Trading Part 02- Candlesticks

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Trading

Part 02- Candlesticks

Pin Bar

Pin bars are the bearish trading pattern. That is a price action reversal pattern that indicates that a specific market level or price point was rejected. The actual pin bar is a long upper "wick" or "shadow" and a much smaller "body".

These pin bars found in an bullish trend indicate that the market is moving towards a downtrend. Here, the market may be paused or move sideways.

Hammers

The hammer candlestick is a bullish trading pattern that may suggest that a stock has achieved its bottom and is going to reverse trend. It clearly illustrates that sellers entered into the market, bringing down the price, but were exceeded by purchasers, pushing the stock price up.

If these hammers are found in a bearish trend, the market may become Pause or goes into an uptrend.

Inverted Hammers

The inverted hammer pattern is characterized by its shape, that looks an upside-down hammer. Look for with an inverted hammer candle with a tall upper wick, a short lower wick, and a small body.

The inverted hammer candlestick pattern (or inverse hammer) shows on a chart when buyers are putting pressure on an asset's price to rise. It frequently appears near the bottom of a downtrend, indicating a possible bullish reversal.

Spinning Tops

Spinning top candlesticks have a short body between an upper and lower long wick. The spinning top represents a situation in which neither the seller nor the buyer has benefited. As a result, the starting and closing price units are the same.

The creation of a top-spinning candlestick might assist predict the likelihood of a price turnaround, primarily if it occurs after a price decrease. The candlestick is regarded as a continuation pattern because of the minor deviation in the market trend.

The candlestick shape implies a level of uncertainty among buyers and sellers, which represents price reversals, resulting in a neutral pattern. The spinning top at the candle close can be negative or positive. The candlestick pattern, on the other hand, is most frequently identified inside an uptrend, a downtrend, and a sideways movement, signaling a probable reversal. The bullish trend drives the price upward, while the negative trend drives the price lower until the whole price closes where it began.

Hanging Man

A hanging man candlestick appears during an uptrend and shows that prices may begin to drop. The candle has a small body, a lengthy lower wick, and no or little upper wick. The hanging man shows that selling demand is beginning to rise.

Dragon Fly Doji

Dragonfly Doji had no upper wicks and a lengthy lower wicks, indicating that bulls regained price control after strong selling pressure. These candlestick patterns can indicate a bullish reversal after a downtrend, particularly if patterns occur on greater volume.

If the dragonfly Doji appears to follow an uptrend, this may be interpreted as a neutral to bearish indicator. Traders may understand it in the same ways they would an overturned hammer, but the signal would be weaker. The amount of volume would also play a part in the interpretation.

Gravestone Doji

Gravestone Doji had no bottom wicks and large upper wicks, showing that bears regained price control after strong buying pressure. These candlestick patterns can indicate a bearish reversal after an uptrend, particularly if they happen in a higher quantity.

Marubozu

Marubozu is a Japanese term for a bald or shaved head. This candlestick pattern is well-known for the absence of upper and lower wicks. This indicates that the price of an asset began high and ended low, and vice versa.

Marubozu candles are not widely available. When they do occur, it is generally as a display of strength. In this scenario, a bullish Marubozu indicates that bulls remain strong and are rejecting any pressure from sellers.

As a result, the bullish Marubozu tends to lead to a continuation of the upward trend in the majority of situations.

A bearish Marubozu candle, on the other hand, is typically an indicator of bears' strength. When this occurs, it is typically an indication that the negative trend will continue.