Candlestick analysis is the Japanese way of understanding demand and supply.
Candlestick analysis provides short term trend analysis and studies in detail based on the daily candlesticks patterns.
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).

  • : Candlestick analysis is the Japanese way of understanding demand and supply. Candlestick analysis provides short term trend analysis and studies in detail based on the daily candlesticks patterns.
  • : Candlestick analysis is very effective for a weekly forecasting.
  • : Volume is important in candle stick analysis, as it indicates the traders interest in the stock. Time period – normally 8 days to 2 Months depending on the candle stick pattern using. With a single look of the candle chart, we can understand the market movement and quickly do our analysis.
  • : The engulfing pattern is reliable and appears frequently. after gradual fall of price the latest green body covers the previous red body fully the trading volume might increase during engulfing day only appears after the price falll.is called engulfing pattern.
  • : 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).
  • : The DOJI is derive from the Japanese it means neutral. DOJI appears after significant rise or fall in price with high volume. This candlestick pattern will be in the form of star, where the starting and ending price of the day is almost the same. DOJI is the indication of reversal trend and can be used for creating long/short position based on whether it is bullish or bearish.
  • : 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).
1 Comment
  1. Naresh 8 months ago

    Hi,
    Nice work!

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