Trading Lesson 5

It's no secret that the trick to trading is timing.

Timing is everything. While trading is not an exact science it is important to have effective tools under your belt that can assist you in the decision making process. As with any technical analysis you should never use candlesticks by themselves. They are meant as an aid in answering one of the three questions "Where is the market going?, How fast is it getting there?, and When will it arrive?".

In the Liverpool Trading Method candlesticks are able to answer the question "When will it arrive?". If a particular candlestick appears it is fair to assume a reversal is on the horizon. A proper understanding of these key candlestick patterns will help you determine trend reversals and plan accordingly.

If you want to order our FREE currency trading kit, email "Currency Kit" in the subject line to "info@liverpoolgroup.com".

Doji-
-positive reversal on downtrend
-negative on uptrend

Bullish/Bearish Engulfing Signal
- trend reversal
- look for next day

Hanging Man
- Bearish on uptrend

Shooting star
- Bearish reversal
- Need 2nd day confirmation

Hammer
- Bullish reversal
- need 2nd day confirmation

Inverted hammer
- Bullish on downtrend
- Bearish on uptrend

Bullish/Bearish Harami
- Trend reversal at extreme tops or low
- 3rd Confirmation day

Dark Cloud
- Bearish reversal

Piercing Pattern
- Bullish reversal
-needs 3rd day confirmation

Kicker Signal
- Best in overbought, oversold
- trend reversal

If you want the complete candlesticks with images you can request the "candlestick" pdf file or visit www.investopedia.com