Here you can find the details about various candlestick pattern, a japanese analytical technique later adopted by western to predict the price movement for short term. It’s mostly used by weekly traders to perform short term trade. They predominately use candlestick patterns like engulfing, piercing, DOJI, hammer.

Engulfing – seen after a significant fall – latest body of candle should cover the body of previous day candle – indicates trend reversal from bearish to bullish.

Piercing – seen after a significant fall – latest body of the candle should have the lower tail and greater than or equal to 50% of body of previous day candle – indicates trend reversal from bearish to bullish.

DOJI – seen after a significant fall – starting price and ending price of DOJI will be same or minimal difference is seen – indicates trend reversal

Hammer – seen after a significant fall – lower tail of the hammer should be two times the body of the hammer. Upper tail will be or will not be present. It also indicates trend reversal.

For all the above patterns, you may see huge volume on the pattern day and its very previous days.

  • : It's Japanese analytical technique later adopted by western countries to predict short trend of the stock. It's mainly used by weekly traders.
  • : Candlestick analysis are used by weekly trader and its mostly valid only for a week time.
  • : Weekly traders can use candle stick analysis. Volume helps us to identify the participants which can be used to study the demand and supply to perform weekly trade.
  • : It's a trend reversal pattern. There are two types of engulfing - Bulling and Bearish. Bullish engulfing patter is observed after a continuous fall and we can see that the body of the latest candle covers body of the previous day. High volume may be observed on the last two days. Position: long, Buy after the highest price point 'A' of latest candle , keep stop loss at lowest price point 'B' of latest candle, target is A + (difference of A and B). Bearish engulfing is vice versa of bullish engulfing.
  • : Piercing pattern is a trend reversal pattern where you can see a continuous fall for a while. The body of the latest candle covers the tail of the previous day candle and also it should cover 50% of body of previous day candle. High volume may be seen. Upper tail should be smaller in size. Buy above highest price point 'A' of latest or previous day. Place stop loss at lowest price point of latest of previous day. Target = A + (A - B). Here, A-B is the risk taken.
  • : Doji represents neutral. This candle is observed after a significant fall or rally and it indicates a temporary pause to the current trend. DOJI followed by sideways movement should be ignored. Gap between the starting price and ending price of the day of DOJI candle will be less or same at times.
  • : Morning star indicates trend reversal from bearish to bullish. Similarly, evening star indicates trend reversal from bullish to bearish. Buy above highest price point 'A' of Doji. Keep stop loss at lowest price point 'B' of Doji. Target = A + 2(A-B). Here, A-B is the risk taken.
  • : Hammer should appear after a significant fall where the tail of the candle is two times the body of the candle. It may have tiny or no upper tail. Buy above highest price point 'A' of hammer. Place stop loss at lowest price point 'B' of hammer. Target = A + 2(A - B).
  • : Any other candle pattern apart from fore-mentioned are used?
  • : Pattern that's frequently seen and pattern tats rarely seen?
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