All language subtitles for 6. The Magic Doji and Isolated Pivots

Hello and welcome, guys, to the next lecture in Section 4.
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I will introduce the last two candlestick patterns, which also make an important part of the support
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and resistance training strategy.
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Firstly, we will study the long-legged doji
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When you look at a trading chart, you will notice various doji's, which is a candle with no real body.
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A doji represents indecision among buyers and sellers.
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As price moves nowhere during this session, both buyers and sellers have control of the price at some
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point during the session before price closes at its opening price, hence making market directionless.
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However, for this strategy, we are only looking to analyze and trade the long-legged doji, or sometimes
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I call it as a magic doji.
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As the name suggests, this single candle formation consists of both large lower and upper tail, or
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wicks with almost no or very small real body.
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Also, you will take trading positions using a long-legged doji both in bull and bear market.
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When analyzing a long-legged doji, you will always keep the following guidelines in mind:
1. Whether this
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long-legged doji appeared after a prolonged move in price and time, this means when a long-legged doji
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appears after an uptrend or downtrend, it reflects the confusion among buyers and sellers, hence
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pointing to a possible reversal whether this long-legged doji is also associated to
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key support or resistance levels.
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A long-legged doji seen at a key level offers
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even higher probability of a trend reversal in sight.
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Let us study long-legged doji using some examples now.
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Guys, I'm using USDCHF to study a long-legged doji. From a major level which acted as
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resistance on this pair, price decline in a clear downtrend before a long-legged doji appeared on a key
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level.
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Notice the extended tails of this doji with very small real body indicating weakness in the market.
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And then market rallied sharply in an uptrend following the appearance of long-legged doji.
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This time, a long-legged doji appeared after an uptrend.
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And then market went into a small consolidation phase on daily charts before the larger downtrend began
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on this pair.
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Guys, there is another long-legged doji on this price chart, as I show you here, which also bought a pause
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to the uptrend.
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The fact that it came at a major level made this doji
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worthwhile as it presented a sell opportunity on this this pair.
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The next example is of GBPCHF and a long-legged doji terminated the existing downtrend
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at a key support zone.
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Notice the large lower tail of this candle signaling sellers were unable to maintain their control
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over the market, therefore, price advanced in a bullish trend.
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The last example is USDJPY forex pair.
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The guidelines stay the same, after a clear upward trend in price, long-legged doji appears at a key level,
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hence providing a high profitable opportunity.
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Please keep in mind that the color of the long legged dog is not important while analyzing market tops
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or market bottoms.
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This also concludes the examples of long-legged doji as we continue studying the last candlestick pattern
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in this strategy.
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Guys, the last candlestick formation you need to know is called isolated pivots.
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This is a three-candle formation, which is seen after both an uptrend and a downtrend, just like
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the doji.
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To understand how isolated pivots look in an uptrend, imagine a market progressing in an uptrend and
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then a candle with a small, real body reveals possible weakness in the market.
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This second candle is also bullish in color, but has a very small, real body and small lower or upper tail.
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And then during the third and final candles, very strong, bearish scandal with a large body appears
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signaling a change in trend.
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Please note that the second or middle candle must have a higher-low compared to the previous candle
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and the next candle. Guys, exactly the opposite applies during a downtrend for isolated pivots.
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Isolated periods are mostly used during sideways price activity, hence they present perfect opportunities
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when market is in a consolidation phase after a sharp trend. To understand isolated pivots,
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let's look at a few examples.
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Here we are looking at CHFJPY daily chart.
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I will quickly apply the support and resistance zones based on the sideways price activity before
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we proceed.
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Notice the three candles here, guys, the first candle was very bullish, signaling the continuation
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of the uptrend.
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Second Candle was also bullish in color, but had a very small real body.
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And finally, third Candle was heavily bearish, indicating the new selling strength in the market.
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The second candle must have a higher closing price compared to the other two candles of the isolated
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pivots to validate the pattern.
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Let's study another example of the USDJPY here.
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The isolated pivots presented trading opportunities at both price support and price resistance zones.
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It is very important that we stick to the guidelines to gain confidence in our analysis.
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Now that we have finished studying all the key patterns that you need to know, I am confident that
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you will use your analysis wisely to achieve your target returns.
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More often than not, you will notice one of these key candlestick patterns on any trading instrument of your
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choice, hence offering potential trading opportunities.
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So traders, this also concludes this lecture and the Section 4 of this course.
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Please go to these lectures thoroughly to understand these patterns carefully, as I promise these are
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all the patterns you need to know to become a successful trader.
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And I will see you in the next lecture.