Pin: The pin formation is one of our favourites; it shows huge emotion of the market indicating a sign of a reversal. In the case of a bearish pin the bulls pushed the market high but failed to hold it, so price returned back to around the open leaving a pin formation. The pin always points away from where price may be heading.
Engulfing: An engulfing candle is a strong change in momentum in the market often seen from bounces off support/resistance areas. For a buy confirmation the first candle would be red followed by a green candle that
completely engulfs the previous one. For a sell confirmation the first candle would be green followed by a red candle that completely engulfs it.
Railroad Tracks: Railroad Tracks are very similar to engulfing candles except they usually close at the same level as the previous candle (within a few pips) instead of engulfing it. This forms two candle bodies which look like a railroad. We introduced this into our trading in late 2010 after seeing this formation over and over
and noticing its power.
Doji: The Doji is generally a small candle indicating a period of indecision with not much movement, the open and close should be almost at the exact same price but it is acceptable within a pip or two. Out of the 4 formations we find this one the least powerful, we prefer to see 2 or 3 Doji’s in a row before we sit up and consider a trade.
More formulas and strategies are welcome from your side. You can send Metastock, MT4 and Amibroker formulas or trading strategies tostockmaniacs@ymail.com. If we think the formula or the strategy is worth publishing the same will be published here. If possible also send your screenshot of the indicator.
Engulfing: An engulfing candle is a strong change in momentum in the market often seen from bounces off support/resistance areas. For a buy confirmation the first candle would be red followed by a green candle that
completely engulfs the previous one. For a sell confirmation the first candle would be green followed by a red candle that completely engulfs it.
and noticing its power.
Doji: The Doji is generally a small candle indicating a period of indecision with not much movement, the open and close should be almost at the exact same price but it is acceptable within a pip or two. Out of the 4 formations we find this one the least powerful, we prefer to see 2 or 3 Doji’s in a row before we sit up and consider a trade.
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