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
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