Candlesticks show that emotion by visually representing the size of price moves with different colors. Traders use the candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.,
- : Candlestick charts originated in Japan over 100 years before the West developed the bar and point-and-figure charts. In the 1700-s a Japanese man named Munehisa Homma discovered that, while there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders Candlesticks show that emotion by visually representing the size of price moves with different colors. Traders use the candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.
- : its depends upon which time frame candle we are using, if we are using one day time frame we can forecast for next few days, we cant forecast for a month by using day candle
- : Intraday traders and short term traders can use candle stick patterns,Volume plays a key role in deciding the direction of the movement, traders can confirm the reversal movement if and only there is a huge volume of stocks are traded.
- : An engulfing pattern on the bullish side of the market takes place when buyers outpace sellers. This is reflected in the chart by a long green real body engulfing a small red real body. With bulls having established some control, the price could head higher.A bearish engulfing pattern develops in an uptrend when sellers outnumber buyers. This action is reflected by a long red real body engulfing a small green real body. The pattern indicates that sellers are back in control and that the price could continue to decline. BUY: above the engulfing pattern(long green candle) in bullish trend STOP LOSS: should be below the engulfing candle wise versa SELL: below the engulfing pattern(long red candle) in bearish trend STOP LOSS : should be above the candle
- : after significant fall,when the current day starts below previous day’s lowest point and cover up more than 50% of previous day’s body with green colour and significant volume indicates the Piercing Pattern(Bullish in this case). Condition to qualify bearish piercing: Increase in price trend observed for past few days. Latest Red body starts above the highest of previous day and covers more than 50% of previous day’s body with significant volume. The lower tail is small in size. When to Sell: When the price goes below previous day’s lowest Point(A). Stop Loss: Latest Red Body’s highest Price(B). Risk = A~B and Target = A+ Risk. Buying should happen at target or at stoploss(Price goes above B). Condition to quality bullish piercing: Recent price fall trend observed & Latest Green body starts below the lowest of previous day and covers more than 50% of the previous day’s body with significant volume. The upper tail should be small.. When to Buy: When the price goes above previous day’s highest point(A). Stop Loss: Latest Green body’s lowest price(B). Risk = A~B and Target = A+Risk. Selling should happen at the target or at stop loss(Price goes below B)
- : A Doji is a unique pattern in a candlestick chart. It is characterized by having a small length, which indicates a small trading range. appearance of doji after a significant rally or fall indicate that traders are neutral, The doji with high volume indicate the trend reversal, we can ignore the dogi followed by the sideways movement
- : An EVENING STAR is a bearish candlestick pattern consisting of three candles: a large white candlestick, a small-bodied candle, and a red candle. This pattern is used by traders as an early indication that an uptrend may be about to reverse. A MORNING STAR is a visual pattern consisting of three candlesticks, and forms after a downtrend.a large red candle ,a small-bodied candle, and a white candle It could indicate the start of an upward climb.
- : the hammer candle stick pattern will farm after recent fall , with two times bigger tail then its body,the upper tail should invisible or very small size, volume should be high in the hammer day, hammer should be green in colour because make sure that sellers tried to bring the price down but the end of the day buyers have an upper hand and they managed to bring the price to positive direction, when a hanging man forms in an uptrend, it indicates that buyers have lost their strength. While demand has been pushing the stock price higher, on this day, there was significant selling. While buyers managed to bring the price back to near the open, the initial sell-off is an indication that a growing number of investors think the price has peaked.