You can become more familiar with some common and dependable candlestick patterns by checking out the following figures. (Remember, they don’t represent every possible candlestick pattern.)
Bullish two-day trend reversal patterns
These charts are a few of the most common and reliable bullish two-day trend reversal patterns in an uptrend.
Bullish two-day trend continuation patterns
These patterns are common and reliable examples of bullish two-day trend continuation patterns in an uptrend.
Bearish two-day trend reversal patterns
These figures shows some of the most common and reliable types of bearish two-day trend reversal patterns in an uptrend.
Bearish two-day trend continuation patterns
These reliable two-day trend continuation patterns may show up frequently as you look through your candlestick charts.
Bullish three-day trend reversal patterns
Here are a couple common bullish three-day trend reversal patterns.
Bullish three-day trend continuation patterns
These two patterns are common examples of bullish three-day trend continuation patterns.
Bearish three-day trend reversal patterns
These are a couple of the most common bearish three-day trend reversal patterns.
Bearish three-day trend continuation patterns
Here are two common examples of bearish three-day trend reversal patterns.
FAQs
The candle in a chart is white when the close for a day is higher than the open, and black when the close is lower than the open. The wicks, lines sticking out of either end of the candlestick, represent the range between the day's high and low prices.
How do you memorize candlestick patterns? ›
Candle formation and sequence:
- During an uptrend: Long green candle – a very small candle with a gap up – a large red candle with a gap lower.
- During a downtrend: Long red candle – a very small candle with a gap down – a large green candle with a gap up.
The pattern consists of three consecutive long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high. These candlesticks should not have very long shadows and ideally open within the real body of the preceding candle in the pattern.
How to practice reading candlestick chart? ›
A short upper wick on a red candle suggests the stock opened near its daily high. Conversely, a short upper wick on a green candle suggests the stock closed near its daily high. In summary, a candlestick graph presents the relationship between a stock's high, low, opening, and closing prices.
What is a simple explanation of a candlestick chart? ›
A candlestick chart is a graphical representation used in financial analysis to display the price movement of an asset. This may include a stock, currency, or commodity, over a specified period of time. It consists of individual "candlesticks," each representing a specific time frame (e.g., a day, hour, or minute).
How to read candlesticks like a pro? ›
The Candlestick Body
These candlesticks will usually have one of two colors. If they're green candles, then the bottom part of the candlestick represents the opening price whereas the topmost part of the body represents the closing price. On the other hand, if what you have is a red candle, then the opposite is true.
What is the most successful candlestick pattern? ›
Top 5 Most Powerful Candlestick Patterns for Intraday Trading
- Three Line Strike: The bullish three-line strike reversal pattern carves out three black candles within a downtrend. ...
- Two Black Gapping: ...
- Three Black Crows: ...
- Evening Star: ...
- Abandoned Baby:
The body of a candlestick represents the opening and closing prices of the stocks during the trading period, the wicks represent the highest and the lowest price points, and the colour represents the direction of price movements.
How do you predict every candlestick? ›
How to Analyse Candlestick Chart
- If the upper wick on a red candle is short, then it indicates that the stock opened near the high of the day.
- On the other hand, if the upper wick on a green candle is short, then it indicates that the stock closed near the high of the day.
Learn to trade Candlestick Patterns | Udemy.
INTERPRETING A CANDLE ON A CANDLESTICK CHART
the price declines the candle will turn red. upper wick/shadow it means that the open price or the close price was the highest price traded. bullish candle. price is above the open price the candle will be green/blue (also depends on the chart settings).
How to day trade using candlesticks? ›
The low of the candle is the lower shadow or tail, represented by a vertical line extending down from the body. If the close is higher than the open, then the body is colored green representing a net price gain. If the open is higher than the close, then the body is colored red as it represents a net price decline.
What is the 8 10 rule for candles? ›
The 8-10 Rule: Place one 8 ounce candle for every 10 feet radius of room. It's a good rule of thumb to follow the 8-10 rule to ensure your candle scent permeates the entire room equally.
How do you interpret a candlestick chart? ›
So, if a candlestick chart for one month with each candle representing a day has more consecutive reds, then traders know that the price is falling. Above and below the body are vertical lines called wicks or shadows that show the lows and highs of the traded price of the stock.
How to read stock charts for beginners? ›
Each trading day is represented as a bar on the chart with the open, high, low and closing prices. The length of the bar shows the stock's price range for that day, with the top of the bar representing the highest price and the bottom the lowest price for the trading day.
What should I look for in a candlestick chart? ›
Each candlestick represents one day's worth of price data about a stock through four pieces of information: the opening price, the closing price, the high price, and the low price. The color of the central rectangle (called the real body) tells investors whether the opening price or the closing price was higher.
