it will give a greater probability that prices will start

reversing into an uptrend so those are the two ways that we can use the three

white soldier pattern let's take a look at our price charts and see how they work

in real life for this price chart can you identify

where the three white soldier pattern is right so the three white soldier

pattern is here so the first the first thing we want to

take a look at is that there must be three consecutive bullish candlestick so

this is one two and three so that's the first criteria the second criteria is

that the body of the bullish candlestick must open within the body of the

previous day candlestick and close higher than the previous day candlestick

so you can see this one opens within the body of this one and it closed higher

than this candlestick so this one it opens within the body of this one and

close above the body of the previous day's candlestick so if those two criteria are

met then we say that the three candlestick is a three white soldier

pattern so for this example we see that prices are on an uptrend

because the shorter term moving average is above the longer term moving average

and that prices have made a minor retracement so with these two indicators

in place and when the three white soldier pattern form what does it

indicate to us it indicates that prices are likely to rise in the future right

so can you see that after this pattern is form after the three white soldier

pattern is form prices start to rise for a while then it declined for a while but

after it decline for awhile it continued to rise so when the three white soldier

pattern forms on top of an uptrend and when prices are on an uptrend and make a

minor retracement with the three white soldier pattern forming it gives us a

greater indication and probability that prices are likely to rise over time so

that is one way we want to use the three white soldier pattern let's take a look

at another way we can use the three white soldier pattern so on this price chart

can you identify where the three white soldier pattern is take some time

because this price chart contains quite a lot of candlesticks

alright so have you identified where the three white soldier pattern is it's here

right so the first candlestick so that's three consecutive bullish candlestick

and the second candlestick opens within the body of the first

candlestick and close above it the third candlestick opens within the body of the

second and closes above the second candlestick so

when those two criteria are met we say that it is a three white soldier pattern so

for this example prices are on a downtrend so how do we know prices are

on a downtrend can you see that prices have been declining for awhile so that's one way

to tell the other way is to use the moving average so can you see the

shorter term moving average is below the longer term moving average so that is

how we tell that prices are a downtrend so when prices are on a downtrend

and the three white soldier pattern form what does it indicates to us it indicates to

us that prices have a greater probability that

it will rise in the future right so can you see that after the three white soldier

pattern form what happened to prices prices start to rise by a lot right so

that is another way we want to use the three white soldier pattern we want to

use it when prices are on a downtrend and when prices are on a downtrend the

three white soldier pattern form then with these two in place it gives us a

greater probability that prices are likely to rise in the future so those

are the three bullish candlestick patterns that I've used successfully in

the stock market I have intentionally include just three bullish candlestick

patterns so that you can grasp and implement them immediately in your

trading it is better to be a master at a few rather than a jack-of-all-trades

that is my aim for you in this video and I hope that I have achieved that with

this video if you have learned something from this video give it a thumbs up and

comment what is your biggest takeaway from this video and what other technical

analysis videos you want me to create I'll see you in the other videos and if you

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