Interesting patterns to identify reversal trend
- : Candle stick analysis is a type of technical analysis. It can be applied in real time to make sure we know whats the open, hight, Low and close price of that stock in everytime interval we set
- : Candle sticks can be used to forecast price movement from daily to weeks time.
- : Candle sticks should be used to know the price movement of that stock by understanding the High, low, open and close values. Confirmation of a trend can happen with the associate volume data
- : Engulfing is a reversal pattern where there is a increase/decrease in price trend. When the previous day candle's body is completely covered with the next days body with color reversal then it denotes a engulfing pattern. Buy: when the price goes above the previous high and stop loss when it goes below the previous low. reward = risk taken Sell: when the price goes below the previous low and stop loss above the previous high
- : piercing is a reversal pattern. if its a down trend in price and the if the previous days red candle is 50% covered with the green candle where the open price is below the previous days low. Buy above previous days's High
- : Doji is trend reversal pattern. Where the open and close of the candle is very near. Need to wait on price movement to confirm the pattern reversal.
- : Morning star is price reversal pattern. when there is decrease in price and suddenly a Doji with green candle appears then buy signal post previous days High and Evening star is when price trend is bullish and a doji with red candle appears. Sell below previous days low.
- : Hammer: It is a reversal trend with the recent price fall. Hammer lower tail should be two times of its body size and the upper tail should be invisible. Green in colour with a high volume indicates bullish movement. Buy when the price exceeds the days high and stop loss below the days low. Hanging man: It is a reversal trend with the recent increase in price. Hanging man upper tail should be two times of its body size and the lower tail should be invisible. Red in colour with a high volume indicates bearish movement. Sell when the price goes below the days low and stop loss above the days high