Japanese way of analyzing the supply and demand. It is done using a daily charts. It is good for short term price movement analysis and weekly trading. It consists of Engulfing, DOJI (Morning star/Evening star), Piercing, Hammer and Hanging man patterns.
- : Candle stick analysis is a Japanese way of analyzing the supply and demand. It is done using a daily charts. It is good for short term price movement and weekly trading.
- : It is used for weekly forecasting.
- : Weekly trader can use the candle stick analysis. Significant volume change confirms the price reversal.
- : For a bullish engulfing pattern, the previous day's RED body should be completely covered by the today's GREEN body. For long position, the entry is above the Green body's high. The reversal of this is for selling when the bearing engulfing is formed.
- : For bullish pattern, The latest GREEN body should cover the previous day's LOW. The bull body should cover at least 50% of previous day body. The upper tail should be small. Entry for Long position is above the previous day's high. The reverse of this is for selling (bearish piercing pattern)
- : DOJI means neutral. A star shaped thin candle which appears after a significant fall or surge in price (with a high volume) is called a DOJI. When a DOJI appears after a significant fall, one can create a long position. The reverse of this is for short position.
- : After a significant price fall, if DOJI appears, it is called morning star (After Dark). After a significant price rise, If DOJI appears, it is called evening star (After Day). BUY can be initiated for Long position above the high of the DOJI. The reverse of this is for selling.
- : 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. Hanging man is reverse of the Hammer. Long position can be created when the price increases above the upper tail (high). The reverse is for selling.