##### Hello Steemians, ![20211110_124329_0000.png](https://cdn.steemitimages.com/DQmagR9VwLio9NACGJttWBsyqLatCauRkWvESmGHEVKEqhG/20211110_124329_0000.png)*Designed by me on Canva* ![45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png](https://cdn.steemitimages.com/DQmQbPG1eewEEMGwcRaep9jNLjqJUrVAB85FtmPhychnp4i/45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png) **Number 3**

(a) Identifying Candlestick Patterns on any crypto-currency pair chart and explain how the price reacted after the formation of the candlestick

![45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png](https://cdn.steemitimages.com/DQmQbPG1eewEEMGwcRaep9jNLjqJUrVAB85FtmPhychnp4i/45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png) ##### So I will be using my MetaTrader 5 Demo account to identify the following candlestick patterns - **Bullish Engulfing Candlestick Pattern:** This type of candlestick pattern is said to occur when a bullish candle **(green)** completely covers the previous bearish candle **(red),** usually indicating a bullish reversal, and that the market will be experiencing an uptrend in price movement. What this usually means is that buyers are currently taking over the market. ![iMarkup_20211110_105504.jpg](https://cdn.steemitimages.com/DQmVsgimpTuQJMpanXdQHDZ68dKxXxMkkTymwhH6MGCXgAu/iMarkup_20211110_105504.jpg) As you can see on the screenshot above, this is an **EUR/USD** pair chart, using a 5 minutes timeframe. And a **bullish engulfing candlestick pattern** occurred where the green candle completely covered the previous red candle. And after this formation, there was a **bullish reversal,** and an **upward movement** in price. - **Doji Candlestick Pattern:** This type of candlestick pattern is said to occur when the market buyers as well as sellers are both pushing the market **equally.** So many traders regard this as a neutral phase in the market, because no one can decide the direction of the market at this stage. ![iMarkup_20211110_110434.jpg](https://cdn.steemitimages.com/DQmSKZaAf82am5oriMzbQ1KueJ9ZsXfNi7Sv2bK4MPesAua/iMarkup_20211110_110434.jpg) As you can see on the screenshot above, this is a **LTC/RUB** pair chart, using a 30 minutes timeframe. And a **doji candlestick pattern** occurred where the body of the green candle was very small. And after the formation of the doji, a large green-bodied candle followed, meaning the buyers has successfully taken over the market. - **The Hammer Candlestick Pattern:** This type of candlestick pattern is said to occur when a candlestick has a long wick/tail, and usually a small body at the top. It's shape is justⁿ like an hammer🔨, and in most cases it t signifies reversal. ![iMarkup_20211110_111154.jpg](https://cdn.steemitimages.com/DQmYax6vMzGzgukJ1tFoomNSgQKicKrPot8Jrs5JjpfcfMr/iMarkup_20211110_111154.jpg) As you can see on the screenshot above, this is an **XRP/USD** pair chart, using a 5 minutes timeframe. And a **Hammer Candlestick Pattern** occurred at the end of a bearish trend. And after the formation of Hammer Candlestick Pattern, there was a bullish reversal and the price began to go up. - **The Morning and Evening Star Candlestick Pattern:** The Morning and Evening star candlestick pattern refers to two different types of patterns. The morning star candlestick pattern is said to occur where there is a simultaneous formation of a **bearish, doji and bullish** candlestick. It signifies a bullish reversal. ![iMarkup_20211110_112622.jpg](https://cdn.steemitimages.com/DQmb7fcZNLqvxrb7XwrBG6WCfySPCA5UKe67k78kNWc5LPR/iMarkup_20211110_112622.jpg) As you can see on the screenshot above, this is an **XMR/USD** pair chart, using a 5 minutes timeframe. And a **morning star** candlestick pattern was formed where a **bearish, doji and bullish** candlestick occur simultaneously. When the morning star candlestick pattern was formed, a bullish reversal followed immediately as the price began to go up. The evening star candlestick pattern is said to occur when there is a simultaneous formation of a **bullish, doji and bearish** candlestick. It signifies a bearish reversal. ![iMarkup_20211110_111944.jpg](https://cdn.steemitimages.com/DQmZFwZr41tgkNexXkUxpC63QEn119JfxCAm5TKn2NJXUXp/iMarkup_20211110_111944.jpg) As you can see on the screenshot above, this is an **XMR/USD** pair chart, using a 5 minutes timeframe. And an **evening star** candlestick pattern was formed where a **bullish, doji and bearish** candlestick occurred simultaneously. When the evening star candlestick pattern was formed, a bearish reversal followed immediately as the price began to go down. - **The Harami Candlestick Pattern:** The Harami Candlestick Pattern can exist in either a bearish or bullish form. The bullish Harami candlestick pattern is said to occur when a bearish candlestick completely covers the next bullish candlestick. It is usually located at the bottom of a downtrend in the market price. ![iMarkup_20211110_120131.jpg](https://cdn.steemitimages.com/DQmdFfSPo4XG6srVwko2BB4iZmnRos5ZrEiadF6TGQ741Cz/iMarkup_20211110_120131.jpg) As you can see on the screenshot above, this is an **XMR/USD** pair chart, using a 1 hour timeframe. And a **bullish Harami** candlestick pattern was formed where a bearish candle (red) completely covered the bullish candle (green) next to it. After this formation there was an upward movement in the market price. The bearish Harami candlestick pattern is said to occur when a bullish candlestick completely covers the next bearish candlestick. It is usually located at the top of an uptrend in the market price. ![iMarkup_20211110_115144.jpg](https://cdn.steemitimages.com/DQmaCXRTT32WGoZub97ofPDe2rCprxoETfSwDgZ2CEQZkqr/iMarkup_20211110_115144.jpg) As you can see on the screenshot above, this is an **XMR/USD** pair chart, using a 1 hour timeframe. And a **bearish Harami** candlestick pattern was formed where a bullish candle (green) completely covered the bearish candle (red) next to it. After this formation there was a downward movement in the market price. ![45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png](https://cdn.steemitimages.com/DQmQbPG1eewEEMGwcRaep9jNLjqJUrVAB85FtmPhychnp4i/45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png)

(b) Explaining the Measures taken by the trader before trading Candlestick patterns

My reason for taking the trade

The reason why I decided to place a buy order on this crypto pair was because I discovered that a morning star candlestick pattern was formed and it's formation signifies that a bullish reversal is coming. So I placed a buy order to make profit in this bullish run. **Secondly,** I placed a **sell order** on an **XRP/USD** crypto pair using a 1 minute timeframe. As you can see on the screenshot below, here is the crypto chart as well as the position. ![iMarkup_20211110_122244.jpg](https://cdn.steemitimages.com/DQme4vWyLi7b1cK6GidUNw7mfNcL3Te4bxABE6fse6kvL7E/iMarkup_20211110_122244.jpg) And as you can see on the screenshot below, my profit started from **-2.20** and was executed at **3.10.** ![iMarkup_20211110_122521.jpg](https://cdn.steemitimages.com/DQmfBcYKity2xUEC8skR8zPYAUk33JzUNzqVEg2f9Q1VZS9/iMarkup_20211110_122521.jpg)

My reason for taking the trade

The reason why I decided to place a sell order on this crypto pair was because I discovered that an evening star candlestick pattern was formed and it's formation signifies that a bearish reversal is coming. So I placed a sell order to make profit in this bearish run. ![45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png](https://cdn.steemitimages.com/DQmQbPG1eewEEMGwcRaep9jNLjqJUrVAB85FtmPhychnp4i/45GhBmKYa8LQ7FKvbgfn8zqd6W2YEX34pMmaoxBszxVcFZsNYBgcwjb4tc2tSniVhPeBCRsevX7hPS3sJUnT8c4BjKw96tMNS3uJvmVNNcuFMw3mRKzx4DSc9eCRaS...3FmcgUwoskkPCwnDa5YJus6cLtqTuvGDAbvxUr2jELXfiKWAoM6fVy5h7Cjw5quEifQnsG5PyPAbWiwGpnWXvsEdnmJQbMfqFPRUrFTd8UnQqJW5275Tt9NCy4.png)

Conclusion