IMPORTANT CANDLESTICK PATTERNS TO FOLLOW IN TECHNICAL ANALYSIS

 

BULLISH CANDLESTICK PATTERNS:

1.     BULLISH ENGULFING:

·       Bullish engulfing candlesticks formed in the bottom of a bear to take a consideration.

·       It is end of an downtrend.

·       Confirmation of bullish engulfing with volume.

 

2.     MORNING STAR:

·       A morning star is a bullish three candles pattern which is formed at the bottom of a down move or down trend.

·       It is end of an downtrend.

·       First candle is bearish, second candle is doji, third candle is bullish.

·       Confirmation of morning star with volume.

 

 

 

3.     HAMMER:

·       Hammer is formed when open, high, and close are roughly the same price.

·       Hammer is most effective if it occurs at bottom of the downtrend.

·       It is considered as a bullish reversal pattern and colour of the hammer is not important.

·       Confirmation of the reversal is to be taken before taking any position. (Big bullish candle immediate in next candle)

 

 

BEARISH CANDLESTICK PATTERN:

4.     INVERTED HAMMER:

·       The shadow two or three times of the real body little or no lower shadow.

·       The colour of the real body is not important.

·       The hammer or inverted hammer formed end of the trend with bullish and bearish candle or bit powerful as compared to bullish or bearish candles.

 

5.     BEARISH ENGULFING:

·       It is a type of patten which is formed when bullish candle completely engulfs by following bearish candle.

·       It is most powerful when it is formed at the end of an uptrend.

 

6.     EVENING STAR:

·       It is formed when green candle is followed by doji candle which then followed by big bearish candle.

·       it is most powerful when it is formed end of the uptrend.

 

 

7.     HANGING MAN:

·       It is formed at end of an uptrend.

 

 

8.     SHOOTING STAR:

·       It is formed at the end of an uptrend.