Candlestick analysis are a simple and powerful tool to understand the market movement.
- : Candle stick analysis is the study of candle shapes to understand the market and predict the market movement. For technical analysis candle stocks are main part of the analysis.
- : Forecasting duration of all candle stocks are for a week or two, this is a short term trading signal.
- : Candle stick simple and powerful way to predict the price movement and understand the market. Volume plays a very important role, whenever a recognizable pattern appears I should be confirmed only if the volume is high. If the volume is low the pattern formed is not valid.
- : engulfing is a trend reversal pattern. There are 2 types of engulfing, Bearish and Bullish. Engulfing happens after a rally either positive or negative. After a negative rally if the new candle formed engulfs the previous day red candle and volume is high, it is called Bullish engulfing. If the next after the engulfing opens with the trend reversal, we can make an entry and stoploss would be low of engulfing candles.
- : Piercing pattern is same as engulfing but the candle body is only partially engulfed. The engulfing candle formed should cover low of the previous day candle. Volume should be higher on the engulfing day. If next day after engulfing indicates a trend reversal we can make an entry and stoploss will be low of engulfing candles.
- : Doji is a neutral candle. Here the opening and closing pricing are same so candle body is formed. It has a small upper and lower tail indicating a shape of star. This also a trend reversal pattern. Volume should be higher on the doji formed day. If the nest day after doji indicates a trend reversal we can make an entry. Doji can appear after both positive and negative rally.
- : If a doji appears after bullish trend it's called evening star. Doji appearing after a bearish trend is called morning star.
- : Hammer and Hanging man are trend reversal candles. Hammer is a bullish candle and Hanging man is a bearish candle.