What is really a Thrusting Line Candlestick Pattern?
A legitimate all-purpose line layout starts using a cubic candle on the graph, accompanied closely by a “thrusting” bullish candlestick. This pattern contributes to further downward pressure on the share exchange. Therefore, being a trader generally you can check out obtain short once the blueprint grows.
It is vital that the starting amount of this next candle gap right down from the final amount of the preceding candle. The other crucial requirement may be that the final level of this next candle not to crossover the mid point of this before all else candle’s human anatomy.
When those two requirements are met, there is a line candlestick design.
Thrusting Line Candlestick Pattern
It is crucial to say the gliding line candlestick pattern isn’t just a reliable stand sign, as two candlesticks is maybe not sufficient to bet on future amount movements.
Therefore, you need to mix the index with other trading methods, to be able to create consistent benefits.
3 Types of Thrusting Line Candlestick Patterns
1 ) Strong Continuation Thrusting Line
The thrusting line using a solid continuation of this bearish trend shows These attributes on the graph:
- The introduction of this next candle is comparatively lower compared to the closing of this before all else candle.
- The final of this next candle is touching the near their before all else candle.
Strong Continuation Thrusting Line
two ) Medium Continuation Thrusting Line
The moderate continuation thrust line layout has got the capacity to send amounts down or up. Such a thrust line layout has the following arrangement:
- The introduction of this next candle is relatively distanced (downwards) from the closing of this before all else candle.
- The final of this next candle is relatively distanced from the mid point of this before all else candle; nevertheless, both candles will need to float.
Medium Continuation Thrusting Line
As you probably noticedthe 2nd candle exhibits a much stronger bullish movement when compared with this sturdy reversal thrusting layout, thus less reliability of a prospective continuation of this pattern.
3) Reversal Thrusting Line
It can also be referred to as a bullish thrusting lineup, or perhaps a feeble continuation . Such a thrusting line candle creation is much more inclined to undo the amount actions, rather than simply go on in direction of this bearish fashion. To obtain a valid bullish thrusting lineup, the layout should exhibit these faculties:
- The introduction of this next candle is all but on precisely the equal par with the closing of this before all else candle.
- The final of this next candle is all but on precisely the equal par with the centre point of this before all else candle.
Reversal Thrusting Line
In this circumstance, the next candle is much more than in the former example. Nevertheless, the layout still reacts to the basic thrusting lineup requirements. The next candle openings down from the near this before all else candle. Additionally, the close of this next candle doesn’t cross the centre point of their before all else candle’s human anatomy.
Trading the Bearish Thrust Line Pattern
Now that we’ve discussed the parameters and also the arrangement of this thrusting lineup layout, it’s the right time for you to trade that the installation.
Bearish Trusting Line Trade Entry
Prior to entrance, you before all else need to confirm the design. This happens each time an 3rd candle is made and shuts underneath the body of this next candle. Which usually means that the candle ought to really be bearish. If this candle sticks underneath the body of this next candle, then we’ve received confirmation of this bearish thrusting pattern onto the graph.
At this time, you’re clear and free to start just a brief position.
Bearish Thrusting Line Stop Loss
The suitable location for the Maximum Thrusting Line continuation design is above the top candle wick of this next candle.
I understand the stop-loss area of the guide is pretty short, but take it seriously. Trading with out an end is just a sure means to see unnecessary annoyance.
Profit Target – Bearish Thrusting Line
There isn’t a fixed target when trading the thrusting line continuation pattern. After all, a continuation pattern can run without stopping.
Therefore, I recommend you use amount action rules and the time and sales for deciding where to close your thrusting Line trade.
Trading the Bullish Thrusting Lines Candlestick Pattern
Now it is time to discuss the opposite scenario related to the thrusting line pattern – the bullish thrusting line pattern.
Bullish Thrusting Line Trade Entry
If you have the reversal version of the thrusting line, then you should be prepared to tackle the pattern with a long trade.
However, you would before all else need to attain the confirmation of the pattern. Again, this happens with a third candle. This time, the third candle needs to be bullish and it needs to break the middle line of the before all else candle. If the third candle closes above this level, then you would need to go long.
Bullish Thrusting Line Stop Loss
Again, it is necessary to secure your bullish thrusting line trade with a stop-loss order. The stop-loss approach of the bullish thrusting method is opposite to the one used for the bearish thrusting method. The right place for your stop-loss would be underneath the lower candle wick of the second candle.
Profit Target – Bullish Thrusting Line
The benefit target rules for the bullish thrusting line method are equal as for the bearish thrusting line. To find the right exit point of your bullish thrusting trade, again, I recommend you use amount action rules and time and sales.
Thrusting Line Pattern and Trend Lines
We will now approach a trading method, where we combine the thrusting line with the trend line indicator.
We will open the trades and place a stop-loss order according to the thrusting line trading approach.
In addition, we will seek assistance from a trend line in order to close our trades.
Bearish Thrusting Line and Trend Lines
Above is the daily chart of Twitter from Nov, 2015 – Feb, 2016. The image illustrates a standard bearish thrusting line trade.
In the green circle, we see a strong continuation thrusting line and its confirmation candle. This makes three candles in the circle. The before all else two are bearish, followed by a bullish candle, which gaps down and closes almost at the close of the before all else candle in the pattern.
The third candle is the confirmation, which breaks the lower level of the second candle’s body.
Stop Looking for a Quick Fix. Learn to Trade the Right Way
Therefore, we have confirmation of a bearish thrusting line on the chart and we short TWTR.
We also place a stop-loss above the second candle in the thrusting line as shown on the image. Now our trade is protected against unexpected amount moves in the opposite direction.
The amount enters a bearish trend afterwards. We have no sense to close the trade after all we only see lower highs on the chart. Therefore, we draw a bearish trend line through the tops on the chart as shown on the image.
We stay in the trade until the amount action breaks the blue bearish trend in a bullish direction. This is shown in the red circle on the chart. We close our Twitter trade and collect benefits.
Next, let’s see how the bullish thrusting line performs in combination with the trend line indicator:
Bullish Thrusting Line Pattern
Above is the daily chart of Goldman Sachs from Jan – Feb, 2015.
The image starts with a bearish amount trend. As you see, we have marked the decreasing tops on the chart with a red bearish trend line.
Suddenly, the amount action creates a thrusting candle line on the chart, which is shown in the green circle.
The pattern starts with a bearish candle and continues with a bullish candle, which creates a tiny bearish gap downwards and closes near the mid-point of the before all else candle. This is a classical bullish thrusting line on the chart.
The next candle is bullish and it breaks the mid-point of the before all else candle from the pattern. At the equal time, the next candle also breaks the red bearish trend line on the chart. This creates a strong long signal on the chart and we purchase GS and place a stop-loss underneath the second candle of the pattern.
Next, we draw a bullish trend line (blue) at the bottom of the amount action. We use this bullish trend to determine an eventual exit point of our long GS trade.
We close the position when Goldman Sachs closes underneath the blue bullish trend.
- The thrusting line is a double candlestick pattern associated with bearish amount trends.
- A valid thrusting line pattern should respond to the following characteristics:
- The before all else candle is bearish.
- The second candle gaps down and is bullish.
- The second candle closes underneath the mid-point of the before all else candle’s body.
- There are three types of thrusting line candlestick patterns:
- Strong Continuation Thrusting Line
- Medium Continuation Thrusting Line
- Reversal Thrusting Line
- Bearish Thrusting Lines should be traded as follows:
- Identify a bearish thrusting line.
- Confirm the pattern with a third candle which breaks the lower body of the second candle.
- Open a short trade.
- Place a stop-loss above the second candle of the pattern.
- Use amount action rules to determine your exit.
- Bullish Thrusting Lines should be as follows:
- Identify a bullish thrusting pattern
- Confirm the pattern with a third candle which breaks above the mid-point of the before all else candle.
- Open a long trade.
- Place a stop-loss order underneath the second candle of the pattern.
- Use amount action rules and time and sales to exit your position.
- The thrusting line pattern is not a good standalone indicator. Therefore, it is good to confirm its signal with an additional indicator.
- A good indicator to trade with the thrusting line is the trend line.
- When you open a trade based on a thrusting line, attempt to measure the amount action with a trend line.
- Stay in the trade until the amount action breaks the trend line indicator in the opposite direction.