Candlestick Patterns with examples

Candlesticks:

  • Candlesticks are the oldest form of analysis in the world. Japanese Candlesticks were invented by a Japanese rice trader, Munehisa Homma, in 17th century. Candlestick trading and the related technical analysis were introduced to the western countries in 1985 and became so popular. Candlesticks are a visual form of charting prices. Candlestick trading means knowing the psychology of the markets through the candlesticks shapes and colors.
  • Candlestick represents the price action. There are four parts opening price, close, high and low. Candlesticks are the indicators that reflect the emotions (fear and greed) of buyer’s sellers.

 

How to detect a bullish or a bearish candle?  Bullish candles open at low and closes at high. Bearish candles open at high and closes at low.

In the sample above, the white candle in the upper left corner shows a bullish candle. Typically bullish candles are green.  In the lower right corner there is a black candle, which indicates a bearish sentiment. Bearish candles colors are often red. In the sample above, the white candle in the upper left corner shows a bullish candle. In the lower right corner there is a black candle, which indicates a bearish sentiment.

Here are the lists of candlesticks patterns:

  • Bullish candles: Bullish Engulfing, Piercing candles, 3 white soldiers, Inside bar,  Outside bar ,Morning star, Hammer, bullish White candles, Marubozu candle, Bullish harami,  Abandoned baby, Bullish tweezers, hanging man (at bottom)
  • Bearish candles: Bearish engulfing , Dark cloud, Bearish harami, Evening star, Shooting star,Hanging man (on top), Black Marubozu,Bearish Tweezers
  • Indecision candles: Doji ,Gravestone doji ,Dragonfly doji, Spining top

 

                                                                                                                              Image by Tradermentality

(courtesy fxfactory)

 

 

$EURUSD 60 MIN/HOURLY CHART ANALYSIS(May 2019)

 

 

 

 

Example:  $FB  candlesticks pattern analysis on daily chart