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Candle Patterns Week1 Guide

The document outlines the top 5 candlestick patterns used in trading: Hammer, Shooting Star, Engulfing, Doji, and Marubozu, each indicating different market sentiments. It emphasizes the importance of these patterns in reflecting trader psychology and making informed trading decisions. Additionally, it advises confirming patterns with volume and trend direction, particularly near support and resistance zones.

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25 views1 page

Candle Patterns Week1 Guide

The document outlines the top 5 candlestick patterns used in trading: Hammer, Shooting Star, Engulfing, Doji, and Marubozu, each indicating different market sentiments. It emphasizes the importance of these patterns in reflecting trader psychology and making informed trading decisions. Additionally, it advises confirming patterns with volume and trend direction, particularly near support and resistance zones.

Uploaded by

rajat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Week 1 Learning Guide: Top 5 Candle Patterns

Candlestick patterns are visual price signals that help traders make better entry and exit decisions. They

reflect trader psychology - whether buyers or sellers are in control.

Top 5 Patterns:

Hammer:

Bullish reversal at the bottom of a downtrend. Small body, long lower wick. Signals buyer strength.

Shooting Star:

Bearish reversal at the top of an uptrend. Small body, long upper wick. Signals potential sell-off.

Engulfing:

Strong reversal pattern. Bullish if green candle completely covers red (and vice versa). Volume adds

confidence.

Doji:

Indecision candle. Open and close prices are nearly the same. Often leads to reversal when near

resistance/support.

Marubozu:

Full-body candle with no wicks. Indicates strong conviction. Green = bullish; Red = bearish.

Quick Tip:

Use these patterns near support/resistance zones. Always confirm with volume and trend. They are most

powerful when aligned with overall trend direction.

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