ExCandles-v2 indicator shows candlesticks combinations on a chart using the arrows. This indicator is the enhanced version of ExCandles.
Supported candlestick patterns:
Author: Nikolay Kositsin
Veno EA MT5 is a safe and fully automated medium-term trading robot.
The EA does NOT use hedging, martingale, grid strategies, arbitrage, etc.
Veno Expert System MT5 automatically monitors the appearance of participants with distinct preference towards buying or selling on the market. Trades are conducted on sharp cluster and news based movements of the market. The robot analyzes the market volumes and volatility, and follows strong supply and demand movements. It smoothly sets breakeven level
FULL Automatic is a fully autonomous trading robot for MetaТrader 5 without configurable parameters.
It is similar to SAFE Automatic robot intended for traders having no knowledge of trading basics. It works in Low, Medium, High and Extremal trading modes.
The EA applies modified versions of well-known strategies, including Elliott waves, following a trend, half-pyramiding, scalping, speculative trading with a double deposit protection. The EA switches the strategies automati
Cluster analysis of volumes is now available in MetaTrader 5!
The YuСlusters indicator is a professional tool for analyzing the trading volumes. The cluster graph is plotted based on tick data. For the exchange financial instruments these are the volume, type and price of a deal. For the Forex instruments - the real or tick volume (depending on the broker) and Bid price.
There are 6 criteria of cluster generation:
Time interval, the criterion is set in seconds. Price range, the criteri
PZ Lopez Impulse indicator evaluates volatility and price directionality simultaneously. It is an extremely easy to use indicator.
The blue histogram represents the bullish impulse The red histogram represents the bearish impulse The gray histogram represents the current volatility The moving average is the average volatilityThe trading implications are straightforward.
You can buy when the bullish impulse exceeds the average volatility (blue histogram > moving average) You can sell wh
Murray's levels are the most popular support and resistance levels among professional traders. With them, you can easily determine where the price is consolidating and where there is a breakdown of this consolidation. 13 levels have a special role in the price passage. Before you start trading with the help of Murray's levels, be sure to read what these works are based on.
NumBars - number of bars for calculation of the levels (default value - 64, professionals use 200) BackBars
This is the Famous Timing Indicator
You can now use the most famous Timing indicator on the planet.
Millionaire Mostafa Belkhayate earned his reputation by using this specific indicator to validate the entry signals supplied by his also famous Center of Gravity indicator on the Forex market. I spent hours, days, weeks to decrypt the formula and now it is finally available to you.
New and Unique for MetaTrader 5
Timing will give you perfect validations for your entry signals. It is the first
The OandaX product series is designed to display additional data on orders and positions provided by the Oanda FxLabs service.
The OandaX Download Manager EA is included in the OandaX product series and is designed to download data for all OandaX indicators running in the terminal.
To test your trading strategies and for historical data analysis, you can use free OandaX 5 Download Manager BETA. It is similar to Download Manager but provides data with a delay for a day.
Note. The EA uses WebRe
This is a half scalping system that analyzes the market using a transmission function. The system can be scalping or not depending on the "takeprofit" and "stoploss" parameters.
This Expert Advisor is intended for trading on EURUSD, however it can work on other currency pairs. You should use timeframe M1 for trading.
You should optimize only two parameters: Seconds_to_move and TradePrice. It is sufficient to optimize Bobra Adept only once, for example, for a half year period. After that, Bobra
Auto Trade Driver is an automatic powerful tool (run as Expert Advisor) that helps you to manage risk and control orders and maximize your profit in multi-protect/trailing-stop rules.
This tool is very useful for both scalpers and trend followers. It not only calculates the trade risk exactly, but also protects and maximizes your profits in real-time.
With this tool, the only thing you have to do is to enter trade by your own strategy, then it will auto-drive your position with exit strategy y
Range Bars for MetaTrader 5 is a unique tool for conducting technical analysis directly on the charts, as the indicator is an overlay on the main chart. This also enables the trader to place and modify orders directly on the range bar chart (even with the use of one click trading)
Apart from range candles, the indicator also includes the most commonly used technical studies which are 2 moving averages, that can be customized according to the user's needs.
Several channel types can also be disp
The indicator is intended for determining the spread and swap size, the distance for setting stop orders and stop losses from the current price allowed and the risk per 1 point in the deposit currency.
The indicator informs a trader about possible additional expenses and profits connected with transferring a position to the next trade session of the financial instrument. It also informs about the spread size and the distance of pending orders, stop loss and trailing from the current price. In a
This indicator allows you to enjoy the two most popular products for analyzing request volumes and market deals at a favorable price:
Actual Depth of Market Chart Actual Tick Footprint Volume ChartThis product combines the power of both indicators and is provided as a single file.
The functionality of Actual COMBO Depth of Market AND Tick Volume Chart is fully identical to the original indicators. You will enjoy the power of these two products combined into the single super-indicator!
This indicator provides tick volume delta analysis on M1 timeframe. It monitors up and down ticks and sums them up as separate volumes for buys and sells, as well as their delta volumes, and volume clusters on price scale within a specified number of bars. This indicator is similar to VolumeDeltaMT5, which uses almost the same algorithms but does not process ticks and therefore cannot work on M1. This is the reason for VolumeDeltaM1 to exist. On the other hand, VolumeDeltaMT5 can show its signal
This trading panel has been developed for fast and comfortable operation of the financial markets. It is equipped with the necessary functions for manual and semi-automated trading. Due to the presence of the order trailing feature, trailing stop and automatic closure by equity, profit, time. You can use it to automate your trading system. All you have to do is open a position and set the parameters for maintenance, everything else will be handled by the EA. If you want to limit your losses, set
This indicator is based on Moving Average but it's optimized through Price Regression Prediction algorithm.
The script is intended for automatic placing of Buy Stop pending orders, Stop Losses and Take Profits on the user specified levels.
Avoiding unwanted entering a long position in case of false hitting the level as a result of widening of the spread by a dealing center. Avoiding unwanted triggering of a Stop Loss in case a quote pierces a significant level (fractal) without further confirmation with the close price. Setting a necessary virtual order and entering the market in
The fractal analysis of the markets is used in the indicator operation algorithm. According to the fractals theory, after the breakthrough of the fractal level confirmed by the closing price located below or above the fractal, the trend wave in the direction of the breakthrough starts to develop. Until the fractal has been passed in the opposite direction, the trend is considered to be acting even if the price is flat or moves backwards. If a bullish fractal has been previously broken through on
The economic calendar is made in the form of an Expert Advisor that downloads the data from one of the most popular Forex sites (forexfactory.com/calendar.php). The data is presented in two ways. The first (primary) is represented as icons with detailed information about the event. The second is displayed as a line with a news description. Economic Calendar downloads published news in real mode with the possibility to adjust the spacing of data validation and user-friendly customizable graphical
This software has no equals in the world and represents a universal trade "console" covering trading signals, automated market entry, setting of Stop Loss and Take Profit, as well as Trailing Profit for multiple trades at the same time in a single open window. Intuitive control of the Expert Advisor in "three clicks" ensures a comprehensive use of all its functions on different computers, including tablets PCs.
Interacting with additional signal indicators that mark the chart to give a real mar
Safe Automatic is a safe MetaТrader 5 trading robot working autonomously on a VPS server. The good results are achieved on EURUSD.
The EA applies modified versions of a trend-following strategy, half-pyramiding, scalping, Elliott Wave method and speculating trading with a deposit protection. The EA switches the strategies automatically. The robot does not trade at night from 10 p.m. to 4 a.m. (server time).
The robot was tested in the special tester on real ticks. Empirical e
This is a special edition of the On-Balance Volume indicator based on pseudo-real volumes emulated from tick volumes. It calculates a near to real estimation of trade volumes distribution for Forex instruments (where only tick volumes are available) and then applies conventional OBV formula to them.
Volumes are calculated by the same algorithm used in the indicator TrueVolumeSurrogate. The indicator itself is not required but can be used for reference.
OnBalanceVolumeSurrogate is also availabl
Active Lines - a powerful professional tool for operations with lines on charts. Active Lines provides a wide range of actions for events when the price crosses lines. For example: notify, open/modify/close a position, place/remove pending orders. With Active Lines you can assign several tasks to one line, for each of which you can set individual trigger conditions, as well as conditions for re-activations and the number of possible activations.
Active Lines helps you easily organize various tr
Support and Resistance are the important price levels to watch out during intraday market. These price levels are often tested before development of new trend or often stop the existing trend causing trend reversal at this point. Highly precise support and resistance are indispensable for experienced traders. Many typical trading strategies like breakout or trend reversal can be played well around these support and resistance levels. The Precision Support and Resistance are highly accurate suppo
The script is intended for automatic placing of Sell Stop pending orders, Stop Losses and Take Profits on the user specified levels. This script is not that useful as "Virtual pending buy stop", since short positions are opened as Bid price crosses the levels. Thus spread widening is not dangerous. Nevertheless, you need to have this script to prevent unwanted hitting of the Stop Loss levels.
Automation of the process of placing the Sell Stop pending orders, Stop Losses and T
Envelopes or channel lines are set parallel to the Moving Average (to the slow MA if you use two MAs). The two channel lines must contain approximately 95% of all prices for the past two or three months on a daily chart, with only the extremes protruding outside. Channel lines provide attractive profit targets - sell longs near the upper line and cover shorts near the lower line.
The AutoEnvelope is a custom indicator - an original tool that automatically selects channels width by calculating a
Fast Copy MT5 allows you to copy trades between different MetaTrader 5 (netting)(hedge) and MetaTrader 4 accounts in any direction and amount, quickly and easily (without loading the system).
Any type of copying is available
MT4 → MT5 MT4 → MT4 MT5 → MT5 MT5 → MT4
* For the MetaTrader 4 terminal — Fast Copy MT4
* For the MetaTrader 5 terminal — Fast Copy MT5
** Before the purchase, you can test the program by downloading the free demo versions — Fast
This indicator has been created by a former hedge-fund employee and it automatically identifies when a divergence occurs between price and an oscillator. It can identify both bull and bear divergence and it is pre-loaded with four of the most popular oscillators. You can choose from RSI, MACD, Stochastics and CCI.
Remember: When a divergence occurs, it means that price and momentum are not in agreement. And divergence signals are widely used by institutional traders to identify potential revers
FXG_Info – the most important data in one place.
MetaTrader 5 Indicator FXG_Info provides basic statistical information about a particular currency pair. So that in combination with a chart representing currency price it is easy to determine whether the current situation is good for trading. And when you open a position it will clearly show you the current data such as SL, TP, RR. You are not limited to currency. You can use any market which is provided by you broker.
The following information
Easy Order is an Expert Advisor allowing you to enter any type of trade with one click based on your RISK preferences.
You can choose to enter a trade and automatically calculate your lot size based on how much of your account you want to risk. Risk is calculated based on your Stop Loss placement. You can use a fixed lot size if you don't want to use risk based calculation of lot size. Your previous setting of risk based or fixed lot size remains saved for your next use of this Expert Advi
Three variables are available for every strategy, any one of them can be disabled, their period can be changed.
type_order=ORDER_FILLING _FOK - order filling type.
ReverseTrade=false — trades opens in reverse direction if true. ExitOnBar=true — trades close on each bar only. spreadcover=false — Spread you pay includes in profit trades. It's like trade with zero spread but you should remember that it can decrease exact match between tester's result and live one. It
Libraries: MQL5 Wizard - Candlestick Patterns Class
newdigital, 2013.09.10 15:21
Just some basic for traders -
Candlestick charts are an effective way of visualizing price movements. There
are two basic candlesticks:
There are three main parts to a candlestick:
The power of Candlestick Charts is with multiple candlesticks
forming reversal and continuation patterns:
newdigital, 2013.09.10 19:03
Real Body and Upper and Lower Shadows
The rectangular area between the opening and the close of a session of trading is called the real body. The thin lines that look like candle wicks above and below the real body are called shadows. The shadow above the real body is called the upper shadow,
the top end of the upper shadow corresponding to the high of the
session of trading, and the shadow below the real body is called the lower shadow, where the bottom end of the lower shadow corresponds to the low of the session of trading.
When discussing trading sessions based on a trading day (morning to
afternoon), generally speaking the two most significant times of the
trading day are the opening and the close. The opening and the close
create the real body of the candlestick; hence, the most important part
of a candlestick is the real body. By looking at a candlestick, a
person can quickly tell whether traders were eagerly buying throughout
the day (bulls were in charge for the trading day) - the candlestick is
green, or whether traders were eagerly selling throughout the day (bears
dominated the trading day) - the candlestick is red. By looking at the
size of the real body of the candlestick, a trader can tell if the bulls
were significantly in charge of the trading day (a tall green
candlestick) or only moderately in charge of the trading day (a small
green candlestick). Similarly, if a trader sees a large red candle, he
or she can assume that the selling pressure of the bears overpowered the
bulls for the day; however, if the candlestick is very small and red,
then the trader can see that the bears were only slightly more powerful
that day than the bulls. In summary, the real body of a candlestick can
summarize the outcome of a period of trading in an easy to see way –
green = bulls win the trading session, red = bears win the trading
session; and the height of the candle equals the margin of victory for
the bulls or the bears.
Steve Nison (1994) states that “for a [bullish] candle to have meaning,
some Japanese candlestick traders believe that the real body should be
at least three times as long as the previous day’s real body.” (p. 20).
Roads (2008) suggests the following: “determine the area covered by
the difference between the close and the open. If it’s at least 90
percent of the area covered by the difference between the high and low,
you have a long white candle” (p. 76). An example of a computer
charting package’s definition is: “Its Close price is higher than the
Open price; Its body is longer than each shadow; Its body is longer than
the average body size calculated for the specified number of preceding
candles” (ThinkorSwim, 2011).
There are specific versions of the bullish candle. The first is a very bullish candlestick called the bullish marubozu.
The rough translation of marubozu is “bald or little hair” (Rhoads,
2008, p. 74). A marubozu is bald or has little hair because a marubozu
has no upper or lower shadow, or at least a very small upper and/or
lower shadow. This is the most extreme form of the bullish candlestick
because bulls were in charge from the opening to the close; bears were
unable to push prices below the opening price and the trading session
ended with bulls still buying pushing prices upward until the close.
newdigital, 2013.09.11 16:10
Bullish Engulfing Pattern
The Bullish Engulfing Candlestick Pattern is a bullish reversal pattern, usually
occuring at the bottom of a downtrend. The pattern consists of two Candlesticks:
The bearish candle real body of Day 1 is usually contained within the real
body of the bullish candle of Day 2.
On Day 2, the market gaps down; however, the bears do not get very far before
bulls take over and push prices higher, filling in the gap down from the
morning's open and pushing prices past the previous day's open.
The power of the Bullish Engulfing Pattern comes from the incredible change
of sentiment from a bearish gap down in the morning, to a large bullish real
body candle that closes at the highs of the day. Bears have overstayed their
welcome and bulls have taken control of the market.
The chart below of the S&P 500 Depository Receipts Exchange Traded Fund
(SPY) shows an example of a Bullish Engulfing Pattern occuring at the end of a
There are three main times to buy using the Bullish Engulfing Pattern; the
buy signals that are presented below are ordered from the most aggressive to
An example of what usually occurs intra-day during a Bullish Engulfing
Pattern is presented next.
The following 15-minute chart of the S&P 500 exchange traded fund (SPY) is
of the 2-day period comprising the Bullish Engulfing Pattern example on the
newdigital, 2013.09.11 16:21
The Bearish Engulfing Candlestick Pattern is a bearish reversal pattern, usually
occuring at the top of an uptrend. The pattern consists of two Candlesticks:
Generally, the bullish candle real body of Day 1 is contained within the real
body of the bearish candle of Day 2.
The market gaps up (bullish sign) on Day 2; but, the bulls do not push very
far higher before bears take over and push prices further down, not only filling
in the gap down from the morning's open but also pushing prices below the
previous day's open.
With the Bullish Engulfing Pattern, there is an incredible change of
sentiment from the bullish gap up at the open, to the large bearish real body
candle that closed at the lows of the day. Bears have successfully overtaken
bulls for the day and possibly for the next few periods.
The chart below of Verizon (VZ) stock shows an example two Bearish Engulfing
Patterns occuring at the end of uptrends:
Three methodologies for selling using the Bearish Engulfing Pattern are
listed below in order of most aggressive to most conservative:
An example of what usually occurs intra-day during a Bearish Engulfing
Pattern is presented next.
The following 15-minute chart of Verizon (VZ) is of the 2-day period comprising
the Bearish Engulfing Pattern example on the prior page:
newdigital, 2013.09.13 12:10
Dark Cloud Cover
Dark Cloud Cover is a bearish candlestick reversal pattern, similar to the
Bearish Engulfing Pattern (see: Bearish
Engulfing Pattern). There are two components of a Dark Cloud Cover
A Dark Cloud Cover Pattern occurs when a bearish candle on Day 2 closes below
the middle of Day 1's candle.
In addition, price gaps up on Day 2 only to fill the gap and close significantly into the gains made by Day 1's bullish candlestick.
The rejection of the gap up is a bearish sign in and of itself,
but the retracement into the gains of the previous day's gains adds even
more bearish sentiment. Bulls are unable to hold prices higher, demand
is unable to keep up with the building supply.
The chart below of Boeing (BA) stock illustrates an example of the Dark Cloud
Traders usually suggest not selling exactly when one sees the Dark Cloud
Cover Pattern (Day 1 & Day 2) until other confirming signals are given such
as a break of an upward trendline or other technical indicators. One reason for
waiting for confirmation is that the Dark Cloud Cover Pattern is a bearish
pattern, but not as bearish as it could be: part of the gains from Day 1 have
still been preserved.
A more bearish reversal pattern is the Bearish Engulfing Pattern that completely
rejects the gains of Day 1 and usually closes below the lows of Day 1.
newdigital, 2013.09.13 15:57
The Dragonfly Doji is a significant bullish reversal candlestick pattern that
mainly occurs at the bottom of downtrends.
The Dragonfly Doji is created when the open, high, and close are the same or
about the same price (Where the open, high, and close are exactly the same price
is quite rare). The most important part of the Dragonfly Doji is the long lower
The long lower shadow implies that the market tested to find where demand was
located and found it. Bears were able to press prices downward, but an area of
support was found at the low of the day and buying pressure was able to push
prices back up to the opening price. Thus, the bearish advance downward was
entirely rejected by the bulls.
The chart below of the mini-Dow Futures contract illustrates a Dragonfly Doji
occuring at the bottom of a downtrend:
In the chart above of the mini-Dow, the market began the day testing to find
where demand would enter the market. The mini-Dow eventually found support at
the low of the day, so much support and subsequent buying pressure, that prices
were able to close the day approximately where they started the day.
The Dragonfly Doji is an extremely helpful Candlestick pattern to help
traders visually see where support and demand is located. After a downtrend, the
Dragonfly Doji can signal to traders that the downtrend could be over and that
short positions should probably be covered. Other indicators should be used in
conjunction with the Dragonfly Doji pattern to determine buy signals, for
example, a break of a downward trendline.
newdigital, 2013.09.14 19:53
The Evening Star Pattern is a bearish reversal pattern, usually occuring at the
top of an uptrend. The pattern consists of three candlesticks:
The first part of an Evening Star reversal pattern is a large bullish green
candle. On the first day, bulls are definitely in charge, usually new highs were
The second day begins with a bullish gap up. It is
clear from the opening of Day 2 that bulls are in control. However, bulls do not
push prices much higher. The candlestick on Day 2 is quite small and can be
bullish, bearish, or neutral.
Generally speaking, a bearish candle on Day 2 is a stronger sign of an
impending reversal. But it is Day 3 that is the most significant
Day 3 begins with a gap down, (a bearish signal) and
bears are able to press prices even further downward, often eliminating the
gains seen on Day 1.
The chart below of Exxon-Mobil (XOM) stock shows an example a Evening Star
bearish reversal pattern that occured at the end of an uptrend:
Day 1 of the Evening Star pattern for Exxon-Mobil (XOM) stock above was a strong
bullish candle, in fact it was so strong that the close was the same as the high
(very bullish sign). Day 2 continued Day 1's bullish sentiment by gapping up.
However, Day 2 was a Doji, which is a candlestick
signifying indecision. Bulls were unable to continue the large rally of the
previous day; they were only able to close slightly higher than the open.
Day 3 began with a bearish gap down. In fact, bears took hold of Exxon-Mobil
stock the entire day, the open was the same as the high and the close was the
same as the low (a sign of very bearish sentiment). Also, Day 3 powerfully broke
below the upward trendline that had served as support for XOM for the past week. Both the
trendline break and the classic Evening Star pattern gave traders a signal to
sell short Exxon-Mobil stock.
newdigital, 2013.09.16 08:38
The Gravestone Doji is a significant bearish reversal candlestick pattern that
mainly occurs at the top of uptrends.
The Gravestone Doji is created when the open, low, and close are the same or
about the same price (Where the open, low, and close are exactly the same price
is quite rare). The most important part of the Graveston Doji is the long upper
The long upper shadow is generally interpreted by technicians as meaning that
the market is testing to find where supply and potential resistance is
The construction of the Gravestone Doji pattern occurs when bulls are able to
press prices upward.
However, an area of resistance is found at the high of the day
and selling pressure is able to push prices back down to the opening
price. Therefore, the bullish advance upward was entirely rejected by
The chart below of Altria (MO) stock illustrates a Gravestone Doji that
occured at the top of an uptrend:
In the chart above of Altria (MO) stock, the market began the day testing to
find where support would enter the market. Altria eventually found resistance at
the high of the day, and subsequently fell back to the opening's price.
The Gravestone Doji is an extremely helpful Candlestick reversal pattern to
help traders visually see where resistance and supply is likely located. After
an uptrend, the Gravestone Doji can signal to traders that the uptrend could be
over and that long positions should probably be exited. But other indicators
should be used in conjunction with the Gravestone Doji pattern to determine an
actual sell signal. A potential trigger could be a break of the upward trendline
newdigital, 2013.09.16 18:44
The Hammer candlestick formation is a significant bullish reversal candlestick
pattern that mainly occurs at the bottom of downtrends.
The Hammer formation is created when the open, high, and close are roughly
the same price. Also, there is a long lower shadow, twice the length as the real body.
When the high and the close are the same, a bullish Hammer candlestick is
formed and it is considered a stronger formation because the bulls were able to
reject the bears completely plus the bulls were able to push price even more
past the opening price.
In contrast, when the open and high are the same, this Hammer formation is
considered less bullish, but nevertheless bullish. The bulls were able to
counteract the bears, but were not able to bring the price back to the price at
The long lower shadow of the Hammer implies that the market tested to find where
support and demand was located. When the market found the area of support, the
lows of the day, bulls began to push prices higher, near the opening price.
Thus, the bearish advance downward was rejected by the bulls.
The chart below of American International Group (AIG) stock illustrates a Hammer reversal pattern after a downtrend:
In the chart above of AIG, the market began the day testing to find where demand
would enter the market. AIG's stock price eventually found support at the low of
the day. In fact, there was so much support and subsequent buying pressure, that
prices were able to close the day even higher than the open, a very bullish
The Hammer is an extremely helpful candlestick pattern to help traders
visually see where support and demand is located. After a downtrend, the Hammer
can signal to traders that the downtrend could be over and that short positions
should probably be covered.
However, other indicators should be used in conjunction with the Hammer
candlestick pattern to determine buy signals, for example, waiting a day to see
if a rally off of the Hammer formation continues or other chart indications such
as a break of a downward trendline. But other previous day's clues could enter
into a traders analysis. An example of these clues, in the chart above of AIG,
shows three prior day's Doji's (signs of indecision)
that suggested that prices could be reversing trend; in that case and for an
aggressive buyer, the Hammer formation could be the trigger to go long.
The bearish version of the Hammer is the Hanging Man formation
Another similar candlestick pattern to
the Hammer is the Dragonfly Doji
newdigital, 2013.09.17 12:28
The Hanging Man candlestick formation, as one could predict from the name, is a
bearish sign. This pattern occurs mainly at the top of uptrends and is a warning
of a potential reversal downward. It is important to emphasize that the Hanging
Man pattern is a warning of potential price change, not a signal, in and of
itself, to go short.
The Hanging Man formation, just like the Hammer, is
created when the open, high, and close are roughly the same price. Also, there
is a long lower shadow, which should be at least twice the length of the real body.
When the high and the open are the same, a bearish Hanging Man candlestick is
formed and it is considered a stronger bearish sign than when the high and close
are the same, forming a bullish Hanging Man (the bullish Hanging Man is still
bearish, just less so because the day closed with gains).
After a long uptrend, the formation of a Hanging Man is bearish because prices
hesitated by dropping significantly during the day. Granted, buyers came back
into the stock, future, or currency and pushed price back near the open, but the
fact that prices were able to fall significantly shows that bears are testing
the resolve of the bulls. What happens on the next day after the Hanging Man
pattern is what gives traders an idea as to whether or not prices will go higher
The chart below of Alcoa (AA) stock illustrates a Hanging Man, and the large
red bearish candle after the Hanging Man strengthens the bears thinking that a
downward reversal is coming:
In the chart above of Alcoa, the market began the day testing to find where
demand would enter the market. Alcoa's stock price eventually found support at
the low of the day. The bears' excursion downward was halted and prices ended
the day slightly above the close.
Confirmation that the uptrend was in trouble occured when Alcoa gapped down
the next day and continued downward creating a large bearish red candle. To some
traders, this confirmation candle, plus the fact that the upward trendline
support was broken, gave the signal to go short.
It is important to repeat, that the Hanging Man formation is not the sign to
go short; other indicators such as a trendline break or confirmation candle
should be used to generate sell signals.