In technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick chart that some believe can predict a particular market movement. There are various candle stick patterns like bullish engulfing, Bearing Engulfing, Doji, Hammer, hanging man, piercing pattern. Candlesticks are a very popular technique used for trading in financial assets like stocks, commodities, and currencies.
- : A candlestick is a type of price chart that displays the high, low, open and closing prices of a stock for a specific period.
- : It is used to spot short term trading opportunities. Different traders make use of candlestick charts differently. Candlestick patterns should be used in conjunction with the prevailing trend.
- : The people who knows Demand and supply should use candlestick. Short term (Weekly) or intraday traders should use candle stick. Volume decides direction of the movement, we can confirm the reversal movement if and only there is a huge volume.
- : It is a Reversal Pattern chart. Conditions: Volume is high during engulfing. When the latest green body covers the previous red body it is called Bullish engulfing pattern. This is were we need buy. When the latest Red body covers the previous green body it is called Bearish engulfing pattern. This is were we need sell.
- : The Piercing Pattern is a bullish candlestick reversal pattern which is formed at the downtrend, or at a possible support. Conditions: Latest Green body should cover previous days low. Bull body should cover atleast 50% of previous day. Upper tail should be smaller in size. Volume may increase. When to buy and sell:- Buy only above previous bearish candle tail. Sell below bullish candle (Latest bullish candle) tail which is also a stop loss.
- : Doji is a neutral pattern. Doji candlesticks look like a cross, inverted cross or plus sign. DoJI Appears after a significant fall or rise with high.
- : Morning doji star pattern is a reversal pattern that appears at the bottom of a down-trend. As a result, its purpose is to turn the current down-trend around into the upwards direction. Evening doji Star Pattern is a reversal candlestick pattern that appears at the top of the up-trend.As a result, its purpose is to turn the current up-trend around into the downwards direction. When price goes above the doji day high it is recommended to buy. Low of the doji (Stop loss) where the buyers are aggressive if the price goes below stop loss exit from that stock. For Target expect atleast 1.5 times from the doji top.
- : A hammer is a type of bullish reversal candlestick pattern which has lower tail minimum two times of its body size which is green in colour and upper tail should be invisible or small in size. A hanging man is a type of bearish reversal pattern. If the body of the candle is black, this pattern is slightly more reliable and the results will be more bearish. Body is green and volume is more then buy. Body is Red and volume is more then sell