Gravestone Doji

On the other hand we have the Gravestone Doji, which is a strong bearish candlestick pattern that occurs at the top of bull trend, often near the highs.

The Gravestone Doji, as a typical Doji has it’s opening and closing at close to the same price. Rarely these two prices are the same price. However the most important feature of the Gravestone doji is that it has a long upward shadow.

This long shadow implies that the market tries to make new highs but find strong bearish resistance that push it all the way down to where prices started off, or opened. Therefore there is an overpowering of the bears over the bulls.

Below is a spread betting example of the Gravestone Doji in a Forex EURUSD trade.

As you can see prices were heading higher in an uptrend, slowed down, then tried to push higher until the bulls found bears defending the higher prices. These bears pushed the prices back to the candlestick’s opening price (gravestone Doji). The candlestick that followed was a strong bearish candlestick.

The Gravestone Doji is extremely helpful to indicate where there is strong resistance. If this resistance is broken we can find a substantial move higher.

In a spread betting system a trader would wait for the following bearish candlestick after the Gravestone Doji, as confirmation of the trend reversal. It is important to use a confirming candlestick. Some more aggressive traders would enter as the Gravestone Doji is formed; maybe with smaller stakes taking on smaller risks.

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Doji Candlestick

A doji is a very strong candle it show a lot of indecision between the bulls and the bears. Often a Doji is sign of reversal but can also be sign of a continuation. Doji’s are normally found at the bottom of a downtrend. Doji refers to both singular and plural.

The formation of the Doji is when the opening and closing price are the same. When the shadow of the Doji is extremely long this type of Doji is called a long legged doji. Then we have the “Rickshaw Man” which is also a Doji but the difference is that the Rickshaw Man has the opening and closing in the middle of the candle.

The Doji represents indecision, as the bears push prices higher, but then the bulls come in and fight prices lower to then end up at the starting point or opening price.

Below is a spread betting example of a Doji formed in a down trend. As you can see the prices were heading lower until the bears started running out of steam and the bulls took over at the end of the downtrend but were pushed back closing in line with the opening price. The following candle the bulls give it a second chance to gain ground and start pushing prices higher. When a Doji manifests it’self this is a reversal warning signal that there might be a change in trend. This signals either to start scaling down on your position, closing your position or to monitor and be on the alert of a price trend change.

The Doji, is a strong indecision candle but not necessarily a reversal candle, hence it is more a warning candlestick than an actual reversal signal.

Forex Spreadbetting Doji on AUDUSD

While looking at your spreadbetting charts always keep an eye out for the Doji. You can also implement this in a spread betting strategy, but do keep in mind that it is more a warning sign than an actual reversal pattern. Now that we have seen what is a Doji, let’s look at intra day how it is formed.

This is a spread betting example of the Doji intra day. There are many ways of forming a Doji.

Prices opened the day after the overnight drift, heading higher, but soon the bears came in pushing prices lower continuing with the main trend down. Prices make new lows but these lows are defended buy the bulls that push prices higher to then return to the opening price.

There are other powerful Doji Patterns

Dragonfly Doji
Gravestone Doji

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Double 14 EMA and Parabolic SAR

Spread betting system Double 14 EMA and Parabolic SAR

This system is quiet simple to follow. You have three spreadbetting indicators setup on your charts:

EMA 14 on the high
EMA 14 on the low
Parbolic SAR

Spread betting system

Spreadbet Long when the prices break above the EMA 14 high and close above. The Parabolic SAR must be below the prices and vice versa: Spreadbet short when the prices break to the downside below the EMA 14 low and the Parabolic SAR is above the price. For those

Time Frame to use: You can try this system on various time frames, as long as when you apply your stoploss you know what 1 Average Unit of trading is. Example, I have applied this system to the DAX 1 HR chart, and the average movement of the germany30 is 30 points.

Risk/Stoploss: My stop loss that I apply is around 40 points and I look for a target of 40 – 60 points, depending on how strong the news is in the market

Important is that you apply rigidly your money management rules as like many moving average cross systems this works wonders in a trending moving market or a market that has a lot of news. Try to avoid trading during big news announcements as there will be a lot of whipsaw volatility in the markets

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Type:Trend preferably /reversal
Timeframe of trade: Swing

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see the Spread betting example below see

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This spread betting system of the Double 14 EMA and Parabolic SAR can be applied to any instrument (FTSE, DJI, S&P, Forex: EurUsd, GBP, JPY, AUD, CAD, CHF, Commodities: Oil, Gold, Shares )as long as you apply good money management rules and it is a market that has movement.

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Price Action- Three Black Crows

This is a very simple setup. No indicators needed just simple price action. You do need to know your candlestick patterns. I will give you all the patterns you need to know and their explanations. This spread betting strategy is applied to BARCLAYS spreadbetting shares , but it is a pattern you can also apply to Forex spread betting, commodities, Indices.

The main setup is to look for prices moving higher in a minor or major price trend. When the retracement occurs and the retracement is a 3 black crow candlestick pattern that stalls on the Moving Average (10 – 20 – 50) this is a good indicator to buy the shares. See the spreadbetting example below:

The buy signal after the 3 black crow candlesticks is stronger if followed by a bullish pattern like the bullish harami pattern:

The down trend stalls, runs into a sideways movement then followed by a breakout.

here is another spread betting example of the three 3 black crow candlesticks followed by a Gap up pattern. If the Gap up window is not closed this becomes a support and short term bullish pattern.

A variation of this spread betting system, is to look for the three black crows on the daily chart. If the forth day does not fall further and a sideways trend occurs on a 15 min time frame. In the bigger picture you will see three black crows followed by a Bullish Harami. On the 5th day look for a break out from the previous day’s range to the up side.

what does it look like on a daily chart:

As prices move higher use your money management to move your stoploss higher.

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Heiken Ashi and Ichimoku cloud

Advanced Spread betting system- Heiken Ashi and Ichimoku cloud

I found this strategy on Forex factory. I have tried it on smaller time frames, but will run the spread betting system on a higher Time frame. This system is part of the Advanced spread betting system as those who apply it should have some understanding of the Ichimoku Kinko Hyo (Ichimoku cloud) charts and the Heiken Ashi charts. I have added a brief explanation in the technical Indicator section.

Description
This is a relatively easy spread betting system. It requires a lot of patience, as more indicators you use the greater the patience needed for the signal to occur. I applied this strategy on the GBPJPY.

Spread-betting long:
The signal: Wait for the Heiken Ashi candlestick bust be above and close above the Kumo. Once the Tenkan Sen has crossed above the Kijun Sen; The Chikou Span must be above the prices and heading higher. Instead in the cloud, the Senkou Span-A would have crossed above the Senkou Span-B; Heiken Ashi candlestick must be positive blue candle.
For those that have a higher risk tolerance they can ignore the Chikou Span.

Spread-betting short:
On the other hand we have a spread bet short which is completely the opposite to the spread betting long. Entry signal would be:
Wait for the Heiken Ashi candlestick bust be below and close below the Kumo. The Tenkan Sen would have crossed the Kijun Sen to the downside; the Chikou Span must be below the prices and heading lower. Instead in the cloud, the Senkou Span A would have crossed the Senkou Span B to the downside; Heiken Ashi candlestick must be a negative red candle.

Your exit strategy:
You will exit either when your money management rules, tell you. Do not risk more than 2-5% of your account or if the trade goes your way wait for the Tenkan Sen to cross the Kijun Sen in the opposite direction.
This is a trend following strategy so you want to try stay in as long as possible.

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Time frame: 1Hr
Tag: GBPJPY
Indicators used : Ichimoku Kinko Hyo (Ichimoku cloud) and the Heiken Ashi charts.
Charts used: GBPJPY
Type:Trend
Timeframe of trade: Swing
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Heiken Ashi candlestick chart

Ichimoku Kinko Hyo Charts

Ichimoku Kinko Hyo charts

Price Action-1-2-3 Trade system

Price Action–1-2-3 Trade system

This strategy is a very simple and logical strategy used throughout the trading world. The Price Action 123 Spread betting Trade System takes a new trade when prices fail to make new highs or new lows. The Spread betting example below is set on a 4HR chart but this can be used on any time frame. I have also pictured this strategy on the EURUSD. This is my favourite pair and the forex spreadbetting pair I specialize in.

There are no indicators, it is all price action. This is considered a reversal strategy.

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Summary
Time frame: 4HR
Tag: EURUSD
Indicators used : None
Type: Price Action
Timeframe of trade: Swing

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Entry Rules:

Entry occurs after a trend has been underway for sometime, and prices have reached extreme levels. These levels will no longer be sustainable, and prices will fail to make new lows or new highs.

Below is a spread betting example of the Price Action–1-2-3 spread betting system.

Spread-betting short:

This is opposite to the above entry signal; instead prices have reached new highs and fail to move higher, interrupting the up trend.

A) 123 – Lower High
After prices have been making new highs and higher Lows, the new highs are not sustainable anymore and the highs make a lower high (3). Here the bears have overpowered the bulls and it is time to trade short unless you a conservative trader that you wait for prices to bear point (2).

B) 123- Double top.
Similar to the above scenario, you will instead have prices form a double top at the highs, fail to break the highs and move lower. Here is your entry signal, or, again if you are a less aggressive trader wait for the prices to break point 2.

Spread-betting long:

There are two buy scenarios:
A) 123 – Higher Low
This scenario is when prices have been falling making Lower Lows and Lower Highs. At the end of the downtrend the low does not make a new low, but makes a higher low. Now you can spreadbet long when prices fail to make a new low. A less aggressive trader will wait for the prices to move higher past point 2 then he buys.

B) 123- Double Bottom
In this scenario, at the end of the downtrend the low does not make a new low, but makes a double bottom, not breaking into new lows. This is a signal to trade long. A less aggressive trader will wait for the prices to move higher past point 2 then trade long.

Exit Rules:
Exit the trade either at target profit or when the opposite signal occurs, that is when the trend fails to continue and new highs or lows fail. Use your money management rules

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Price Action System-morning break out

Price Action System–morning break out

Forex Spread betting

There are many morning break out strategies you will find on the web. I have fount this one to be the most effective.

Time frame: 30 min
Tag: EURUSD
Indicators used : None
Charts used: EURUSD
Type:Trend Trade
Timeframe of trade: Day trade or Swing

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This strategy is very simple, but an advanced spreadbetting strategy as you do need a some trading experience. Look for the overnight range on EURUSD. The optimal setup is when the rage is under 1/3 of the average range and that the overnight range is either in the upper half or the lower half of the previous day’s range.
The overnight range is considered between 20.00 and 8 am UK Time(when the UK stock market opens). soon after the opening you will have big players come into the market and they will push the price in one or the other direction.

Wait for a break out of the overnight range. When there is a pull back towards the range, enter the trade in the direction of the pull back. Look at the example in Spreadbetting example 1:

In the Price action system above. The overnight range was between 1.3307 and 1.3268 . 39 point’s which is roughly 1/3 of the average range of EURUSD. This range formed near the low of the previous range. In the example above there is not a real pullback into the range but there is a strong pause at 1.3250. This pause is considered a pullback in price action.

Above is another Forex spreadbetting example of the morning break out strategy. In picture above, the price action has a retracement in the morning back to the resistance line that has become support. This is where you enter the trade.
You only trade one trade a day, on the optimal setup. If you are a more aggressive trader you could use a stop and reverse strategy.

Exit Rules:

Your profit target is 2/3 of an average day range or target of one full day’s range if you would like to keep it overnight.
Your stop loss is the middle of the overnight range. If after the breakout the trade falls back into range crossing the middle of the overnight range. There is a greater chance that the trend will be in the opposite direction, to the current breakout. Therefore this is your stoploss are.

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Hammer

Bullish Reversal Pattern

What is a hammer?

The hammer is a bullish reversal candlestick. Most bullish reversal patterns this pattern will

-occur within a downtrend or at the bottom of a trend
-Often it is followed by a confirmation candle.

Be aware with bullish reversal candlesticks this is a warning sign of a possible change in trend, but it is not a signal. Traders normally look for confirmation of a change of trend on the next candle.

Formation:

The formation of the hammer , very similar to a hanging man , this is created when the opening, closing and low prices of the candlestick are in the same area. The hammer will have a long downward shadow. Normally the shadow is 2 to 3 times the size of the body. The main difference between the hammer and the hanging man is that the hammer occurs at the bottom of the trend and it is a bullish reversal pattern, instead the hanging man occurs at the top of a trend and it is a bearish reversal pattern.

The hammer as the hanging man is created when we get to an oversold area or support point where the bulls are strong. The bulls will stop the prices from moving any lower and push them back up to the opening price. On the next candle the bulls will push the prices higher. This shows a change in strength and the bulls taking control.

The hammer is a strong reversal pattern.

A hammer is often applied to many price action spread betting strategies. Below is a spread betting example of the hammer.

How to trade the hammer?

Below is a Forex Spread betting example of the EURUSD. As you can see prices started falling until the bears met with the bulls that were strong enough to turn around the prices. In a trading strategy the hammer is your warning signal of a change of trend. The candle stick that follows is a strong bullish candle as it closes near it’s highs. On the close of the confirmation candle will conservative traders enter a new trade.

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