Candlestick
Patterns
Section - 4
Why we need Candle Stick Pattern?
• We Predict Extreme Greed & Fear Phase
in Charts
• Candlesticks Pattern is First & Foremost
Signal of Reversal Price Movement.
• It Shows & Consider Mass Pschychology
Candle Stick Pattern
• Invented by the Japanese. Used first in the
1870s with the opening of the Japanese stock
market.
• Can be used with the weekly, daily and 5
minute charts.
• Candlesticks do not give price targets and
need a close to confirm candle signal
Candle Stick Pattern
• Before placing a trade based on a candle
signal:-
- Other technical signals should be
considered-
- Consider the risk / reward of the trade.
- Candle charts are best used as a tool not a
system.
Candle Stick Pattern Formation
Candle Stick Pattern Formation
High – 15$ High – 15$
Close – 13 $ Open – 13 $
Open – 9 $ Close – 9 $
Low – 7$ Low – 7 $
Types Candle Stick Pattern
• Single Candle Stick Pattern
- Reversal Pattern
- Continuation Pattern
• Two Candle Stick Pattern
- Reversal Pattern
- Continuation Pattern
• Three Candle Stick Pattern
- Reversal Pattern
- Continuation Pattern
Single Candle Stick
Pattern
Lecture - 14
Golden Rules While Apply Single Candle
Stick Pattern
• No Color Matter in Case of single
Candlestick Pattern
• Consider Volume Behavior along with
candlestick pattern
• Shape is matter in all Candlestick
patterns
Golden Rules While Apply Single Candle
Stick Pattern
• Position Matter & It Should be Time
Frame Absolute Top & Bottom.
• Confirmation of trade from next candle
• Keep Patience for next 3-5 Candle to
Perform after taking position
Single Candle Stick
Pattern
Reversal Pattern
Lecture - 14
Lecture 14
Hammer – Bullish
Pattern
Hammer
Key Factor:
Prior Trend Absolute
Downtrend Bottom
Final Sell Off in Profit Booking in
Morning Evening
Shadow is More
Colour Not than 2 Times of
Matter Real Body
Lecture 14
Shooting Star – Bearish
Pattern
Shooting Star
Key Factor:
Prior Trend
Absolute Top
Uptrend
Final Buy in Profit Booking in
Morning Evening
Shadow is More
Colour Not than 2 Times of
Matter Real Body
Single Candle Stick
Pattern
Continuation Pattern
Lecture - 14
Lecture 14
Doji – Continuation
Pattern
Doji
Key Factor:
Side Ways /
Any Trend
Range Bound
No Buyer / Continue the
Seller Control prior Trend
No Position Is
No Real Body Required to
Take
