Original subtitles

Hello and welcome back to Cryptocurrency Trading Masterclass by wealthy education and this video, we're

going to take a look at price action, trading with inverted hammer and shooting star candlesticks.

So this is like the last video in the sense that it is really only one shape.

It just depends on where it shows up.

And this is the exact opposite of candlesticks you learned.

And the last video it has the same rules can be either color in the body really doesn't matter.

Can also be unchanged.

That's even better.

For the astute of you, you will recognize this as a.

Gravestone dodgy.

Slight difference, there is no peak through, that's what makes the difference between one of these

and a gravestone does you.

So really, at the end of the day, it tells you the same thing.

It tells you the same thing about the psychology.

And that's really what you're paying attention to.

So what's the difference between the two?

Well, shooting star is at the top of an uptrend.

It's a it's a falling star out of the sky, it's a sign of negativity and like the.

Hammer and hanging man, you take the trade on the break of the candlestick, in this case to the downside.

You put a stop loss on the other side.

Now.

An inverted whammer.

It's just simply this it is a hammer.

Look ahead, put a little body here, but it is a hammer at the bottom of a downtrend on a break above

the top of this.

You would recognize this as a bullish sign.

Now, why?

Well, both of these show that the buyers are trying to come in and push the market higher.

They fail and therefore.

You sell off in the case of a shooting star.

And the case of an inverted hammer, you're falling, you're falling, and then you go here, you try

to rally in, the traders fail.

And at this point in time.

It looks very bearish, but what happens if the next day or whatever, they break the top of it?

Well, anybody who's short in this area is in trouble.

So it becomes a bicycle.

On the other hand, if you continue lower, that actually is a continuation signal.

So it kind of serves two purposes.

In that case, you'd be looking at a downtrend, an attempt to rally and then a continuation.

So it's like a continuation hammer in the last video.

So let's take a look at a couple of examples and I'll walk you through.

Our charter, bitcoin.

You can see right here, it's a nice little shooting star.

What does this tell us?

Well, this tells us that we had been rallying for a while.

We reached the previous resistance area and you will see these most of the time as support resistance

areas.

We failed to get above it and then we pulled back.

So once you're underneath the bottom of this candlestick, it's a cell signal.

You got your stop loss up here and then you aim for whatever.

Now, in this case, you might have aimed for a support level.

You know how you choose to trade it.

Now, with hammers and shooting stars, a lot of times you want to see the Bollinger Band, see what

they're doing.

Yes, you did get overextended, so it makes quite a bit of sense.

Your first target, B, the bottom of the Bollinger Band.

So at the very least, you're probably looking at about a almost two to one risk to reward ratio, which

is exactly what you want to see.

This is an inverted hammer.

Now, this is an interesting setup.

And I picked this one because we had dual hammers.

You may recognize this from the last video, but notice.

An inverted hammer, the exact opposite.

So this.

Becomes.

A three candle signal in the sense that this inverted hammer in and of itself is bullish if you break

to the upside, but you also have the support underneath here.

So, again, you kind of have to look at the what the story is that the market's trying to tell you.

Here's an inverted hammer.

And so is this one that just shows that the buyers in this case failed.

But then the next scandal, they push it higher, found a little bit and then eventually broke above

that.

That shows real wherewithal and tenacity.

That's probably the best way to look at when you get a broken inverted hammer to the upside or.

Perhaps.

A hanging man and shows in the last video shows tenacity by the Sellards, they are fighting and fighting

and finding it shows that they are ready to put up a serious fight.

The volunteer band, you can see that the hammers did break down below the inverted hammer, which became

its own signal.

You can see breaking above the top of the volunteer band in this little bit of a squeeze in the second

inverted hammer shows that we are overdone.

But look at that force.

You're looking for momentum in this case.

And then finally here in.

Steller Lewins, you can see that the.

Shooting star form here and here, showing signs of exhaustion.

Now, why is that not a surprise?

Well, it shouldn't be a surprise because we had seen so much in the way of selling pressure just above.

So there's a couple of things going on here that you need to be aware of.

Take a look at this nice rally here, pretty significant pullback.

Nice shot here, but it's a lower high, so that adds more confirmation to a potential selling opportunity.

The.

Indicator's.

You could put this this is your cross here, so we dipped.

Down to here, and then we crossed again to go higher, but notice right here, we have crossed yet

again to the downside that confirms it.

Again, the resistance is probably the most important thing, quite frankly.

But you can look at other indicators.

Obviously, you can see that we tagged the top here.

We almost tagged the top here.

So we were getting stretched anyways.

So it was already kind of leaning a bit lower while in Japan itself, not providing a signal, but does

provide a sign that things are getting a bit stretched, certainly worth paying attention to when you

look at it through that.

Kind of prism, if you will.

And then finally, you can just throw a moving average.

So we'll put an Emma up.

And this is a four hour chart, so you can do nine.

You can also do 20.

You can see that not only did we find support here, but as we started to drift lower, that suggests

that we are possibly overdone.

So going back to the nine.

You can see how the shooting star formed the hammer form, so in a sense, you've got a shooting star.

A neutral candle, a hammer, another shooting star, and then finally the breakdown.

So regardless, you can see that there is a lot going there right at a resistance barrier.

And I would not get too hung up on the exact pip.

You're looking for the attitude in the market.

You want to give it a little bit of room to breathe.

You don't necessarily put your stop loss, for example, one tick or one pip just above the top of the

candlestick.

You want to give it a little bit of room?

You know, you weren't really threatened there.

But in this case, as you are pressing what should be resistance, you could even put your stop loss

as high as that.

Well, then you have to look for a target with your target.

Well, maybe down here where we continue to see reaction in the market, that is still like a two to

one risk to reward ratio again.

There's a fine line between.

Hanging on to every technical and a little bit of artistry, there's a little bit of both going on in

trading and you have to be aware of that.

That's why I don't want to I want to give you a framework, but I don't want to give you.

Cut and dry, you know, if it grows three ticks above the top of this candlestick, you have to get

out because that's not the case here, as you can see.

So you can see that these candlesticks are very reliable, like the ones that I showed you with the

Hammer and the Hanumant, they're just the exact opposite.

So that would be expected.

In the next video, we're going to talk about a triple candlestick pattern called three white soldiers

and three black crows.