Candlestick analysis gives us a detailed study of the open and close price also the high and low price and the colorful representation makes us easy to read and understand. It is very effective as a daily basis and also more effective in weekly basis. Evaluation using candlestick is more effective to predict for a short term like a weeks time.There are many candlestick patterns like bullish/bearish engulfing, bullish/bearish piercing, doji, morning/evening star ,hammer/hanging man

  • : Candlestick analysis gives us a detailed study of the open and close price also the high and low price and the colorful representation makes us easy to read and understand. It is very effective as a daily basis and also more effective in weekly basis. Evaluation using candlestick is more effective to predict for a short term like a weeks time.
  • : Candlestick analysis can be used for weekly forecasting, i.e buying and selling within the week time. Candlestick analysis is very effective for a weekly forecasting and it is very useful tool for the positional traders. Forecasting can be done for 4-5 days using the candlestick pattern.
  • : Candle Stick generally provide us the common psychology behavior pattern of the buyers and sellers for particular time frame, if the candle stick is in Green, we say its dominated by buyers and if candle stick in Red we assume that the sellers are in place. Typically when there is good amount of volume of buys and sells assume that, its good pattern to decide whether buyers or sellers are detonating the market, especially when break out on upside or downside happens we need confirmation of volume to decide who is winning fight.
  • : Engulfing pattern is one of the candle stick pattern or shape of candle which covers the previous candle full body, when this happens with opposite color candle against previous one sided trend, we expect market to change the trend but we can confirm this next same color candle and price opening is above the previous day high. Bull Trend conditions : 1. The Recent fall in price should be witnessed. 2. The latest Bullish Body or Green Candle should cover the previous day Red or Bearish full body candle 3. The Slight increases in trading volume is expected during last two days Bearish Trend Conditions : 1. The Recent ascend/rise in price should be witnessed. 2. The latest Bearish Body or Red Candle should cover the previous day Green full body candle 3. The Slight increases in trading volume is expected during last two days In both bullish or bearish trend one should take trade on second candle (Green or Red candle) confirmation.
  • : Piercing Candle is again one of the candle stick pattern or shape of candle which is reversal trend signal if the latest candle covers the last day low price and the body should be at least covering 50% of previous day candle for bullish trend and vice verse condition for bearish trend. Bull Trend conditions : 1. The Body should cover the previous Days LOW (which is one sided bearish trend fall in price witnessed) 2. Today’s Green Candle should cover at least 50% of the previous day’s red candle body. 3. Upper side tail or Wick should be small or ignorable Bearish Trend Conditions : 1. The Body should cover the previous Days HIGH (which is one sided bullish trend rise in price witnessed) 2. The latest Red Candle should cover at least 50% of the previous day’s green candle body 3. Lower side tail or Wick should be small or ignorable.
  • : A Doji is used to illustrate market indecision and serves as a signal for a reversal in a market that is either upward or downward trending. Doji is again one of the candle stick pattern, its also called neutral candle patter or very small traded range in particular time frame. Doji is also called as indecision candle stick pattern, where in buyer and seller are in fight with price movement and yet to decide on the break out on upper/down side. Sometime this is used as pause for price action or also can give signal for reversal trend after the next candle break out. Generally Doji with High Volume indicates trend reversal. Doji has the following cycle. 1. Appearance of DOJI after a significant Rally/Fall indicates temporary pause. 2. Generally, DOJI with High Volume indicates Trend Reversal 3. The DOJI followed by sideways movement may not be considered.
  • : Bullish and Bearish DOJI is called as morning and evening star by western. the star should be seen after rally and not at sideways. Star indicates the reversal pattern. Morning Star: After significant price fall, if DOJI(starting and ending price is almost same at the center) appears with green body and high volume, it can be identified as morning start. When to buy: Long position can be created when the price goes above the highest price of star(A) and stoploss is the lowest price of the star(B). Risk = A~B and Target: A+(1.5 or 2 times of risk). Selling should happen at the target or stoploss( price goes below B). Evening Star: After significant increase in price if DOJI(thin body) appears with red body and high volume, it can be identified as evening star. When to Sell: Short position can be created when the price goes below the lowest of the star(A) and stop loss is the highest price of the star(B). Risk = A~B and target :A+(1.5 or 2 times of risk). Selling should happen at the target or at stop loss(Price goes above B)
  • : Hammer and hanging man patterns are very reliable and powerful, appears rarely and shows the reversal in trend, hence it is popular. Hammer: It appears after significant price fall. Lower tail should be at least 2 times of the body and upper tail should be very small and body should be green with high volume. When to Buy: Long position can be created when the price increases above the upper tail(A) and stop loss is the lowest price of hammer(B). Risk = A~B, Target: A+ (1.5 or 2 times of risk). Selling should happen when price reaches the target or at stop loss(price goes below B). Hanging Man: It appears after significant increase in price. Upper tail should be atleast 2 times of the body and lower tail should be invisible or small. Body should be red with high volume on that day. When to Sell: Short position can be created when the price goes below the lower tail(A) and stop loss is the highest price of the hanging man(B). Risk = A~B; Target: A+(1.5 to 2 times of risk). Buying should happen when the price reaching the target or at stop loss(price goes above B)
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