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CANDLESTICK

Japanese candlesticks offer a better visual perspective to predict future market action than bars. Intraday charts with clear japanese candlestick pattern are invaluable for entry and exit strategies


In order to create a candlestick chart, you must have a data set that contains open, high, low and close values for each time period you want to display. The hollow or filled portion of the candlestick is called "body" .


The long thin lines above and below the body represent the high/low range and are called "shadows" (also referred to as "wicks" and "tails"). The high is marked by the top of the upper shadow and the low by the bottom of the lower shadow.


If the stock closes higher than its opening price, a hollow candlestick is drawn with the bottom of the body representing the opening price and the top of the body representing the closing price. If the stock closes lower than its opening price.




A filled candlestick is drawn with the top of the body representing the opening price and the bottom of the body representing the closing price.

CANDLESTICK FORMATION

Pattern : A long black body followed by several small bodys and ending in another long black body. The small bodys are usually contained within the first black body's range.
Interpretation : A bearish continuation pattern




Pattern : A Doji contained within a large white body.
Interpretation : A top reversal signal




Pattern : A very large white body followed by a small black body that is contained within the previous bar.
Interpretation : A bearish pattern when preceded by an uptrend.




Pattern : A long white body followed by three small bodies, ending in another long white body. The three small bodies are contained within the first white body.
Interpretation : A bullish continuation pattern




Pattern : A Doji contained within a large black body.
Interpretation : A bottom reversal patter




Pattern : A very large black body is followed by a small white body and is contained within the black body.
Interpretation : A bullish pattern when preceded by a downtrend.




Pattern : The open and close are the same.
Interpretation: Dojis are usually components of many candlestick patterns. This candlestick assumes more importance the longer the verticle line.



Pattern : A Doji which gaps above or below a white or black candlestick.
Interpretation : A reversal signal confirmed by the next candlestick (eg. a long white candlestick would confirm a reversal up).




Pattern : A small white body followed by and contained within a large black body.
Interpretation : A top reversal signal.




Pattern : A large white body followed by a Doji that gaps above the white body. The third candlestick is a black body that closes 50% or more into the white body.
Interpretation : A top reversal signal, more bearish than the regular evening star pattern.



Pattern : A large white body followed by a small body that gaps above the white body. The third candlestick is a black body that closes 50% or more into the white body.
Interpretation : A top reversal signal.



Pattern : A long white body followed by a black body. The following black candlestick opens higher than the white candlestick's high and closes at least 50% into the white candlestick's body.
Interpretation : A bearish reversal signal during an uptrend.



Pattern : A gap or "window" between the low of the first candlestick and the high of the second candlestick.
Interpretation : A rally to the gap is highly probable. The gap should provide resistance.



Pattern : The open and close are at the low of the bar.
Interpretation : A top reversal signal. The longer the upper wick, the more bearish the signal.




Pattern : A small body near the high with a long lower wick with little or no upper wick.
Interpretation : A bullish pattern during a downtrend.




Pattern : An upside-down hammer with a black body.
Interpretation: A bottom reversal signal with confirmation the next trading bar.




Pattern : A candlestick with an upper wick that has a length equal to or greater than the range of the candlestick.
Interpretation : A bearish signal.




Pattern : A large black body followed by a Doji that gaps below the black body. The next candlestick is a white body that closes 50% or more into the black body.
Interpretation : A bottom reversal signal