Candlestick Pattern Analysis Went wrong

Technical Analysis
1

Hello, Today morning I identified a candlestick pattern comprised of 2 candlesticks.
I learned from Zerodha/Varsity that Bearish Harami (following an uptrend) and shooting star right after that Indicates a downtrend.

Based on which I shorted my positions. But this analysis went wrong.

Can Anybody help me understand this much better what went wrong, So I can take positions better in future.
Thanks

PFA screenshot of my analysis

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2

There are couple of things here :

  1. you should have waited for today to confirm the pattern.
  2. The uptrend is not strong.
    Also add volumes and avoid false signals.
1 Like
3

@divyesh only candlestick pattern chart is not enough to take trades , you need to add some indicators to fully analysis the instrument to take trades…
As in there will be some false signals generated ,
There is no 100% results with technical analysis !

1 Like
4

@Mehdi_Abbas thanks for the guidance,
I jumped to take trade as I see 2 bearish convincing patterns generated. That make me to take a trade without looking something else.
I think i should look out for indicators :grinning:
Thanks

5

Hi @rudy17, Thanks for reply

  1. Yes I waited for a couple of days(a shooting star and a big bearish candles generated in these days).
  2. Okay I can see that the uptrend is not powerful
6

The body of the shooting star should form at the top of the previous bullish candle and the open of the bearish candle should also be near the body of the shooting star.

1 Like
7

Okay, So Shooting star is not here relevant.
But what if I took decision just based on the Bearish harami pattern on that very day end ? As it is perfect match I guess !

8

The bearish candle shows the strength of sellers. In this case the sellers are not that strong because they didn’t even succeeded to break the close of the bearish candle which was formed before this shooting star. (You also have to consider the price behaviour of past 2-3 days along with volume also to reach a conclusion. You can not take a trade just on the basis of one day’s candle ).
P.S. You have not added the ‘volume’ indicator beneath your chart. Add that too.

1 Like
9

Yes, Right.
I should also consider other parameters as well.
Thanks for the help :+1:t2: