Notes about candlestick patterns

 More buyers(high demand) and less seller(low supply) increase in price and volume – buy
assets
 Less buyers(low demand) and more seller( high supply) decrease in price and volume – sell
the asset
 Bulls- people when the price of asset goes up(buyers)
 Bears- people when the price of asset goes down(sellers)

CANDLESTICK CHART

o Representaton of stock price movement chart that comprises of small units called candles.
o It gives more detailed inf. On price movement-OHLC(open price,high,low,close price)
o HELPS TO PREDICT THE DIRECTION OF PRICE MOVEMENT

CANDLE

o Represents priceactivity in stock in a particular frame.

 Real body-connects the opening and closing price.
 Upper shadow-connects high points to close/open
 Lower shadow- connects low points to open/close
 Bullish- green,bearish-red.
Bullish candle-
 buying activity in a stock in a particular time frame.
 Close higher than open
 Shows more activity from buyers.
Bearish candle-
 selling activity in a stock in a particular time frame.
 Close lower than open
 Shows more activity from sellers.

TYPES OF CANDLES-SINGLE CANDLESTICK PATTERN




SINGLE CANDLESTICK PATTERNS

Marubozu

-candlestick with no upper and lower shadow.

-real body and appear anywhere in the chart irrespective of the prior trend.

 Bullish marubozu - open= low and high =close
 Indicate stock is now is bullish

,  Buy at close,SL at low

 Bearish marubozu - open= high and low =close
 Indicate stock is now bearish
 sell at close,SL at high

SPINING TOP

 indicates indecision and consolidation.indicator for trend
reversal
 candles have small body
 upper and lower shadow are almost equal.
 Body colour does not matter as it is small

 Downtrend
 uptrend

DOJI

o no having real body at all ,onlu miniscule body
o it means open and close price are equal.
o Bulls and bears hav similar strength at the moment.
o Indicates indecision in the market.indicate trend reversal as well
o various doji:




Don’t take new trade.

PAPER UMBRELLA

o single candlestick pattern which helps traders in setting up directional
trades.
o It changes based on where it appears on the chart. It has:
 Small upper body
 Long lower shadow.
 Lower shadow should at least twice the length
 bodyColour does not matter
Hammer - it appers at the bottom end of a downwaed rally.
Indicates trend reversal to bullish.Buy at close ,SL at low
Hanging man - appears at the top end of a downard rally.Indicates
trend reversal to bearish. Sell at close ,SL at high.

SHOOTING STAR

o helps traders in setting up directional trades.
o Bearish pattern
o Sell at close.SL at high