The Cradle Pattern: A Simple Reversal Chart Pattern -- with David Moadel
hello everybody welcome to looking at the markets with David Modell going to
talk about the cradle pattern today all right before I get started if you'd like
help with trading charting patterns putting together a trading plan or
investing plan you can email me for that I do offer coaching my email address for
the coaching is David Modell at gmail.com so let's get into the trade
the cradle pattern here so you see this arrow here so what this arrow arrow
means I want you to pretend in your mind right now that there's a downtrend of
candles okay so candles going candlesticks going down down down right
and then you have this big long bodied red or black candle okay and so this is
a downtrend leading into a long big bodied red or black candle that's the
first part of the cradle pattern okay but then what happens does it keep going
down and down and down no then it goes sideways for a while all right how many
candlesticks does it go sideways well it's not a definite number I mean it
might be three four five six seven whatever it is okay
and so these candlesticks are sideways and they're not up here they're not way
down here they're about about the place where this one closed all right so it's
me they're near the bottom of that big long red or black candle and by the way
this candle it can have wicks all right this example is more of a Mara
bosu candle with no wicks but this one can have wicks that's fine it just has
to have a long red or black body all right so around down here around
near the bottom of this candle starts to go sideways and these are small candles
going sideways these are not big giant candles okay I mean they can have long
long ish wicks but the bodies are mostly small here and so these are indecision
candles the market doesn't know which way to take it for a little while you
even see some you know these right these are doji candle
where the body of the candle is pretty flat or you might see some spinning top
candles where the body is not completely flat but it's small right I don't see
any see any of those here but you get the idea right or you might see some you
know just smallish smallish body candles like this one in this one okay it
doesn't really matter what the color is of the candles it's just that they're
small they're around where the bottom of this one was and they're going sideways
for a while and then you have the reversal okay you have the reversal
candle which is going to be white or green and it's going to have a big body
just like this one had a big body this one also should have a big body a long
body but in the opposite direction and so ultimately this is a the cradle
pattern is a reversal pattern and it kind of resembles a cradle I suppose
right but it's a where it's ultimately a reversal pattern and so what should you
expect after this this candle here with the big long green body and this can and
it can have wicks by the way doesn't have to be a mara BOSU with no no wicks
all right what do market technicians expect after this one well they expect
it as you can see from this arrow they expect the next candles to go up it does
not always work that way okay this does not work a hundred percent of the time
do not expect it to work every time but this is what market technicians might
expect after this because the indecision is over first the the bleeding the
downward price action is over and then the sideways indecision price action is
over and now it's starting to look really bullish and you might expect the
next candles to go up alright so let's take a look at a couple of examples here
here's one notice that it's not an exact science okay it's not looking perfect
like like the textbook example looks all perfect right well in real life it's not
necessarily always like that but still you get the idea here you have a long
bodied red candle at Derr a downtrend you gotta have that
downtrend first for for this to be the cradle pattern downtrend for a while and
then a big red ugly looking scary-looking long bodied red candle but
then the sideways small bodies on these candles right the wicks are not that
small but the bodies are small and it's close to the bottom of this red candle
okay it's not up here it's not down here and then sideways sideways and then big
green candle and what happened afterwards well it worked out as
expected big big uptrend after that all right and
here's another example can you spot it yeah here it is okay downtrend and then
big long bodied red candle goes sideways sideways ish again not it's not perfect
textbook like this all the time it's not perfectly sideways necessarily alright
but small bodied candles here not a lot of decisive action here and then boom
right big long bodied green candle and then what happened after that
trends upward for sure alright does not always happen like that don't expect it
to be perfect so that's the cradle pattern okay so study it learn it know
it you won't see it all the time you won't see it very often but when you do
see it it could possibly oftentimes be powerful for you okay so hope this was
helpful to you the cradle pattern and if you want more help with the stock charts
or fundamentals and just putting together a trading or investing plan
because you really should have one then you can contact me by email for coaching
at David Modell at gmail.com and hey if you like this video you want to show
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video like this one hey thanks a lot for watching and listening
I'll talk to you again soon
you