Piercing Line candlesticks pattern |
Hello traders,
welcome to tradersgrip . Today I will discuss in detail about the Bullish Piercing Line
candlestick pattern. This is a highly reliable Reversal bullish candlesticks
pattern. It means now the bearishness in the market is over and the uptrend is
about to begin.
Technical analysis of Bullish Piercing Line candlestick
Formation |
* The Bullish Piercing Line candlesticks pattern consists of
two candles. The first candle is Long Bearish
or Marubozu . It is of red colour.
* The second candle is Long
bullish or Marubozu candlestick . It is
of green colour.
* The second candle should open below the low price of first
candle . ie. The second candle open gapped down the first candle .
* Second candle should close between open price and middle price of first candle.
* The high of the first candle is high of this pattern. And low of second candle
is called low of this pattern.
Where is Piercing Line candle formed ?
formation of piercing line candle |
* It is always formed after a long downtrend in the chart. It is formed at the Bottom of
the chart. After the formation of this pattern, the possibility of bearishness
in the market ends. Buying after getting the confirmation will definitely be
beneficial.
* It forms in every
type of market such as Indian stock
market, commodity market, foreign market etc.
* It appears in intraday charts, daily charts, weekly charts
and monthly charts. In daily charts it works very well.
Where to use it ?
* If you are trading in intraday then watch it in 5 minute ,15
minute and hourly time frame. But it gives good result in hourly time period.
* If you do positional trading then see it in daily chart and
monthly chart.
How to use it?
How to use piercing line |
* Suppose this pattern is formed in the chart. If the new
candle is opened gap-up from this pattern then you have to buy in the market.
* Buy only if the new candle closes above the high of this
pattern. This is very necessary.
* Volume of second candle must be higher than that of first
candle. It indicate that signal is more powerful.
* The stop-loss is to be placed below the low price of this
pattern.
Let us understand this in the chart.
piercing line in chart |
* The Bullish Piercing Line pattern in this chart is formed after a long
downtrend and the volume of the second candle is more than that of the first
candle of this pattern.
* Buy when the new candle closes above the high of this
pattern.
* The new candle in
this chart has closed above this pattern. This is the right time to trade.
* Put a stop-loss at the bottom of this pattern.
When to book profit?
* Until a trend changing signal is received.
important Point
* In Piercing Line candlestick pattern open price of second candle should lie below low price of first candle .
* After the formation of this pattern, one should not buy
until the market price crosses its high.
* Volume of second candle must be higher than that of first
candle.
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