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First post. Alright!

There are a number of candlestick formations that I'm looking at right now, but I think the clearest setup is coming on the part of AUDNZD. After a false breakout above 1.21 and subsequent congestion below 1.22, the pair has now put in for a big engulfing bear. Since this candle has also broke a rising trend from 10/15 and cleared 1.20 at the same time, I'm thinking this could be a medium term market turn. On that basis, I'm targeting 1.18 as a first target with a stop a 100 points up.

Any thoughts on this formation? Any other setups that look better.

Sometimes the candle setups are hard to find because of the continuous markets in FX, but the reflection of market psychology is the same. That being said, the engulfing patterns on the carry crosses is looking suspicious.

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We are seeing some good follow through on the AUDNZD bearish engulfing candle from yesterday. Now let's see if it can turn into a three black crows formation and lock in strong downside continuation.

For those of you who are relatively new to candlesticks or just need a refresher on the many patterns out there here are a few links to check out:

-A good intro to candlesticks from the man who invariably imported them to the west, Steve Nison

-A step up from Investopedia

-A glossary of bearish patterns from Lit Wick

-A glossary of bullish patterns from Lit Wick

-Another glossary from Candlestickshop.com

If anyone knows of any other sites that are good for Candlesticks, please list them.

hi john kicklighter all candlestick that you show here only useful in non-fx .sorry for your point of view aboyt candlestick .i think that with your rxpression ,corpse inverter candlestick in japan have vibrated .steve nison written himself book in 1992 and this book is about stock no fx market .we must have new point of view about candlestick for example , what use bearish deliberation candlestick in fx market ? no . candlestick is like an exists that have birth (sometime sperm abortion)come of age and death .with know some pattern i think not we can claim again repeat we must change previous point of view about candlestick.someting happend to the commodity forum?

I have been reading Steve Nison's books on candlesticks but found that they are more useable for the futures markets mostly where there are gaps. For a 24/7 market like forex seems like we need something else. Hussin do you have any book recommendations on candlestick patterns for forex?

hi im working on candlestick since four year front , now i have attented that my knowledge about candlestick is very low . i have approximately 56 pattern that myself innovated .these pattern have very distinction with present candlesticks for example this pattern is up with 50-130 p . if every size this pattern change this pattern is lacking necessary qualifications for the present.i have not choice name for this pattern .surprising that this pattern is only for an pair and an timefirm . i cannot more explant to u under various pretexts.

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Oh so you kind of find new candlestick patterns that works for certain pairs, that's very interesting.

every currency have itself special volatility ,so amount of value itself opposite other currency . this is reason make candlestick with different range for example in timefirm 1h gbpusd candlesstick is different with 1h usdyen

It is true that continuous pricing in FX precludes a number of the regular candlestick formations, but it is easy enough to translate most of more popular setups to the continuous pricing in the currency market.

Essentially, candle stick formations reflect changing sentiment in a market. If you see a doji at the top of a rally or bottom of a market correction, it suggests hesitation in a rally or decline. Similarly, a three white soldiers or black crows formation is a strong continuation pattern that would suggest steady buying or selling through a period. So, the continuous pricing and lack of gaps is not that important. And, as for Steve Nison, he has altered his candlestick program for FX.

If you absolutely must have gaps, you can easily adjust your charts to more closely align FX charts to those in stocks and futures. All you have to do is alter the open and close of your daily bars (this won't work on any time frame below a day). You can adjust the open and close to whatever times you want, but I would suggest considering an open when Asian and european liquidity start to mix and then setting a close sometime after the usual US session's activity cools. So a daily candle that has its open at 6:00 GMT and close at 01:00 GMT would cover the active part of a normal session. This is similar to what happens in equities and futures. There is overnight trading for both these assets in electronic markets, so technically, they are also subject to continuous price charts.

Though it is over five hours from closing, the daily candle for USDCAD is putting in for a considerable doji star - an otherwise trustworthy reversal pattern. Looking back over USDCAD historical price action, we haven't seen a tail like the pair is cutting right now (120-plus points) since 6/29 (125) and before that not for years.

Considering the steady drop in USDCAD, this pattern could be indicative of a trend exhaustion before a reversal. Whether it could turn into a short-term reversal (200-400 points to 0.94 or 0.96) or a long-term reversal may rely more squarely on the fundamental factors like central bank interest in the greenback, the Fed's tolerance for further rate cuts and commodity prices.

Taking on a long at this point would be risky (just look at the three black crows on the monthly chart); so I may wait for additional confirmation before taking a trade. For now, I'll look for a small position on long limit order at 0.9235. My risk will be limited to 0.9270 and target will be dependent on how volatility develops. If bullish momentum hasn't built into the retracement a few minutes after the position is triggered, I'll just cut out for for a 35-70 points. On the other hand, if things really start rolling, I'll trail my stop and look for additional entry levels at 0.9460 and 0.9675.

Any one else seeing better dojis in this morning's dollar pullback?

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A great looking doji on Aussie, probably a few days of weakness for Aussie.

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I noticed that candle too. It looks as close to a doji star as we can get with continuous prices; and depending on how today's bar close, it could even turn out to be an abandoned baby (a very bearish formation). At the very least, it looks like a good reversal signal at least in the short term.

However, I'm debating over whether I should play this aggressively or conservatively. Aggressively, and I could get in right now since we are pretty close to the close of the doji. At the same time, that doesn't take into account the selling momentum of the current daily candle. Conservatively, I shouldn't wait for momentum to take us through 0.91 since we have a build up of support in that area. While 150 points would be good for a few days trade, I think the risk isn't worth it. What's more, if this is truly a good candle formation, we could get 400-600 points out of it at least.

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I would also think that there might be a bounce at 0.9100-0.9120 area. So the risk/reward ratio isn't worth it at this time.

And, since I keep seeking out the major reversals, I think it good to point out a lower risk reversal that is building up into a continuation formation. After rebounding from a loose triple bottom on resistance around 0.85, AUDCAD marked a strong rebound. The reversal candle was massive and undoubtedly an engulfing candle. However, this pattern could also be argued to be ladder bottom, which would give it considerably more tout in its upside momentum.

No positions on this formation as I usually only target the 50% mark in ranges and we are already too close. However, I will watch it to see how it unfolds.

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Great looking weekly dojis on many pairs, best looking ones are Cable and Cad for me, any pullbacks is a good time to jump on and ride the wave.

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