Candlestick pattern

A candlestick pattern is a type of technical analysis tool used by traders to analyze market trends and predict future price movements. It is based on the use of candlestick charts, which display price movements over a certain period of time.

Candlestick patterns are formed by the arrangement of individual candles on the chart. Each candle represents a specific time period, such as a day, a week, or an hour, and contains information about the opening, closing, high, and low prices during that period.

Some of the most common candlestick patterns include the doji, hammer, shooting star, and engulfing pattern. Each pattern has its own unique characteristics and can signal different things about the market, such as a potential reversal in trend or a continuation of an existing trend.

Traders use candlestick patterns in combination with other technical analysis tools, such as trend lines and indicators, to make trading decisions. By understanding the patterns and their meanings, traders can better identify potential trading opportunities and manage their risk.

Type of candlestick

There are many different types of candlestick patterns, each with its own unique shape and interpretation. Here are some of the most commonly recognized Types of candlesticks

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3. Marubozu:

   

   
   

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   A candlestick with no upper or lower shadow, indicating strong buying or selling pressure throughout the session.

Doji

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A candlestick with a very small body and upper and lower shadows of equal length, indicating indecision or a potential reversal in the market.









1. Hammer:

   

   
   

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3. A candlestick with a small body and a long lower shadow, indicating that buyers have stepped in and pushed prices higher.

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8. Shooting Star:

   

   
   

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10. A candlestick with a small body and a long upper shadow, indicating that sellers have taken control and pushed prices lower.

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14. Engulfing pattern:

    

    
    

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16. A candlestick pattern where one candle "engulfs" the previous candle, indicating a potential reversal in the market.

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20. Morning star:

    

    
    

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22. A three-candle pattern where the first candle is a long bearish candle, the second is a small candle with a short body, and the third is a long bullish candle, indicating a potential reversal from a downtrend.

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28. Evening star:

    

    
    

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30. A three-candle pattern where the first candle is a long bullish candle, the second is a small candle with a short body, and the third is a long bearish candle, indicating a potential reversal from an uptrend.

There are many other candlestick patterns, and traders often use multiple patterns in combination with other technical indicators to make trading decisions