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Candle Stick Pattern

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10 views2 pages

Candle Stick Pattern

Uploaded by

teamncgaming
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Candlestick Charts: An Overview

Introduction
A candlestick is a type of price chart used in technical analysis that displays the
high, low, open, and closing prices of a security for a specific period. It originated
from Japanese rice merchants and traders to track market prices and daily
momentum hundreds of years before becoming popularized in the United States .

Components of a Candlestick
A candlestick has three basic features: -
• The body, which represents the open-to-close range.
• The wick, or shadow, that indicates the intra-day high and low.
• The color, which reveals the direction of market movement – a green (or
white) body indicates a price increase, while a red (or black) body shows a
price decrease.

Candlestick Patterns
Candlestick patterns are key indicators on financial charts, offering insights into
market sentiment and price movements3. These patterns emerge from the open,
high, low, and close prices of a security within a given period and are crucial for
making informed trading decisions.

Here are some common candlestick patterns:

1. Bullish Reversal Patterns:


• Hammer
• Three white soldiers
• Inverted hammer
• Piercing Pattern
• Bullish Engulfing
• The Morning Star
• White Marabou
• Three Inside Up
• Bullish Harami
• Tweezer Bottom
• Three Outside Up
• On-Neck Pattern
• Bullish Counterattack

2. Bearish Reversal Patterns:


• Hanging man
• Dark Cloud Cover

Each of these patterns provides different insights into the market and can be used
to predict future price movements.

Conclusion
Candlestick charts are a powerful tool for traders, providing a visual
representation of market movements and offering insights into potential future
price changes. By understanding the various candlestick patterns, traders can
make more informed decisions and potentially increase their chances of
successful trades.

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