Candlestick patterns and what to expect

 The candlesticks are used to identify trading patterns. Patterns in turn help the technical analyst to set up a trade. The patterns are formed by grouping two or more candles in a certain sequence. However, sometimes powerful trading signals can be identified by just a single candlestick pattern.

Hence, candlesticks can be broken down into a single candlestick pattern and multiple candlestick patterns. 

Under the single candlestick pattern, we will be learning the following...

1. Marubozu 
i. Bullish Marubozu
ii. Bearish Marubozu
2. Doji
3. Spinning Tops 
4. Paper umbrella 
i. Hammer 
ii. Hanging man 
5. Shooting star




Multiple candlestick patterns are a combination of multiple candles. Under the multiple candlestick patterns we will learn the following:

1. Engulfing pattern 
i. Bullish Engulfing 
ii. Bearish Engulfing 
2. Harami 
i. Bullish Harami 
ii. Bearish Harami 
3. Piercing Pattern 
4. Dark cloud cover
5. Morning Star 
6. Evening Star

Of course you must be wondering what these names mean. As I had mentioned in the previous chapter, some of the patterns retain the original Japanese name.

Candlestick patterns help the trader develop a complete point of view. Each pattern comes with an in-built risk mechanism. Candlesticks give an insight into both entries and stop-loss price. 


Location: India

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