CANDLESTICK ANALYSIS DAY 7

Candlestick charts are used by traders to determine possible price movement based on past patterns. Candlesticks are useful when trading as they show four price points (open, close, high, and low) throughout the period of time the trader specifies. Forecasting can be done for 4-5 days using the candlestick pattern. Traders use candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.
A bullish engulfing pattern occurs in the candlestick chart of a security when a large white candlestick fully engulfs the smaller black candlestick from the period before. This pattern usually occurs during a downtrend and is thought to signal the beginning of a bullish trend in security.
A piercing pattern is a bullish reversal pattern that can be found at the end of a downtrend. This candlestick pattern is used as an indicator to enter a long position or exit the sell position. A DOJI candlestick forms when a security’s open and close are virtually equal for the given time period and generally signals a reversal pattern for technical analysts.
The hanging man and the hammer are both candlestick patterns that indicate trend reversal. The only difference between the two is the nature of the trend in which they appear. If the pattern appears in a chart with an upward trend indicating a bearish reversal, it is called the hanging man. If it appears in a downward trend indicating a bullish reversal, it is a hammer.