Candlestick charts provide visual insight to current market psychology. A candlestick displays
the open, high, low and closing prices. Candlesticks are usually composed of the body (black or white), and an upper and a lower shadow (wick): the area between the open and the close is called the real body. The wick illustrates the highest and lowest traded prices of a security during the time interval. The body illustrates the opening and closing trades. The positional traders use the candlestick pattern in determining the price movement, entry and exit points for the trade. The overall market psychology can be tracked through candlestick
analysis. More than just a method of pattern recognition, candlestick analysis shows the interaction between buyers and sellers. A bullish green candlestick indicates opening price of the session being below the closing price and a bearish candlestick shows opening price of the
session being above the closing price. The shadow at top and bottom indicates the high and low for the session.
Therefore if candlestick analysis is studied in combination with other technical analysis tools, candlestick pattern analysis can be a very useful way to select entry and exit
points. Candle stick being a reversal pattern, Volume plays a key role in deciding the direction of the movement of stock. Candlestick analysis is very effective for weekly forecasting by the positional traders.
There are single candle pattern, two candle pattern and three candle pattern.
Hanging Man, Hammer and Doji are single candle pattern. Engulfing candle pattern and Piercing Candle Pattern are two candle pattern and Morning star and evening star are three candle pattern.

1 Comment
  1. Naresh 2 years ago

    Hi,
    We really appreciate the time and effort you put into this practice session.

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