know all candlestick patterns and the market psychology of the main candlestick patterns used in share trading. Understand the price that why the top candlestick patterns like a hammer, and bullish engulfing pattern are made in the market. Also, check the forecasting of the nifty 50 and dow jones with the candlestick pattern analysis. https://www.tradersmantra.in/candlestick-patterns/

1. Candlestick
patterns in Share
Market Trading
Traders Mantra
Traders Mantra | Stock Market Institute In Chandigarh

2. Candlestick patterns in
Share market trading
know all candlestick patterns and the market
psychology of the main candlestick patterns
used in share trading. Understand the price that
why the top candlestick patterns like a hammer,
and bullish engulfing pattern are made in the
market. Also, check the forecasting of the nifty
50 and dow jones with the candlestick pattern
analysis.

3. Candlestick patterns in Share
Market Trading
Candlestick patterns in the share market are the
same as the road signs on streets while driving a
vehicle. Patterns can give you a sense that when
the price is about to increase momentum or when
to make a U-turn.
To understand the Candlestick pattern in depth,
we should go a little into the discovery of those
patterns. Let’s start with the legend who
introduced these candlesticks patterns in the
price action chart.

4. Types of candlesticks
from which the patterns
are formed Green candle with a single wick
Green candle with both sides wicks
Green candle without a wick
Red candle with a single wick
Red candle with both sides wicks
Red candle without a wick
Without body, a single wick
Without body, both sides wick

5. What are the
candlestick
patterns?
Candlestick patterns are basically based on
the movement of price on graphical charts.
Candlesticks together make different types of
patterns which help to predict the movement
of price in a direction.
After completing a particular pattern, the
price mostly behaves the same as its
historical data. These patterns are the
footprints of price movements which helps
us to forecast the action of the price at a
certain level. Although Candlestick patterns
show the Greed and Fear of the market
participants.

6. 13 best candlestick
patterns used in the
share market
There are more than 45 candlestick patterns
found in the Stock market, which I have listed
below in the article. The main candlestick
patterns which are more reliable in share
market trading are written below.

7. The morning star consists of three candles. It can be
found in a downtrend. The first candle is bearish as it
represents the ongoing bear trend. The second candle
is a small candle which stays near the bottom of the
first candle.
Morning star
The evening star also consists of three candles. It is
usually found in an uptrend. The first candle which is in
the direction of the trend i.e. bullish closes with a green
candle.
Evening Star

8. Bullish engulfing candlestick made with two candles. The first
candle is in the direction of the trend i.e. bearish. The turning
table is the second which opens below the close of the first
candle but engulfs the entire previous one.
Bullish Engulfing
Candlestick Pattern
A bearish engulfing candlestick is also made with two candles.
Alternate to the bullish engulfing, the first candle is in the
direction of the trend i.e. bullish. The turning point is shown by
the second candle which opens above the close of the first
candle but closes down to the previous candle.
Bearish Engulfing
Candlestick Pattern

9. Doji candlestick pattern is the formation of a small body or no
body in between and long wicks on the upside and downside
of the candlestick. It closes exact or near where the open is
formed.
Doji candlestick
In a downtrend, when the price after opening without
moving a tick upward, goes down but covers all the down
move within the same candle, it is known as Dragonfly
Doji.
Dragonfly Doji
pattern

10. Gravestone Doji pattern
In an Uptrend, when the price after opening without moving a tick downward, goes up but coves all the up move within the same
candle, it is known as Gravestone Doji. It has a long wick to the upside with a tiny body without a body at the bottom of the candle.

11. Hammer appears green or red small body in
colour has a long wick on the downside
showing the opening and closing of the
candlestick. It forms in the downtrend and
represents the temporary bottom of that
downtrend.
Hammer candlestick
pattern
The inverted hammer appears in green or red colour
small body having a long wick to the upside showing
the opening and closing of the candlestick. It also
forms in the downtrend and represents the
temporary bottom of the prior downtrend.
Inverted hammer
candlestick

12. A candlestick with a long wick to the downside having a
small body at the top appears in an uptrend is Hanging man.
It gives a good look of a hanging man in the chart.
Hanging Man
This candlestick is of a long wick to the up but has a
small body of green or red colour. Specification: The
wick to the upside should be long and the colour of the
body doesn’t matter.
Shooting Star

13. In a downtrend, the pattern combines two
candlesticks in which green (bullish) appears after a
red (bearish) one with a gap-down opening and
retracement closing of more than 50%.
Piercing bullish
pattern
In an uptrend, the pattern is a combination of two
candlesticks in which a red (bearish) candlestick appears
after a green (bullish) one and opens a gap up but closes
retracing the first one by more than 50% mostly near the
top which shows the momentum is shifting towards the
downside and it can be a trend reversal.
Dark cloud cover

14. List of all
candlestick
patterns
There are a total of 49
candlestick patterns.
Here is the list of all
candlestick patterns
in the Stock market.

15. The question usually arises in the mind of a trader or an investor is why
candlestick patterns show a great level of accuracy. It is because of the
psychology of the price hidden behind the price action.
Candles give the open, close, high and low data of a particular timeframe.
At a very particular timeframe, if the price is planning to reverse, it shows
some signal which is most of the time a true signal.
Psychology of
candlestick patterns
Candlesticks are available on technical charts in almost every timeframe including second, minute, day, week and month.
You can use any one of them for trading but when it comes to the reliability of the patterns; the higher the timeframe, the more the reliability.
As the price fluctuates up and down every single second during live market hours, it is quite difficult to handle the noise of small timeframes
which somehow can affect your trading psychology.
Candlestick patterns are highly reliable in which timeframe?

16. Candlestick patterns with other indicators
Candlestick patterns with the support
and resistance
No doubt candlestick patterns have in itself high reliability.
Check if the candlestick
pattern is formed at the
previous support or the
resistance of the price.
This can give us a
confirmation as the price
shows much accuracy to
take a turn with the
double confirmation.

17. When the price touches the moving average and
forms a reliable candlestick pattern, it is also the
best time to make a trade as the price is confirmed
in a double way.
Candlestick patterns
with the moving
average
If you are familiar with the Elliott wave theory, wave
2 and wave 4 are good dips which give a trader a
very good opportunity to buy.
Candlestick patterns
with Elliott wave
theory

18. In the positive divergence of the RSI, the
price most of the time forms a hammer,
bullish engulfing or the morning star.
Candlestick
patterns with RSI
divergence
With any bullish signal of the candlestick pattern, if
the volume is high as compared to previous
candles, it is a good sign to buy.
Candlestick
patterns with
volume confirmation

19. Chart Analysis with
candlestick patterns
Here we analyse two charts which can help you
understand how to analyze the price with candlestick
patterns.
Nifty Daily Chart Dark cloud
Candlestick Pattern Analysis
As we can see in the chart below, the last candle of the daily
timeframe in Nifty 50 engulfs 50 % of the previous bullish
candle.

20. Dow Jones Industrial Average
Index chart Evening Star
Candlestick Pattern
In the chart of the Dow Jones
Industrial Average below, the
latest three candles are forming
an Evening Star candlestick
pattern. In an uptrend, the bullish
candle is paused by the second
last candle, which is also a
shooting star in itself.

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22. Thank You
BY Traders Mantra Team
Traders Mantra | Stock Market
Institute In Chandigarh