Hello friends!
Coming across this content indicates that you are interested in trading the financial markets. You've come to the right place! Gaining experience in the financial markets through trial and error can be challenging. To master trading, start with simple techniques such as japanese candlestick patterns and then gradually increase your knowledge. In the article you're about to read, I've tried to present the High Price Gapping Play candlestick pattern and trading examples. I hope it
will be beneficial.
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| High Price Gapping Play candlestick patterns |
- Topic: High Price Gapping Play
- Type: bullish
- Trend direction: continuation
- Opposite pattern: Low Price Gapping Play
Definition of the "High Price Gapping Play" candlestick pattern
The High Price Gapping Play is known as a continuation pattern in a bull market. It occurs in an uptrend and indicates that the price will continue to rise. The pattern begins with a large bullish candlestick, which represents buying activity. Then, there is nearly equal
activity between buyers and sellers. In this scenario, a brief pause occurs in
the uptrend, which we can identify from the short candles moving horizontally.
Next, an upward gap occurs, disrupting the balance. A new bullish candle opens
above the gap. Buyers now start pushing prices upward again. This means the
uptrend continues its current movement. The components of the High Price
Gapping Play pattern are as follows:
First bullish candle: This candlestick has a long body and
short wicks. It represents the initial bullish candle in the pattern and is
green in color.
Small-bodied candles: After the first long candle, several
small-bodied candles follow, which may be of different colors. All of them are
positioned near the high point of the first candle. These small-bodied candles
represent a period of horizontal consolidation.
Gap: A gap forms above the small-bodied candles in the
pattern. Factors such as strong buyer demand or positive news/events can lead
to an upward gap.
Next bullish candle: A bullish candlestick opens immediately after the gap. This green bullish candlestick completes the pattern and signals the continuation of the uptrend.
The completion of the High Price Gapping Play candlestick
pattern provides a clue that the uptrend may continue. This is because the high
price gap and high volume indicate strong buyer entry into the market,
suggesting that prices may continue to rise.
The "High Price Gapping Play" Candlestick Pattern in Trading
The High Price Gapping Play can signal a possible
continuation of the trend during a bull market. When we find this pattern on
the price chart, we can consider opening a long position. However, it is
recommended to wait for the pattern to complete and to always perform
confirmation before making any hasty decisions. Verifying the completion of the
pattern involves confirming the formation of specific candlesticks.
Confirmation includes using other technical analysis tools and indicators (such
as moving averages, Bollinger Bands, RSI, etc.) to confirm the pattern's
reliability. This waiting process provides a more secure and solid trading
opportunity. The High Price Gapping Play candlestick pattern indicates the
presence of strong buyers in the market and brings forward the idea that prices
may continue to rise.
Entry (Buy): The buy order can be placed above the closing
level of the long green candlestick above the gap.
Stop Loss: The stop loss order can be placed below the
lowest level of the small-bodied candlestick during the horizontal
consolidation period or just below the gap.
Take Profit: When setting targets, technical analysis tools
such as the Fibonacci retracement tool or risk/reward ratios can be used.
On the NVIDIA Corporation stock chart, the example below clearly illustrates how the High Price Gapping Play candlestick pattern signals the continuation of a strong uptrend. This pattern occurs when a stock opens significantly higher than the previous day's close, demonstrating heightened buying interest and strong market sentiment. In this case, the bullish gap indicates that buyers are in control, and the upward momentum is likely to persist. Traders often rely on this pattern to confirm that the stock's price will continue to rise, making it a key signal in trend-following strategies.
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| Example of High Price Gapping Play on NVIDIA stock chart. |
A detail not to be missed: It is important to not disregard risk when trading in the Forex market. The High Price Gapping Play candlestick pattern may not be a definitive method for making trades on its own. It should be confirmed with other technical analysis indicators. Integrating technical and fundamental analysis in trading seems to be a more prudent approach.