There are many models of Bull candle turn. In this paper selected the most popular models for a detailed explanation. Here are some of the key models of bovine turn. In parentheses indicate the number of candles.
"Byche absorption (2)
"Model of the penetration (2)
"Bullish" Harami "(2)
"" Hammer "(1)
"Inverted" Hammer "(1)
"Morning Star" (3)
"Bullish" abandoned child "(3)
"Hammer" and inverted "Hammer" were discussed in the article "Introduction to Japanese Candles, Part 3." This article will be reviewed by the other six models.
Before turning to the individual models should underline some general principles inherent in virtually all models:
"Most models require bovine confirmation.
"Models of bovine turn should be established at the time of the downward trend." There should also be used by other aspects of technical analysis.
Byche confirmation
Models may be formed with one or more candles, most models require bovine confirmation. In fact, turn shows that buyers overcame the pressure of sellers, but still not clear whether the new buyers offer higher prices. Without confirmation, these models are considered neutral and merely indicate, at best, the potential level of support. Byche confirmation means further upward movement may take place in the form of GEPa, long white candles, or raise with a large volume. As the candle model of short-term and usually effective for only 1 or 2 weeks, byche confirmation should occur within 1 -3 days after the formation of a model (for a daily schedule).
The current top-down trend
To be considered as the model turns bullish, must be an existing trend to turn down. Byche absorption in the new maximum is hardly a model of bovine turn. These formations indicate the continuing pressure from customers and may be regarded as a model to continue. In the example of "Ciena" below, the model in the red oval looks like a byche absorption, but the model was formed after improving by about 30 points in the vicinity of soprtivleniya. The model indeed shows the power, but more likely to continue in this place than the model of turn.
The existence of the downward trend can be determined using the moving averages, the analysis of vertex / foundation or trend lines. Market-based instruments can be located in the top-down trend, based on one of the following criteria:
"Market-based instruments traded below its 20-day exponential moving average (EMA).
"Each peak in the back and the subsequent minimum is lower than the previous ones.
"Market-based instruments traded below its trend line.
This is only examples of possible approaches for determining the downward trend. Some traders may prefer a shorter top-down trends and to consider market-based instruments below the 10-day EMA. Determination of criteria depends on trading style and personal preferences.
Other aspects of technical analysis
Candles provide an excellent criterion for determining the short-turn, but they should not be used separately. Other aspects of technical analysis can and should be incorporated to improve reliability in the identification of a turn. Below is three possible approaches, both traditional technical analysis can be combined with an analysis of candles.
Support: Look for bychi Facing near the levels of support to improve reliability. Levels of support can be determined using the moving averages, previous bottom with rollback, trend lines and Fibonacci levels.
"Juniper Networks" (JNPR) rose from 75 to 175 in less than two months. The action has adjusted to approximately 50% of the increase in 100 settlements and formed a large model of bovine uptake in the region of 125. This model has been confirmed in two subsequent increases above a downward trend line.
Pulse: Use oscillators to confirm the growing momentum in conjunction with bovine turn. The positive divergence in MACD, PPO, Stochastics, RSI, StochRSI or Williams% R will indicate on the improvement of the momentum and increase the reliability of the model bovine a turn.
Money Flows: Use volume-based indicators to determine the pressure of buyers or sellers. The balance of the volume (OBV), Chaikin money flow (CMF) and the line of accumulation / distribution can be used in combination with candles. Increasing any of them will improve the reliability of a turn.
For those who want to go further, all three aspects may be combined for the final signal. Looking for a turn in the bovine model of candles near the level of support with a positive divergence, and signs of pressure buyers.
A lot of the signals together to "Compaq" (CPQ) in early July. After a sharp decline at the end of June, the event has formed a number of "tops" some support at around 25. Bull model of absorption, was formed in early July and was confirmed three days later, a strong increase above 27. 10-day slow Stochastic oscillator formed a positive divergence, and moved above its pulse line just before a stock has risen above 27. Although not in the green, but CMF showed constant improvement and progress in the positive territory a week later.
Byche absorption
Model bovine absorption consists of two candles, the first black and white second. The size of the black candle is not so important, but it should not be "dozhi" that it would be relatively easy to absorb. The second should be a long white candle - than it is, the more it looks like bovine. White body to completely absorb the body of the first black candles. Ideally, though not necessarily to the white body covered also shadows. While the shadows and settled, but they usually are either small or absent at the two candles.
After reduction, the second white candle begins to take shape when the pressure forcing sellers market tool to open below the previous closing. Customers come into the game after the opening and pushed prices higher than the previous opening for a strong conclusion and the potential short-turn. Generally, the greater the white candle and more absorption, so more than bovine is turning. Further efforts are needed to ensure customers bovine confirm that turning the model.
In January of 2000., "Sun Microsystems" (SUNW) has formed a couple of models of bovine absorption, which presaged two significant increases. The first was formed in early January after a sharp decline, which increased its share significantly below the 20-day exponential moving average (EMA). Immediate GEO-up confirmed the model as a bull and share climbed up by mid-eightieth figures. After correction to the level of support, was formed in late January, the second model bovine absorption. The action fell below its 20-day EMA and found support at the level of his earlier GEPa. This is also consistent with the correction in the 2 / 3 of the previous raise. Model bovine absorption was formed and was confirmed the next day followed by a strong increase.
Model infiltration
Infiltration model consists of two candles, the first black and white second. Both candles must have a fairly large body, and usually, but not necessarily, small or missing shadows. The white candle should open below the previous closing, and closed above the middle of the body
black candle. Closing below may qualify as a mid-turn, but will not look like enough to bychi.
Also, as with the bovine model of absorption, the pressure is forcing sellers market tool to open below the previous closing, indicating that sellers still prevail after the opening. However, after the opening of the buyers come into the game to move the price up - it will close above the mid-body of the previous black candle. Further efforts to ensure the buyers bovine confirm this model of turn.
In late March and early April 2000. "Ciena" (CIEN) fell from above 80 to about 40. The action initially touched 40 in early April, the long lower shadow. After a strong decline in mid-April event tested support in the region of 40 and re-established model of penetration. Infiltration model was well confirmed by the next day, a strong increase above 50. Even if that was a setback after the confirmation of the action remained above support and has risen above 70. Also pay attention to the model dozhi Morning Star "at the end of May.
Byche "Harami"
Byche "Harami" is composed of two candles. The first is the body and the second a small body, which is entirely located inside the first. There are four possible combinations: white / white, white / black, black / white and black / black candles. Are they models of bovine or Bear turn, all the "Harami" look the same. Their bullish or bearish nature depends on the previous trend. Models "Harami" considered to be potential bychimi a turn after the decline and potential bear after the turn raise. Whatever the color of the first candle, the less the body of the second candle, the more likely a turn. If a small candle is "dozhi, the probability of turn increases.
In his book "Beyond the Candles", Steve Nison asserts that any combination of colors can form a "Harami", but most bychimi are combinations of white / black or white / white candles. As the first candle has a great body, it implies that the model of bovine turn will secure, if the body is white. A long white candle shows the sudden burst of pressure and supported by customers. A small candle then points to the consolidation. Bychi "Harami" with white / white and white / black candles probably occur less frequently than with the black / black or black / white candles.
After the reduction, combined with the black / black or black / white candles may still be regarded as a bullish "Harami". The first long black candle signals that there remains considerable pressure sellers and may indicate a capitulation. A small candle that is formed along with GEPom at the opening points to a sudden increase in pressure and potential buyers turn.
"Micromuse" (MUSE) has fallen by mid-sixtieth figures in April 2000. and start trading in the range, limited levels of 65 and 100 in the next few weeks. After 6 days ago to reduce the level of support at the end of May, was formed bullish "Harami" (red oval). On the first day, was formed long white candle, and the second a small black candle, which could be classified as "dozhi. Raising the next day provided byche confirmation of sale and subsequently grew to about 150.
Hammer
"Hammer" consists of a single candle, white or black, with a small body, long lower shadow and small or no upper shadow. The size of the shadow to the bottom at least twice the length of the body and the range of maximum / minimum must be relatively large (on the range last 10-20 candles). After reduction, the bottom of "the hammer", indicating that the pressure remains sellers. However, a strong closing indicates that buyers are beginning to once again become active. Further efforts of buyers to ensure byche confirm the model of turn.
Nike (NKE) fell from the bottom fiftieth figures until mid-thirtieth figures before found support at the end of February. After a short recovery, the action fell back to the level of support in mid March and formed a "hammer". Byche confirmation occurred two days after a strong increase.
Morning Star
"Morning Star" consists of three candles:
1.Dlinnoy black candle.
2.Malenkoy white or black candle, which was formed with GEPom following the closure of the previous candle. This candle can also be "dozhi, in this case the model will be" morning dozhiz everywhere. "
3.Dlinnoy white candle.
The black candle confirms that the reduction remains in force, and sales are dominated. When the second candle opens with GEPom down, then this confirms further pressure sellers. However, after GEPa, the decline ceases or slows considerably, and a small candle. Small candle indicates indecision and a possible counter-trend. If a small candle is "dozhi, the probability of turn increases. The third long white candle byche provides confirmation of a turn.
After reduction of the level above 180 to below 120, Broadcom (BRCM) has formed a "dozhi morning star" and then rose above 160 in the next three days. This is a strong model of a turn and did not require further confirmation in addition to bovine third long white candles. After above 160, followed by a two-week correction action and formed a model of "penetration" (red arrow), which was confirmed by a large GEPom up.
Bovine "abandoned child"
Bovine "abandoned child" reminds "dozhi morning star and also consists of three candles:
1.Dlinnoy black candle.
2.Dozhi formed with a minimum GEPom below the previous candle.
3.Dlinnoy white candle formed with a higher maximum GEPom "dozhi.
The main difference between the "morning star dozhi and bovine" abandoned child "is GEPe from both sides of the" dozhi. The first GEO-down signals that the pressure remains strong sellers. However, the pressure eased and sellers closing market instruments occurs at or near the opening, creating a "dozhi. After dozhi, GEO-up and long white candle indicates the strong pressure of the buyers and the formation of a turn is completed. Further byche confirmation is not required.
In April, Genzyme (GENZ) fell below its 20-day EMA and has begun to find support in the thirtieth nizah figures. Action start forming the bottom since 17 April, but turning the model was only in late May. Bovine "abandoned child" emerged from a long black candle, "dozhi and long white candle. GEPy on both sides "dozhi" enhanced reliability bovine turn.
"Byche absorption (2)
"Model of the penetration (2)
"Bullish" Harami "(2)
"" Hammer "(1)
"Inverted" Hammer "(1)
"Morning Star" (3)
"Bullish" abandoned child "(3)
"Hammer" and inverted "Hammer" were discussed in the article "Introduction to Japanese Candles, Part 3." This article will be reviewed by the other six models.
Before turning to the individual models should underline some general principles inherent in virtually all models:
"Most models require bovine confirmation.
"Models of bovine turn should be established at the time of the downward trend." There should also be used by other aspects of technical analysis.
Byche confirmation
Models may be formed with one or more candles, most models require bovine confirmation. In fact, turn shows that buyers overcame the pressure of sellers, but still not clear whether the new buyers offer higher prices. Without confirmation, these models are considered neutral and merely indicate, at best, the potential level of support. Byche confirmation means further upward movement may take place in the form of GEPa, long white candles, or raise with a large volume. As the candle model of short-term and usually effective for only 1 or 2 weeks, byche confirmation should occur within 1 -3 days after the formation of a model (for a daily schedule).
The current top-down trend
To be considered as the model turns bullish, must be an existing trend to turn down. Byche absorption in the new maximum is hardly a model of bovine turn. These formations indicate the continuing pressure from customers and may be regarded as a model to continue. In the example of "Ciena" below, the model in the red oval looks like a byche absorption, but the model was formed after improving by about 30 points in the vicinity of soprtivleniya. The model indeed shows the power, but more likely to continue in this place than the model of turn.
The existence of the downward trend can be determined using the moving averages, the analysis of vertex / foundation or trend lines. Market-based instruments can be located in the top-down trend, based on one of the following criteria:"Market-based instruments traded below its 20-day exponential moving average (EMA).
"Each peak in the back and the subsequent minimum is lower than the previous ones.
"Market-based instruments traded below its trend line.
This is only examples of possible approaches for determining the downward trend. Some traders may prefer a shorter top-down trends and to consider market-based instruments below the 10-day EMA. Determination of criteria depends on trading style and personal preferences.
Other aspects of technical analysis
Candles provide an excellent criterion for determining the short-turn, but they should not be used separately. Other aspects of technical analysis can and should be incorporated to improve reliability in the identification of a turn. Below is three possible approaches, both traditional technical analysis can be combined with an analysis of candles.
Support: Look for bychi Facing near the levels of support to improve reliability. Levels of support can be determined using the moving averages, previous bottom with rollback, trend lines and Fibonacci levels.
"Juniper Networks" (JNPR) rose from 75 to 175 in less than two months. The action has adjusted to approximately 50% of the increase in 100 settlements and formed a large model of bovine uptake in the region of 125. This model has been confirmed in two subsequent increases above a downward trend line.
Pulse: Use oscillators to confirm the growing momentum in conjunction with bovine turn. The positive divergence in MACD, PPO, Stochastics, RSI, StochRSI or Williams% R will indicate on the improvement of the momentum and increase the reliability of the model bovine a turn.Money Flows: Use volume-based indicators to determine the pressure of buyers or sellers. The balance of the volume (OBV), Chaikin money flow (CMF) and the line of accumulation / distribution can be used in combination with candles. Increasing any of them will improve the reliability of a turn.
For those who want to go further, all three aspects may be combined for the final signal. Looking for a turn in the bovine model of candles near the level of support with a positive divergence, and signs of pressure buyers.
A lot of the signals together to "Compaq" (CPQ) in early July. After a sharp decline at the end of June, the event has formed a number of "tops" some support at around 25. Bull model of absorption, was formed in early July and was confirmed three days later, a strong increase above 27. 10-day slow Stochastic oscillator formed a positive divergence, and moved above its pulse line just before a stock has risen above 27. Although not in the green, but CMF showed constant improvement and progress in the positive territory a week later.Byche absorption
Model bovine absorption consists of two candles, the first black and white second. The size of the black candle is not so important, but it should not be "dozhi" that it would be relatively easy to absorb. The second should be a long white candle - than it is, the more it looks like bovine. White body to completely absorb the body of the first black candles. Ideally, though not necessarily to the white body covered also shadows. While the shadows and settled, but they usually are either small or absent at the two candles.
After reduction, the second white candle begins to take shape when the pressure forcing sellers market tool to open below the previous closing. Customers come into the game after the opening and pushed prices higher than the previous opening for a strong conclusion and the potential short-turn. Generally, the greater the white candle and more absorption, so more than bovine is turning. Further efforts are needed to ensure customers bovine confirm that turning the model.In January of 2000., "Sun Microsystems" (SUNW) has formed a couple of models of bovine absorption, which presaged two significant increases. The first was formed in early January after a sharp decline, which increased its share significantly below the 20-day exponential moving average (EMA). Immediate GEO-up confirmed the model as a bull and share climbed up by mid-eightieth figures. After correction to the level of support, was formed in late January, the second model bovine absorption. The action fell below its 20-day EMA and found support at the level of his earlier GEPa. This is also consistent with the correction in the 2 / 3 of the previous raise. Model bovine absorption was formed and was confirmed the next day followed by a strong increase.
Model infiltration
Infiltration model consists of two candles, the first black and white second. Both candles must have a fairly large body, and usually, but not necessarily, small or missing shadows. The white candle should open below the previous closing, and closed above the middle of the body
black candle. Closing below may qualify as a mid-turn, but will not look like enough to bychi.
Also, as with the bovine model of absorption, the pressure is forcing sellers market tool to open below the previous closing, indicating that sellers still prevail after the opening. However, after the opening of the buyers come into the game to move the price up - it will close above the mid-body of the previous black candle. Further efforts to ensure the buyers bovine confirm this model of turn.In late March and early April 2000. "Ciena" (CIEN) fell from above 80 to about 40. The action initially touched 40 in early April, the long lower shadow. After a strong decline in mid-April event tested support in the region of 40 and re-established model of penetration. Infiltration model was well confirmed by the next day, a strong increase above 50. Even if that was a setback after the confirmation of the action remained above support and has risen above 70. Also pay attention to the model dozhi Morning Star "at the end of May.
Byche "Harami"
Byche "Harami" is composed of two candles. The first is the body and the second a small body, which is entirely located inside the first. There are four possible combinations: white / white, white / black, black / white and black / black candles. Are they models of bovine or Bear turn, all the "Harami" look the same. Their bullish or bearish nature depends on the previous trend. Models "Harami" considered to be potential bychimi a turn after the decline and potential bear after the turn raise. Whatever the color of the first candle, the less the body of the second candle, the more likely a turn. If a small candle is "dozhi, the probability of turn increases.
In his book "Beyond the Candles", Steve Nison asserts that any combination of colors can form a "Harami", but most bychimi are combinations of white / black or white / white candles. As the first candle has a great body, it implies that the model of bovine turn will secure, if the body is white. A long white candle shows the sudden burst of pressure and supported by customers. A small candle then points to the consolidation. Bychi "Harami" with white / white and white / black candles probably occur less frequently than with the black / black or black / white candles.After the reduction, combined with the black / black or black / white candles may still be regarded as a bullish "Harami". The first long black candle signals that there remains considerable pressure sellers and may indicate a capitulation. A small candle that is formed along with GEPom at the opening points to a sudden increase in pressure and potential buyers turn.
"Micromuse" (MUSE) has fallen by mid-sixtieth figures in April 2000. and start trading in the range, limited levels of 65 and 100 in the next few weeks. After 6 days ago to reduce the level of support at the end of May, was formed bullish "Harami" (red oval). On the first day, was formed long white candle, and the second a small black candle, which could be classified as "dozhi. Raising the next day provided byche confirmation of sale and subsequently grew to about 150.
Hammer
"Hammer" consists of a single candle, white or black, with a small body, long lower shadow and small or no upper shadow. The size of the shadow to the bottom at least twice the length of the body and the range of maximum / minimum must be relatively large (on the range last 10-20 candles). After reduction, the bottom of "the hammer", indicating that the pressure remains sellers. However, a strong closing indicates that buyers are beginning to once again become active. Further efforts of buyers to ensure byche confirm the model of turn.
Nike (NKE) fell from the bottom fiftieth figures until mid-thirtieth figures before found support at the end of February. After a short recovery, the action fell back to the level of support in mid March and formed a "hammer". Byche confirmation occurred two days after a strong increase.
Morning Star
"Morning Star" consists of three candles:
1.Dlinnoy black candle.
2.Malenkoy white or black candle, which was formed with GEPom following the closure of the previous candle. This candle can also be "dozhi, in this case the model will be" morning dozhiz everywhere. "
3.Dlinnoy white candle.
The black candle confirms that the reduction remains in force, and sales are dominated. When the second candle opens with GEPom down, then this confirms further pressure sellers. However, after GEPa, the decline ceases or slows considerably, and a small candle. Small candle indicates indecision and a possible counter-trend. If a small candle is "dozhi, the probability of turn increases. The third long white candle byche provides confirmation of a turn.
After reduction of the level above 180 to below 120, Broadcom (BRCM) has formed a "dozhi morning star" and then rose above 160 in the next three days. This is a strong model of a turn and did not require further confirmation in addition to bovine third long white candles. After above 160, followed by a two-week correction action and formed a model of "penetration" (red arrow), which was confirmed by a large GEPom up.
Bovine "abandoned child"
Bovine "abandoned child" reminds "dozhi morning star and also consists of three candles:
1.Dlinnoy black candle.
2.Dozhi formed with a minimum GEPom below the previous candle.
3.Dlinnoy white candle formed with a higher maximum GEPom "dozhi.
The main difference between the "morning star dozhi and bovine" abandoned child "is GEPe from both sides of the" dozhi. The first GEO-down signals that the pressure remains strong sellers. However, the pressure eased and sellers closing market instruments occurs at or near the opening, creating a "dozhi. After dozhi, GEO-up and long white candle indicates the strong pressure of the buyers and the formation of a turn is completed. Further byche confirmation is not required.
In April, Genzyme (GENZ) fell below its 20-day EMA and has begun to find support in the thirtieth nizah figures. Action start forming the bottom since 17 April, but turning the model was only in late May. Bovine "abandoned child" emerged from a long black candle, "dozhi and long white candle. GEPy on both sides "dozhi" enhanced reliability bovine turn.
Arthur Hill
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