Candlestick Patterns

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Candlestick Patterns

  1. 1. Candlestick Patterns Candlestick Chart Profits Training Series stephenbigalow.com Candlestick Patterns Candlestick patterns are clear and easy to identify demonstrating highly accurate turns in investor sentiment. Japanese candlestick patterns consist of approximately 40 reversal and continuation patterns which all have credible probabilities of indicating correct future direction of a price move. However the twelve major candlestick patterns provide more than enough trade situations to most investors. There are only twelve major patterns that should be committed to memory but this does not mean that the remaining secondary patterns should not be considered. In fact those signals are extremely effective for producing profits. Reality however demonstrates that some of them occur very rarely. Candlestick trading analysis does not require knowing intricate formulas or ratios and it does not require massive amounts of education to effectively utilize the signals. The signals and patterns are easy to see as illustrated below. As you can see a stock price closing higher than where it opened will produce a white or green candle. A stock price closing lower than where it opened creates a black or red candle. The boxes that form are called “the body” and extremes of the daily price movement are represented by the lines extending from the body. These lines are called shadows or tails. When a stock price closes where it opened or very close to where it opened, it is called a “doji.” A hollow candle forms when the stock closes higher than its … Tags: Candlestick, Candlestick Charts, Patterns Read More: 1/1Powered by TCPDF (www.tcpdf.org)

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