The Most Efficient Way to Find Options TradesThose who trade options on a whim, with no rules and no plan, will become food for Wall Street, often blowing out their accounts within months. On the other hand, successful traders spend months, and sometimes years, mastering a few strategies before risking a dime in the markets.
Candlestick Pattern No. 2- The Hanging Man The Hanging Man is a bearish candle that can form at top of trend. It’s typically created when we find a significant sell-off near the market open at top of trend. As the day progresses, buyers begin to force the stock higher to its initial opening prices. When we see this candlestick, it can be an indication that the bulls are just beginning to lose control and demand for the stock or other asset is starting to fall apart. Since the pattern is observed after a push higher, it signals that selling pressure is starting to increase. For example, we can see one following a doji cross at top of trend in early October 2018. Following its appearance, the Dow Jones fell from 26,750 to 25,056. Candlestick Pattern No. 3 – Three White Soldiers This is one of the oddest named candlesticks, but it can be one of the most powerful. We can clearly see them at the tail end of this six-month chart of Bitcoin (BTC). This pattern is typically seen as a bullish candlestick pattern after a strong pullback. If it can maintain this pattern, Bitcoin could stage another big rally following its decline. Typically, the three white soldiers consist of three large bullish candles, each closing higher than the last one. Each candle opens within the body of the one preceding it. Again, though, never rely on just one indicator – such as a candlestick. Always be sure to confirm your findings with other indicators, such as Bollinger Bands, MACD, relative strength (RSI) and Williams’ %R.