Pathshala: Candlestick Psychological Background

<div dir="ltr" style="text-align: left;" trbidi="on">
<h2>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Candlestick Basic</span></h2>
<h2 style="text-align: justify;">
<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Introduction</span></span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">In the 1700s, a legendary Japanese rice trader named Homma used trading techniques that eventually evolved into the candlestick techniques that technical analysts on the Japanese stock market used in the 1870s. Steve Nison introduced these techniques to the Western world in his first book, <i>Japanese Candlestick Charting Techniques. </i></span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The advantage of using candles on charts is that single or multiple candle patterns give earlier and more reliable reversal signals. Every candle shows the activity for the referenced period in hourly, daily, or weekly charts, for example.</span></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><span style="font-family: "arial" , "helvetica" , sans-serif;">Figure 6.1: Horizontal reference points of the candlestick. </span></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje8v16Um71rE78PDAIMnw8Gqk9fzGB45eStY9eEGl0V6kP36eg16tEYcYd1-XC6BmjYfpB4oq2QAQovWAJVYdnSNKFuVCvpiBVW_Cs0OgyO-g8NoMd1i_q346muyGc-pIXTgBZDKu7E28/s1600/candlesticks1_6_1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="142" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje8v16Um71rE78PDAIMnw8Gqk9fzGB45eStY9eEGl0V6kP36eg16tEYcYd1-XC6BmjYfpB4oq2QAQovWAJVYdnSNKFuVCvpiBVW_Cs0OgyO-g8NoMd1i_q346muyGc-pIXTgBZDKu7E28/s200/candlesticks1_6_1.jpg" width="200" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">In figure 6.1, the horizontal reference points of the candle represent the opening price, the highest price, the lowest price, and the closing price of the considered period. The rectangular portion of the candle, or the body, represents the range between the opening and the closing prices. If the closing price is higher than the opening price, the body is white (not filled). If the closing price is lower than the opening price, the body is black (filled).</span></div>
<div style="text-align: justify;">
<br />
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Figure 6.2: Candlestick naming.</span></div>
</div>
<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhf-r8K_nPc1aQz2vvNKD_Ijps_NRPtVxxl-maaXJoR0U12jvstywitnfNKdIHaza9BZAkhrdzHO62oVpcft8RR7vqGToeaIUCdwmN7hBD5XcHR12NRxICkDousTU3goB5E71MeDV1HOog/s1600/candlesticks1_6_2.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="193" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhf-r8K_nPc1aQz2vvNKD_Ijps_NRPtVxxl-maaXJoR0U12jvstywitnfNKdIHaza9BZAkhrdzHO62oVpcft8RR7vqGToeaIUCdwmN7hBD5XcHR12NRxICkDousTU3goB5E71MeDV1HOog/s200/candlesticks1_6_2.jpg" width="200" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">A candle consists of either just a body or a body with an upper and/or a lower shadow. A candle with an opening and closing price at almost the same price level is called a doji (figure 6.2). The candlewicks are called shadows, and they extend up to the highest price and down to the lowest price of the related period. Candlestick charts can be used in any time frame, including minutes, hours, days, weeks, or months. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Candlestick chart patterns are formed by one or more candles; they indicate a short-term trend reversal or a trend continuation. You must always take into account the previous trend when interpreting candlestick patterns. </span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><i>Candlestick patterns do NOT give price targets!</i></span></div>
<h3 style="text-align: left;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Format, Naming<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span>and Meaning - Candlesticks Format Overview </span></h3>
<div class="separator" style="clear: both; text-align: center;">
<img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCZDfT47NzL_QIIN3SXVOXxBzUWgikYlFuAGglCG8W7ZXpmSHyu8iPsel54qQXM1-OL6hVaxo2CRml_cq9UPZs0a00CnUWrpeIVL04q7aCp0I6L6bOIytPrdxwdFdHNKHzNcwrp7d-7Xw/s1600/candlesticks1_6_3.jpg" /></div>
<br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Format description:</b></span></span></div>
<div class="MsoNormal" style="line-height: normal;">
<br /></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="height: 377px; width: 595px;">
 <tbody>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span style="font-size: 12pt;">Sr.</span></b></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span style="font-size: 12pt;">Name </span></b></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span style="font-size: 12pt;">Interpretation</span></b></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 1;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">1</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Big white body (White Marubozu)</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Very positive</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 2;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">2</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Big black body (Black Marubozu)</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Very negative</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 3;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">3</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">White opening Marubozu</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Quite positive</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 4;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">4</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">White closing Marubozu</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Positive</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 5;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">5</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Black closing Marubozu</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Negative</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 6;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">6</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Black opening Marubozu</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Quite negative</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 7;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">7</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">White candle</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">No direction</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 8;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">8</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Black candle</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">No direction</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 9;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">9</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Dragonfly doji</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Reversal?</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 10;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">10</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Doji star</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Reversal?</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 11;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">11</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Gravestone doji</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Stable/Reversal</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 12;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">12</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Long-legged doji</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Reversal?</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 13;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">13</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Four price doji</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Reversal?</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 14;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">14</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Hammer (white)<br />Hanging man</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Bottom reversal <br />Top reversal</span></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 15; mso-yfti-lastrow: yes;">
  <td style="padding: 0in 0in 0in 0in; width: 30.75pt;" valign="top" width="41"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">15</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 194.25pt;" valign="top" width="259"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Hammer (black)<br />Hanging man</span></span></div>
</td>
  <td style="padding: 0in 0in 0in 0in; width: 122.25pt;" valign="top" width="163"><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: 12pt;">Bottom reversal <br />Top reversal</span></span></div>
</td>
 </tr>
</tbody></table>
<br />
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Psychological Background</span><span style="font-size: large;"><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></span></b><br />
<h2 class="clear">
<span style="font-size: small;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Candlesticks psychological background 1.</span></b></span></h2>
<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ-7ZGzcpsmHbQzjGW1aZugR8NtwtS_FxmJf5M-maKmzzfWQ28rDZqFd1k9z0acReuyWAJVyEUrV0e-FExehRJroP1-gEuGfZf8bC0Wg6TBQu_AYGltwHwdFzf_lbq-yWRssrZnj6TgtU/s1600/candlesticks1_6_4.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ-7ZGzcpsmHbQzjGW1aZugR8NtwtS_FxmJf5M-maKmzzfWQ28rDZqFd1k9z0acReuyWAJVyEUrV0e-FExehRJroP1-gEuGfZf8bC0Wg6TBQu_AYGltwHwdFzf_lbq-yWRssrZnj6TgtU/s1600/candlesticks1_6_4.jpg" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span>candlesticks demonstrate the psychological trading that takes place during the period represented by a single candle.</span></div>
<div style="text-align: justify;">
<br /></div>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Candlesticks psychological background 2.</span></b>
                      <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmcbnk7tpFYodeirGtyiF0sG68uzoDMU6IfVUWoP4xep1KiqXSgaejckhpkFnUphIgJvVhy9W63mLgXXK3D2ys5RcRKQ4qiJqmM-siXXpkQQQZB1onNndcE4oIB-nneTjOXyLPKELliqA/s1600/candlesticks1_6_5.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmcbnk7tpFYodeirGtyiF0sG68uzoDMU6IfVUWoP4xep1KiqXSgaejckhpkFnUphIgJvVhy9W63mLgXXK3D2ys5RcRKQ4qiJqmM-siXXpkQQQZB1onNndcE4oIB-nneTjOXyLPKELliqA/s1600/candlesticks1_6_5.jpg" /></a></div>
<br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><b><span style="font-family: "arial" , "helvetica" , sans-serif;">Rising power candles ------------------</span></b><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4qTiZMkJ70nQyTgPVV4UeU9qHUd_Lskyoo1IzBJ5iFONXp4aSoMOVWfXsk9ijNrTweQEQmeeb9wFjgL8pjck_P-7PuC1WFerwhLoMLe24fiUUyoP42Oupz-IkkQ36MpiYiCkYzPDvSg0/s1600/candlesticks1_6_6.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4qTiZMkJ70nQyTgPVV4UeU9qHUd_Lskyoo1IzBJ5iFONXp4aSoMOVWfXsk9ijNrTweQEQmeeb9wFjgL8pjck_P-7PuC1WFerwhLoMLe24fiUUyoP42Oupz-IkkQ36MpiYiCkYzPDvSg0/s1600/candlesticks1_6_6.jpg" /></a></div>
<div style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: center;">
<div style="text-align: left;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Some candles with falling power ---------------</span></b></div>
<div style="text-align: left;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrb05v5jfof_hLeIfw2QELEqicn-i6mUr_kwtUDH4i7iR8yLnp6zt6K_wdABTxuVtVvm4vqd9hfJj5se7Nk0SdThfD0IA03Nepvjcpuvh16j7UTMibou3ipms36Kd8AGFbkiTHAqyHa6E/s1600/candlesticks1_6_7.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrb05v5jfof_hLeIfw2QELEqicn-i6mUr_kwtUDH4i7iR8yLnp6zt6K_wdABTxuVtVvm4vqd9hfJj5se7Nk0SdThfD0IA03Nepvjcpuvh16j7UTMibou3ipms36Kd8AGFbkiTHAqyHa6E/s1600/candlesticks1_6_7.jpg" /></a></div>
</div>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Candles with reversal power -------------------</span></b><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuvtLOU8P7GF9_vrvEmi5fUFWzlUI_J-LXVahgwSkSZ6kDy0i9BZ3y649soTsTgNUXw5c-nhAfoV49kmEKSHuMeXWYlxoIPlbmzX0V030pRG22QQgx6crx_vcpH5Vo6TbCLEGUgZ1L4m0/s1600/candlesticks1_6_8.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuvtLOU8P7GF9_vrvEmi5fUFWzlUI_J-LXVahgwSkSZ6kDy0i9BZ3y649soTsTgNUXw5c-nhAfoV49kmEKSHuMeXWYlxoIPlbmzX0V030pRG22QQgx6crx_vcpH5Vo6TbCLEGUgZ1L4m0/s1600/candlesticks1_6_8.jpg" /></a></div>
<br />
<h2 class="sectionedit4" id="long_versus_short_bodies" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Long Versus Short Bodies</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level2">
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Generally speaking, the longer the body is, the more intense the buying or selling pressure. Conversely, short candlesticks indicate little price movement and represent consolidation.</span> </div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1yvrGk0mTkGjvPE08Jqq_x5wGecCQIpeTMoR17BDWJdqqbdSTihuojaEoMHqJlourAHfKaFcvqkQAxFEwH27sY8gmCKTNJoA4E3cjDz5be6mpKUpHoWdJcSm31CJ4fTpKs3muKb1vik8/s1600/candle1-longshort.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1yvrGk0mTkGjvPE08Jqq_x5wGecCQIpeTMoR17BDWJdqqbdSTihuojaEoMHqJlourAHfKaFcvqkQAxFEwH27sY8gmCKTNJoA4E3cjDz5be6mpKUpHoWdJcSm31CJ4fTpKs3muKb1vik8/s200/candle1-longshort.gif" width="200" /></a></div>
</div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Long white candlesticks show strong buying pressure.</b> The longer the white candlestick is, the further the close is above the open. This indicates that prices advanced significantly from open to close and buyers were aggressive. While long white candlesticks are generally bullish, much depends on their position within the broader technical picture. After extended declines, long white candlesticks can mark a potential turning point or support level. If buying gets too aggressive after a long advance, it can lead to excessive bullishness. </span></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Long black candlesticks show strong selling pressure.</b> The longer the black candlestick is, the further the close is below the open. This indicates that prices declined significantly from the open and sellers were aggressive. After a long advance, a long black candlestick can foreshadow a turning point or mark a future resistance level. After a long decline a long black candlestick can indicate panic or capitulation. </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiU8bkRPhDhbHVd6kS_sHWBOa2Ghfa7xwOIjjjQbUdCei9QsyFOq5bxRMBF-Q-h5jv0W9gNX0G5ipeI-vo92CylXTkeWNR1h9cQnHIuTkfct2zCDVH6hKGgU92AuXdi8J81154U4jYCql0/s1600/candle1-marubozu.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiU8bkRPhDhbHVd6kS_sHWBOa2Ghfa7xwOIjjjQbUdCei9QsyFOq5bxRMBF-Q-h5jv0W9gNX0G5ipeI-vo92CylXTkeWNR1h9cQnHIuTkfct2zCDVH6hKGgU92AuXdi8J81154U4jYCql0/s1600/candle1-marubozu.gif" /></a></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Even more potent long candlesticks are the Marubozu brothers, Black and White. Marubozu do not have upper or lower shadows and the high and low are represented by the open or close. A White Marubozu forms when the open equals the low and the close equals the high. This indicates that buyers controlled the price action from the first trade to the last trade. Black Marubozu form when the open equals the high and the close equals the low. This indicates that sellers controlled the price action from the first trade to the last trade. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit5" id="long_versus_short_shadows" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Long Versus Short Shadows</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The upper and lower shadows on candlesticks can provide valuable information about the trading session. Upper shadows represent the session high and lower shadows the session low. Candlesticks with short shadows indicate that most of the trading action was confined near the open and close. Candlesticks with long shadows show that prices extended well past the open and close. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSLaU5Vh8ZFDOarvy29nCCbTM57B78q7NjOxuJStBDHFrMJ7eMszAdl6Tga25mzcuDsMMj8iltv-pXESAI52op0CZW7ye64eHeXxwVGuh-PwpBakRzrt5gmYrL0fjE9QI2hJKPbgvrUMs/s1600/candle1-longshadows.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSLaU5Vh8ZFDOarvy29nCCbTM57B78q7NjOxuJStBDHFrMJ7eMszAdl6Tga25mzcuDsMMj8iltv-pXESAI52op0CZW7ye64eHeXxwVGuh-PwpBakRzrt5gmYrL0fjE9QI2hJKPbgvrUMs/s1600/candle1-longshadows.gif" /></a></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Candlesticks with a long upper shadow and short lower shadow indicate that buyers dominated during the session, and bid prices higher. However, sellers later forced prices down from their highs, and the weak close created a long upper shadow. Conversely, candlesticks with long lower shadows and short upper shadows indicate that sellers dominated during the session and drove prices lower. However, buyers later resurfaced to bid prices higher by the end of the session and the strong close created a long lower shadow. </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcxP-qcyuWo0A5L9XsMMGfwDTC_iJbPy4LH689HlSr4PH2dNHkl8uQOa_rd109ulmYGdv_73RFX4rf3Ty-Cuy61d9cnw8_hYbZxQFYdcuhNCCaatLR3nzLD2fYFv1S0W1wUTXMYMuXl-Q/s1600/candle1-spinning.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcxP-qcyuWo0A5L9XsMMGfwDTC_iJbPy4LH689HlSr4PH2dNHkl8uQOa_rd109ulmYGdv_73RFX4rf3Ty-Cuy61d9cnw8_hYbZxQFYdcuhNCCaatLR3nzLD2fYFv1S0W1wUTXMYMuXl-Q/s1600/candle1-spinning.gif" /></a></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Candlesticks with a long upper shadow, long lower shadow and small real body are called spinning tops. One long shadow represents a reversal of sorts; spinning tops represent indecision. The small real body (whether hollow or filled) shows little movement from open to close, and the shadows indicate that both bulls and bears were active during the session. Even though the session opened and closed with little change, prices moved significantly higher and lower in the meantime. Neither buyers nor sellers could gain the upper hand and the result was a standoff. After a long advance or long white candlestick, a spinning top indicates weakness among the bulls and a potential change or interruption in trend. After a long decline or long black candlestick, a spinning top indicates weakness among the bears and a potential change or interruption in trend. </span></div>
<h2 class="sectionedit6" id="doji">
Doji</h2>
<div class="level2">
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Doji are important candlesticks that provide information on their own and as components of in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns. Any bullish or bearish bias is based on preceding price action and future confirmation. The word “Doji” refers to both the singular and plural form. </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0IQQApmCuDh5-EIOhSNCJzBYbyE5-WaxDkoioy-cee-6DAiqfQTcB7AZWna3y-puYo-ZnvWdenG_W1Eu_OLX9AlzLZBn_0jEJO8wPD4VkafkjRrh66M6iHiZ6ZAKFdQ2UgcWeRDQP6mI/s1600/candle2-doji1.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0IQQApmCuDh5-EIOhSNCJzBYbyE5-WaxDkoioy-cee-6DAiqfQTcB7AZWna3y-puYo-ZnvWdenG_W1Eu_OLX9AlzLZBn_0jEJO8wPD4VkafkjRrh66M6iHiZ6ZAKFdQ2UgcWeRDQP6mI/s1600/candle2-doji1.gif" /></a></div>
</div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Ideally, but not necessarily, the open and close should be equal. While a doji with an equal open and close would be considered more robust, it is more important to capture the essence of the candlestick. Doji convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. The result is a standoff. Neither bulls nor bears were able to gain control and a turning point could be developing. </span></div>
<div style="text-align: justify;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtLu23KTHGNDP_A7I-hgtyg3Uue52qh6LgVdSZdgc3jpANLlSPJL0WIKHoUwt1tO-TcQ7n_DP9eWxMqZdESHywS8fiDgzFaGTmL3nufHs7JI7XrzumVGDNeviowQi9eNU34rJirSTZvo0/s1600/candle2-doji2.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtLu23KTHGNDP_A7I-hgtyg3Uue52qh6LgVdSZdgc3jpANLlSPJL0WIKHoUwt1tO-TcQ7n_DP9eWxMqZdESHywS8fiDgzFaGTmL3nufHs7JI7XrzumVGDNeviowQi9eNU34rJirSTZvo0/s1600/candle2-doji2.gif" /></a></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">  </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Different securities have different criteria for determining the robustness of a doji. A $20 stock could form a doji with a 1/8 point difference between open and close, while a $200 stock might form one with a 1 1/4 point difference. Determining the robustness of the doji will depend on the price, recent volatility, and previous candlesticks. Relative to previous candlesticks, the doji should have a very small body that appears as a thin line. Steven Nison notes that a doji that forms among other candlesticks with small real bodies would not be considered important. However, a doji that forms among candlesticks with long real bodies would be deemed significant. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h3 class="sectionedit7" id="doji_and_trend" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Doji and Trend</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The relevance of a doji depends on the preceding trend or preceding candlesticks. After an advance, or long white candlestick, a doji signals that the buying pressure is starting to weaken. After a decline, or long black candlestick, a doji signals that selling pressure is starting to diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched and a change in trend may be near. Doji alone are not enough to mark a reversal and further confirmation may be warranted. </span></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJErGW_0KRXmiMP0ISDom9NyV0rsk4v52yje8gjvBXJLTvnL063d9wI4bIdjtwtj2SFDaf8Z36hf5fbd4WJuCS7Gy1FGBHE6az5SzWCTvOHr_yuPiHyhNlQN0byg9RIja6Fx0rtmPYjaM/s1600/candle2-longwhite_doji.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJErGW_0KRXmiMP0ISDom9NyV0rsk4v52yje8gjvBXJLTvnL063d9wI4bIdjtwtj2SFDaf8Z36hf5fbd4WJuCS7Gy1FGBHE6az5SzWCTvOHr_yuPiHyhNlQN0byg9RIja6Fx0rtmPYjaM/s1600/candle2-longwhite_doji.gif" /></a> </div>
<div class="separator" style="clear: both; text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">After an advance or long white candlestick, a doji signals that buying pressure may be diminishing and the uptrend could be nearing an end. Whereas a security can decline simply from a lack of buyers, continued buying pressure is required to sustain an uptrend. Therefore, a doji may be more significant after an uptrend or long white candlestick. Even after the doji forms, further downside is required for bearish confirmation. This may come as a gap down, long black candlestick, or decline below the long white candlestick's open. After a long white candlestick and doji, traders should be on the alert for a potential evening doji star. </span></div>
<div class="separator" style="clear: both; text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgg0qMnL6Ktw8OXKqf5iD3HEOWAK_9nbR0N39pZ9hGXhx2e4ZRyJ99xwrC6D9kAeQguWpY4mfp-D8_UeDsSz5TeElEiV657xxB431yDRsGO7sAOGkrwp37xbYd18DX20w-IpZFwnfHIkWY/s1600/candle2-longblack_doji.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgg0qMnL6Ktw8OXKqf5iD3HEOWAK_9nbR0N39pZ9hGXhx2e4ZRyJ99xwrC6D9kAeQguWpY4mfp-D8_UeDsSz5TeElEiV657xxB431yDRsGO7sAOGkrwp37xbYd18DX20w-IpZFwnfHIkWY/s1600/candle2-longblack_doji.gif" /></a></div>
<div class="separator" style="clear: both; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">After a decline or long black candlestick, a doji indicates that selling pressure may be diminishing and the downtrend could be nearing an end. Even though the bears are starting to lose control of the decline, further strength is required to confirm any reversal. Bullish confirmation could come from a gap up, long white candlestick or advance above the long black candlestick's open. After a long black candlestick and doji, traders should be on the alert for a potential morning doji star. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h3 class="sectionedit8" id="long-legged_doji" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Long-Legged Doji</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Long-legged doji have long upper and lower shadows that are almost equal in length. These doji reflect a great amount of indecision in the market. Long-legged doji indicate that prices traded well above and below the session's opening level, but closed virtually even with the open. After a whole lot of yelling and screaming, the end result showed little change from the initial open. </span></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdDkh27a3aBx_b60UQdY4cJS64N7yO4Q5qQ4jNsiqrDg83BGftvJ2RqF-bFDJYaAD20unmw4FY8VGt26kDbkiyueE9RxOeJ6HNG7HnePGq_WtrnEfm5z5oPgE9EpKx1uQrbnCutdcsYqg/s1600/candle2-longleggeddoji.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdDkh27a3aBx_b60UQdY4cJS64N7yO4Q5qQ4jNsiqrDg83BGftvJ2RqF-bFDJYaAD20unmw4FY8VGt26kDbkiyueE9RxOeJ6HNG7HnePGq_WtrnEfm5z5oPgE9EpKx1uQrbnCutdcsYqg/s1600/candle2-longleggeddoji.gif" /></a></div>
<h3 class="sectionedit9" id="dragonfly_and_gravestone_doji">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Dragonfly and Gravestone Doji</span></h3>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja2avLUlOMZIFoT71V5eLRohZwhXWhalNCkQYMs4iz9p7ctUotuRDW_tsm0SxmLvuHocA3DBxVnQOQezA-AVqjNgI9UeDV4CQJprSoCRDoVAiKs87eGMaUzOxmnl8xjB3M4_faQhpkFcg/s1600/candle2-dragongravedoji.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja2avLUlOMZIFoT71V5eLRohZwhXWhalNCkQYMs4iz9p7ctUotuRDW_tsm0SxmLvuHocA3DBxVnQOQezA-AVqjNgI9UeDV4CQJprSoCRDoVAiKs87eGMaUzOxmnl8xjB3M4_faQhpkFcg/s1600/candle2-dragongravedoji.gif" /></a></div>
<h4 id="dragonfly_doji" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Dragonfly Doji</span></h4>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level4" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Dragonfly doji form when the open, high and close are equal and the low creates a long lower shadow. The resulting candlestick looks like a “T” with a long lower shadow and no upper shadow. Dragonfly doji indicate that sellers dominated trading and drove prices lower during the session. By the end of the session, buyers resurfaced and pushed prices back to the opening level and the session high. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The reversal implications of a dragonfly doji depend on previous price action and future confirmation. The long lower shadow provides evidence of buying pressure, but the low indicates that plenty of sellers still loom. After a long downtrend, long black candlestick, or at support, a dragonfly doji could signal a potential bullish reversal or bottom. After a long uptrend, long white candlestick or at resistance, the long lower shadow could foreshadow a potential bearish reversal or top. Bearish or bullish confirmation is required for both situations. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h4 id="gravestone_doji" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Gravestone Doji</span></h4>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level4" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Gravestone doji form when the open, low and close are equal and the high creates a long upper shadow. The resulting candlestick looks like an upside down “T” with a long upper shadow and no lower shadow. Gravestone doji indicate that buyers dominated trading and drove prices higher during the session. However, by the end of the session, sellers resurfaced and pushed prices back to the opening level and the session low. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> As with the dragonfly doji and other candlesticks, the reversal implications of gravestone doji depend on previous price action and future confirmation. Even though the long upper shadow indicates a failed rally, the intraday high provides evidence of some buying pressure. After a long downtrend, long black candlestick, or at support, focus turns to the evidence of buying pressure and a potential bullish reversal. After a long uptrend, long white candlestick or at resistance, focus turns to the failed rally and a potential bearish reversal. Bearish or bullish confirmation is required for both situations. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Before turning to the single and multiple candlestick patterns, there are a few general guidelines to cover. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit10" id="bulls_versus_bears" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Bulls Versus Bears</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> A candlestick depicts the battle between Bulls (buyers) and Bears (sellers) over a given period of time. An analogy to this battle can be made between two football teams, which we can also call the Bulls and the Bears. The bottom (intra-session low) of the candlestick represents a touchdown for the Bears and the top (intra-session high) a touchdown for the Bulls. The closer the close is to the high, the closer the Bulls are to a touchdown. The closer the close is to the low, the closer the Bears are to a touchdown. While there are many variations, I have narrowed the field to 6 types of games (or candlesticks): </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcpbdlDIlAri-op0oaRFvyEabdjWIQbDxEOiSezj1pZebT1rkTClrGiwkqW9rAlm6knlizEFwyj0fJczA4jmtoxEFVIcYYyi8oJ44-fmZ0y16PAV2fgP4CeI5mdH8LToE8ZFZBKNLwhBQ/s1600/candle3-overview.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="304" data-original-width="378" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcpbdlDIlAri-op0oaRFvyEabdjWIQbDxEOiSezj1pZebT1rkTClrGiwkqW9rAlm6knlizEFwyj0fJczA4jmtoxEFVIcYYyi8oJ44-fmZ0y16PAV2fgP4CeI5mdH8LToE8ZFZBKNLwhBQ/s1600/candle3-overview.gif" /></a></div>
<h3 class="sectionedit9" id="dragonfly_and_gravestone_doji">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></h3>
<ol style="text-align: justify;">
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>Long white candlesticks</i> indicate that the <b>Bulls</b> controlled the ball (trading) for most of the game.<br />
<br />
</span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>Long black candlesticks</i> indicate that the <b>Bears</b> controlled the ball (trading) for most of the game.</span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
</div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>Small candlesticks</i> indicate that neither team could move the ball and prices finished about where they started.</span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
</div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> A <i>long lower shadow</i> indicates that the <b>Bears</b> controlled the ball for part of the game, but lost control by the end and the Bulls made an impressive comeback.</span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
</div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> A <i>long upper shadow</i> indicates that the <b>Bulls</b> controlled the ball for part of the game, but lost control by the end and the Bears made an impressive comeback.</span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
</div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> A <i>long upper and lower shadow</i> indicates that the both the Bears and the Bulls had their moments during the game, but neither could put the other away, resulting in a standoff.</span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
</div>
</li>
</ol>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit11" id="what_candlesticks_don_t_tell_you" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">What Candlesticks Don't Tell You</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Candlesticks do not reflect the sequence of events between the open and close, only the relationship between the open and the close. The high and the low are obvious and indisputable, but candlesticks (and bar charts) cannot tell us which came first. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRe6ynVyJjezP8qGSEoetgAXf6EZfBRJuOa9mg4SLp6aYwJ30534LnG-EiNSe-3If9DlA9DcbQ0lSgYnPdrqfo4uammx-HK_g9foIbgtQ0iqrLOKT-woTbmldWMoi26O60QAa1nApRC08/s1600/candle3-highlow.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="304" data-original-width="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRe6ynVyJjezP8qGSEoetgAXf6EZfBRJuOa9mg4SLp6aYwJ30534LnG-EiNSe-3If9DlA9DcbQ0lSgYnPdrqfo4uammx-HK_g9foIbgtQ0iqrLOKT-woTbmldWMoi26O60QAa1nApRC08/s1600/candle3-highlow.gif" /></a></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">With a long white candlestick, the assumption is that prices advanced most of the session. However, based on the high/low sequence, the session could have been more volatile. The example above depicts two possible high/low sequences that would form the same candlestick. The first sequence shows two small moves and one large move: a small decline off the open to form the low, a sharp advance to form the high, and a small decline to form the close. The second sequence shows three rather sharp moves: a sharp advance off the open to form the high, a sharp decline to form the low, and a sharp advance to form the close. The first sequence portrays strong, sustained buying pressure, and would be considered more bullish. The second sequence reflects more volatility and some selling pressure. These are just two examples, and there are hundreds of potential combinations that could result in the same candlestick. Candlesticks still offer valuable information on the relative positions of the open, high, low and close. However, the trading activity that forms a particular candlestick can vary. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit12" id="prior_trend" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Prior Trend</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level2" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> In his book, <i>Candlestick Charting Explained</i>, Greg Morris notes that for a pattern to qualify as a reversal pattern, there should be a prior trend to reverse. Bullish reversals require a preceding downtrend and bearish reversals require a prior uptrend. The direction of the trend can be determined using trend lines, moving averages, peak/trough analysis or other aspects of technical analysis. A downtrend might exist as long as the security was trading below its down trend line, below its previous reaction high or below a specific moving average. The length and duration will depend on individual preferences. However, because candlesticks are short-term in nature, it is usually best to consider the last <b>1-4 weeks</b> of price action. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit13" id="candlestick_positioning" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Candlestick Positioning</span></h2>
<br />
<h3 class="sectionedit14" id="star_position" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Star Position</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKBhD8tPeA9OdLs5ZamnS4i3rVV2k7wr84jQxu_6tirSYwW_2kSfdrusjPA5kckRcQ1Er0LyngnjcybYIpEUeldizCLelSxvZN8XsrZbBYcnYCMJkxCuLAemgMHXEfS9ZQ3FXwGsGSzKU/s1600/candle3-starposition.gif" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="304" data-original-width="304" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKBhD8tPeA9OdLs5ZamnS4i3rVV2k7wr84jQxu_6tirSYwW_2kSfdrusjPA5kckRcQ1Er0LyngnjcybYIpEUeldizCLelSxvZN8XsrZbBYcnYCMJkxCuLAemgMHXEfS9ZQ3FXwGsGSzKU/s200/candle3-starposition.gif" width="200" /></a> A candlestick that gaps away from the previous candlestick is said to be in <b>star position</b>. The first candlestick usually has a large real body, but not always, and the second candlestick in star position has a small real body. Depending on the previous candlestick, the star position candlestick gaps up or down and appears isolated from previous price action. The two candlesticks can be any combination of white and black. <a class="wikilink1" href="http://stockcharts.com/school/doku.php?id=chart_school:glossary_d" title="chart_school:glossary_d">Doji</a>, hammers, shooting stars and spinning tops have small real bodies, and can form in the star position. Later we will examine 2- and 3-candlestick patterns that utilize the star position. </span></div>
<div style="text-align: justify;">
<br /></div>
<h3 class="sectionedit15" id="harami_position" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Harami Position</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level3">
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgP4Wjv2fxGrUk1bKP0UP3lGrJjJcVavVGRX0P9N_wqmqpVjDhj_MXL3-yjppkJazZrNdPmHMJThyZgCcTiNNJp3mVdl8qh1WwUWrJWCWf3QLDTr-eS_W3jjXHBXjkAsZmU5NoOo8nfgE8/s1600/candle3-haramiposition.gif" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgP4Wjv2fxGrUk1bKP0UP3lGrJjJcVavVGRX0P9N_wqmqpVjDhj_MXL3-yjppkJazZrNdPmHMJThyZgCcTiNNJp3mVdl8qh1WwUWrJWCWf3QLDTr-eS_W3jjXHBXjkAsZmU5NoOo8nfgE8/s200/candle3-haramiposition.gif" width="200" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;"> A candlestick that forms within the real body of the previous candlestick is in <b>Harami position</b>. Harami means pregnant in Japanese and the second candlestick is nestled inside the first. The first candlestick usually has a large real body and the second a smaller real body than the first. The shadows (high/low) of the second candlestick do not have to be contained within the first, though it's preferable if they are. Doji and spinning tops have small real bodies, and can form in the harami position as well. Later we will examine candlestick patterns that utilize the harami position. </span></div>
<div style="text-align: justify;">
<br /></div>
<h2 class="sectionedit16" id="long_shadow_reversals" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Long Shadow Reversals</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="level2" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> There are two pairs of single candlestick reversal patterns made up of a small real body, one long shadow and one short or non-existent shadow. Generally, the long shadow should be at least twice the length of the real body, which can be either black or white. The location of the long shadow and preceding price action determine the classification. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The first pair, Hammer and Hanging Man, consists of identical candlesticks with small bodies and long lower shadows. The second pair, Shooting Star and Inverted Hammer, also contains identical candlesticks, except, in this case, they have small bodies and long upper shadows. Only preceding price action and further confirmation determine the bullish or bearish nature of these candlesticks. The Hammer and Inverted Hammer form after a decline and are bullish reversal patterns, while the Shooting Star and Hanging Man form after an advance and are bearish reversal patterns. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h3 class="sectionedit17" id="hammer_and_hanging_man" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Hammer and Hanging Man</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The Hammer and Hanging Man look exactly alike, but have different implications based on the preceding price action. Both have small real bodies (black or white), long lower shadows and short or non-existent upper shadows. As with most single and double candlestick formations, the Hammer and Hanging Man require confirmation before action. </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyEcLhhKB36Ypja5LzGanKJgr4YKjqreRDLDMG9XVAD1pb92ohtnAddq9wuKfuFJ6iD4sIVIDVJlLpXvETlw281r5JpHOeKTKJ6XAJn3der7LQvfop9IXMumOjpuBRfXK03WMHnPBRQbg/s1600/candle4-hammerhanging1.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="308" data-original-width="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyEcLhhKB36Ypja5LzGanKJgr4YKjqreRDLDMG9XVAD1pb92ohtnAddq9wuKfuFJ6iD4sIVIDVJlLpXvETlw281r5JpHOeKTKJ6XAJn3der7LQvfop9IXMumOjpuBRfXK03WMHnPBRQbg/s1600/candle4-hammerhanging1.gif" /></a></div>
<br />
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session. However, the strong finish indicates that buyers regained their footing to end the session on a strong note. While this may seem enough to act on, hammers require further bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further buying pressure, and preferably on expanding volume, is needed before acting. Such confirmation could come from a gap up or long white candlestick. Hammers are similar to selling climaxes, and heavy volume can serve to reinforce the validity of the reversal.  </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBseAAADpdKRGv3-M5bdgLVo-lnVQ8wBqw1mkLcl839gpkHMrm0QmZXH1Le7hNm_TmprDtpVIrEgHpmY5oZPljKc6tI5eTM3YrsKejghuaUyu2dOMSDidpoZJRTgitbGwIIFvp9gCvvUY/s1600/candle4-hammerhanging2.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="304" data-original-width="504" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBseAAADpdKRGv3-M5bdgLVo-lnVQ8wBqw1mkLcl839gpkHMrm0QmZXH1Le7hNm_TmprDtpVIrEgHpmY5oZPljKc6tI5eTM3YrsKejghuaUyu2dOMSDidpoZJRTgitbGwIIFvp9gCvvUY/s1600/candle4-hammerhanging2.gif" /></a></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Hanging Man is a bearish reversal pattern that can also mark a top or resistance level. Forming after an advance, a Hanging Man signals that selling pressure is starting to increase. The low of the long lower shadow confirms that sellers pushed prices lower during the session. Even though the bulls regained their footing and drove prices higher by the finish, the appearance of selling pressure raises the yellow flag. As with the Hammer, a Hanging Man requires bearish confirmation before action. Such confirmation can come as a gap down or long black candlestick on heavy volume. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h3 class="sectionedit18" id="inverted_hammer_and_shooting_star" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Inverted Hammer and Shooting Star</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The Inverted Hammer and Shooting Star look exactly alike, but have different implications based on previous price action. Both candlesticks have small real bodies (black or white), long upper shadows and small or nonexistent lower shadows. These candlesticks mark potential trend reversals, but require confirmation before action. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMrnOBi6ExZ2CKo_jmSUUbcMYR6_DcKm4mUCcbGPJuq2x-I_NNMlqwTxu2ORxcQVByL7owJp88J0GWgk_WBHNf-zVhWJ-JW8phckSy4jwA4Cp-gpRop-AbCpVh_LNGvwKXxcnG8MjAing/s1600/candle4-invertedshooting1.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="308" data-original-width="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMrnOBi6ExZ2CKo_jmSUUbcMYR6_DcKm4mUCcbGPJuq2x-I_NNMlqwTxu2ORxcQVByL7owJp88J0GWgk_WBHNf-zVhWJ-JW8phckSy4jwA4Cp-gpRop-AbCpVh_LNGvwKXxcnG8MjAing/s1600/candle4-invertedshooting1.gif" /></a></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Shooting Star is a bearish reversal pattern that forms after an advance and in the star position, hence its name. A Shooting Star can mark a potential trend reversal or resistance level. The candlestick forms when prices gap higher on the open, advance during the session and close well off their highs. The resulting candlestick has a long upper shadow and small black or white body. After a large advance (the upper shadow), the ability of the bears to force prices down raises the yellow flag. To indicate a substantial reversal, the upper shadow should relatively long and at least 2 times the length of the body. Bearish confirmation is required after the Shooting Star and can take the form of a gap down or long black candlestick on heavy volume. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifAbTyr7vKCoGz9vYkMl7grWIRMCuSNSjo4E8OmPUkWGR3CopohBC2mDOcYaOatVYmgqdN_361PqpUxLIMDmjzUpB4r8f_c9a9E4AT8a-0bJEZyCad2aOID7Z-2BEu6e-GBXm-_Y5H1vQ/s1600/candle4-invertedshooting2.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="304" data-original-width="504" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifAbTyr7vKCoGz9vYkMl7grWIRMCuSNSjo4E8OmPUkWGR3CopohBC2mDOcYaOatVYmgqdN_361PqpUxLIMDmjzUpB4r8f_c9a9E4AT8a-0bJEZyCad2aOID7Z-2BEu6e-GBXm-_Y5H1vQ/s1600/candle4-invertedshooting2.gif" /></a></div>
<br />
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The Inverted Hammer looks exactly like a Shooting Star, but forms after a decline or downtrend. Inverted Hammers represent a potential trend reversal or support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An Inverted Hammer followed by a gap up or long white candlestick with heavy volume could act as bullish confirmation. </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<h2 class="sectionedit19" id="blending_candlesticks" style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Blending Candlesticks *****</span></h2>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> Candlestick patterns are made up of one or more candlesticks and can be blended together to form one candlestick. This blended candlestick captures the essence of the pattern and can be formed using the following: </span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<ul style="text-align: justify;">
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The open of first candlestick</span></div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The close of the last candlestick</span></div>
</li>
<li class="level1"><div class="li">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> The high and low of the pattern</span></div>
</li>
</ul>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirLhWzsd6SsomyLSHIDTHz-uRuiw9X33zOsnXF6yNF3zPdNqe7hvpZAFKt1Hu5hZu1dBMSvkULS1Ta0ALXyc-02FMq4r6FlNVdCPd44oEGTuDQXKNC82UwRYxbxiXFlVjxBmmIqlCoe3o/s1600/candle5-blend1.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="308" data-original-width="508" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirLhWzsd6SsomyLSHIDTHz-uRuiw9X33zOsnXF6yNF3zPdNqe7hvpZAFKt1Hu5hZu1dBMSvkULS1Ta0ALXyc-02FMq4r6FlNVdCPd44oEGTuDQXKNC82UwRYxbxiXFlVjxBmmIqlCoe3o/s1600/candle5-blend1.gif" /></a></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">By using the open of the first candlestick, close of the second candlestick, and high/low of the pattern, a Bullish Engulfing Pattern or Piercing Pattern blends into a Hammer. The long lower shadow of the Hammer signals a potential bullish reversal. As with the Hammer, both the Bullish Engulfing Pattern and the Piercing Pattern require bullish confirmation. </span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2Qqlv_2OLKs94ebvtQ743MOm_IIPN9RCo3eMWJNiaoIhvHdvN7lUirZPiTwNQjXwTQVfizVnU5AKKjdeFaWssviRFOWHz4c1sHlQgMOC8qBKL80V9HRYDXuN8VYFdXwkHc_X21FarhOg/s1600/candle5-blend2.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="308" data-original-width="508" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2Qqlv_2OLKs94ebvtQ743MOm_IIPN9RCo3eMWJNiaoIhvHdvN7lUirZPiTwNQjXwTQVfizVnU5AKKjdeFaWssviRFOWHz4c1sHlQgMOC8qBKL80V9HRYDXuN8VYFdXwkHc_X21FarhOg/s1600/candle5-blend2.gif" /></a></div>
<div class="separator" style="clear: both; text-align: left;">
<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Blending the candlesticks of a Bearish Engulfing Pattern or Dark Cloud Cover Pattern creates a Shooting Star. The long, upper shadow of the Shooting Star indicates a potential bearish reversal. As with the Shooting Star, Bearish Engulfing, and Dark Cloud Cover Patterns require bearish confirmation. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxKiO5QqMEtgdGWeWHjQHuEyHvy6HdlpGYItu7jkdDeFO82XrRevonr0InW9kh_zFynLqZNvMlhADtR4cXLMoQgtlJ79TUufGNCfzCF8-xSjkCSruXwFvIpXE-ftRDHJwRj6EbozxuaXw/s1600/candle5-blend3.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="308" data-original-width="508" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxKiO5QqMEtgdGWeWHjQHuEyHvy6HdlpGYItu7jkdDeFO82XrRevonr0InW9kh_zFynLqZNvMlhADtR4cXLMoQgtlJ79TUufGNCfzCF8-xSjkCSruXwFvIpXE-ftRDHJwRj6EbozxuaXw/s1600/candle5-blend3.gif" /></a></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">More than two candlesticks can be blended using the same guidelines: open from the first, close from the last and high/low of the pattern. Blending Three White Soldiers creates a long white candlestick and blending Three Black Crows creates a long black candlestick.</span></div>
<hr />
<div style="text-align: justify;">
<br /></div>
</div>
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-size: large;"> Important  Main  Factor  </span></span></b><br />
<h2 class="clear">
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></h2>
<span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><br />
<ul type="disc">
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A big white body means buyers are in power, and the trend is up. </span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A big black body means sellers are in power, and the trend is down.</span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A small body means that buyers and sellers are trying to take power.</span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A big shadow below is a positive sign and indicates strength.</span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A big shadow above is a negative sign and indicates weakness.</span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A doji is a candle with opening and closing prices that are close together. </span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A doji means that price acceleration is slowing down and that bulls and bears are in balance. </span>
                      </li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A doji at a top or bottom often is the first signal of a price reversal.</span></li>
</ul>
<br />
<h1>
apanese Candlesticks Cheat Sheet</h1>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Did you click here first? If you did, stop reading right now and go through the entire Japanese Candlesticks Lesson first! If you're REALLY done with those, here's quick one page reference cheat sheet for single, dual, and triple candlestick formations to easily identify what kind of pattern you are looking at whenever you are trading. Go ahead and bookmark this page... No need to be shy! </span></div>
<div style="text-align: justify;">
<br /></div>
<div style="background-color: white; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">
<br />
<table border="1" cellpadding="0" class="MsoNormalTable" style="border: 1pt solid windowtext; margin-left: auto; margin-right: auto; text-align: left; width: 525px;">
 <tbody>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
  <td style="background: #333333; border: none; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Number of Bars</span></b></div>
</td>
  <td style="background: #333333; border: none; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Name</span></b></div>
</td>
  <td style="background: #333333; border: none; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Bullish or Bearish?</span></b></div>
</td>
  <td style="background: #333333; border: none; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">What It Looks Like?</span></b></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 1;">
  <td rowspan="8" style="border-left: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: red; mso-bidi-font-family: "Times New Roman";">Single</span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Spinning Top</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Neutral</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Spinning Tops" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-spinning-tops-2.png" title="Spinning Tops" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 2;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Doji</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: blue;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Neutral</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Different Types of Dojis" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-dojis.png" title="Different Types of Dojis" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 3;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">White Marubozu</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: #38761d;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></span></b></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="White Marubozu" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-white-marubozu.png" title="White Marubozu" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 4;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Black Marubozu</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Black Marubozu" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-black-marubozu.png" title="Black Marubozu" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 5;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Hammer</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Hammer" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-hammer.png" title="Hammer" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 6;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Hanging Man</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Hanging Man" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-hanging-man.png" title="Hanging Man" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 7;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Inverted Hammer</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Inverted Hammer" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-inverted-hammer.png" title="Inverted Hammer" width="95" /></span></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 8; mso-yfti-lastrow: yes;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Shooting Star</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border-right: none; border: solid windowtext 1.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><img alt="Shooting Star" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-shooting-star.png" title="Shooting Star" width="95" /></span></div>
</td>
 </tr>
</tbody></table>
<div class="MsoNormal" style="text-align: center;">
<br />
<table border="1" cellpadding="0" class="MsoNormalTable" style="border: 1pt solid windowtext; margin-left: auto; margin-right: auto; text-align: left; width: 525px;">
 <tbody>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
  <td style="background: #333333; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Number of Bars</span></b></div>
</td>
  <td style="background: #333333; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Name</span></b></div>
</td>
  <td style="background: #333333; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">Bullish or Bearish?</span></b></div>
</td>
  <td style="background: #333333; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: white; mso-bidi-font-family: "Times New Roman";">What it Looks Like? </span></b></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 1;">
  <td rowspan="4" style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: red; mso-bidi-font-family: "Times New Roman";">Double</span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish Engulfing</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Bullish Engulfing" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-bullish-engulfing.png" title="Bullish Engfulfing" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 2;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish Engulfing</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Bearish Engulfing" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-bearish-engulfing.png" title="Bearish Engfulfing" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 3;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Tweezer Tops</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Tweezer Tops" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-tweezer-tops.png" title="Tweezer Tops" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 4;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Tweezer Bottoms</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Tweezer Bottoms" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-tweezer-bottoms.png" title="Tweezer Bottoms" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 5;">
  <td rowspan="6" style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="color: red; mso-bidi-font-family: "Times New Roman";">Triple</span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Morning Star</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Morning Star" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-morning-star.png" title="Morning Star" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 6;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Evening Star</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #cc0000;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Evening Star" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-evening-star.png" title="Evening Star" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 7;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Three White Soldiers</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Three White Soldiers" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-three-white-soldiers.png" title="Three White Soldiers" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 8;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Three Black Crows</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #cc0000;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Three Black Crows" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-three-black-crows.png" title="Three Black Crows" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 9;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Three Inside Up</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: #38761d;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bullish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Three Inside Up" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-three-inside-up.png" title="Three Inside Up" width="95" /></div>
</td>
 </tr>
<tr style="mso-yfti-irow: 10; mso-yfti-lastrow: yes;">
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Three Inside Down</span></span></b></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="mso-bidi-font-family: "Times New Roman";">Bearish</span></span></b></span></div>
</td>
  <td style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: .75pt .75pt .75pt .75pt;"><div align="center" class="MsoNormal" style="text-align: center;">
<img alt="Three Inside Down" border="0" height="100" src="http://www.babypips.com/school/images/grade2/cs-three-inside-down.png" title="Three Inside Down" width="95" /></div>
</td>
 </tr>
</tbody></table>
</div>
<div class="MsoNormal" style="text-align: left;">
<h1>
Quick View Candlesticks patterns and Psychology-</h1>
Candlesticks is a Japanese trading technique invented in the 18 century by rice traders. Today this technique is called candlestick charting and is widely used when drawing stock charts.<br />
<br />
<img src="http://www.vfmdirect.com/graphs/cd/candles.gif" /><br />
Candlestick charts use the same price data as bar charts (open, high, low, close). However, candlestick charts are drawn in a much more visually identifiable way typically resembling a candle with wicks on both ends. The high and low are described as shadows and plotted as a single line.<br />
<h2>
About patterns</h2>
Candlesticks form interesting patterns which give excellent clues above market trend and direction. Patterns are independent of time frame and can even clubbed!<br />
I have listed my favorites patterns here. These are reliable and the reliability increases dramatically if the previous move is strong.<br />
<h2>
Bullish Patterns:</h2>
<table border="1" cellpadding="1" class="small" style="margin-left: 0px; margin-right: auto; text-align: left; width: 100%px;">
<tbody>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/star_morning.gif" /></td><td valign="top">Morning Star: Occurs after a sustained downtrend. The 2nd day gaps lower, but trades in a small range. The gap-down indicates panic but bulls step in (buy on panic declines) thus limiting the downside. The bullishness of this indecision is confirmed by the higher close of the 3rd day.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/tristar_bullish.gif" /></td><td valign="top">Bullish Tristar: Occurs after a sustained downtrend. This formation is rare, so always be suspect of the data. This pattern is not reliable for stocks with low volume. The huge amount of indecision created by these three dojis must not be ignored by traders. This level of indecision strongly suggests that the trend is about to change.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/dojistar_bullish.gif" /></td><td valign="top">Bullish Doji: The downtrend is in full force with a strong 1st day. All confidence built up by the bears from the 1st day is destroyed when the 2nd day's gap down closes near it's open. Short covering will quickly appear if the next day opens higher.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/breakaway_bullish.gif" /></td><td valign="top">Bullish breakaway: The down trend is accelerated by a gap down. The next few days trend down, however start to run out of steam. The last day of the formation shows a breakout and close above the previous 3 days, however the gap created on the 1st day remains unfilled. Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/hammer_normal.gif" /></td><td valign="top">Hammer: The long tail and small real body at the top of the trading range indicates strong buying by bulls (buy on panic declines). Bears wonder if this is the end of the downtrend and take measures to cover shorts.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/engulfing_bullish.gif" /></td><td valign="top">Bullish Engulfing: Gap-down opening but close above previous days highs. This damages the spirits of the shorts and brings into question the bear trend which prompts additional buying in the coming days.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/bullish_low.gif" /></td><td valign="top">Bullish Low: Getting two days with equal closes should alert the shorts that an important support level may have been found. Higher prices may be ahead in the days to come. A higher close the next day would serve as confirmation of the reversal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/tails_bullish.gif" /></td><td valign="top">Bullish Tails: Alerts to possible bottoming out. Even though markets are making lower highs and lower lows, buying at lower levels kicks in so markets close towards days highs.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/three_inside_up.gif" /></td><td valign="top">3 Inside Up: Inside day represents volatility compression. Break of 2 day swing high happens on 3rd day which confirms trend reversal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/three_outside_up.gif" /></td><td valign="top">3 Outside Up: upside day represents great volatility as bulls and bears get active. Break of days high on 3rd day confirms trend reversal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/bullish_side_by_side.gif" /></td><td valign="top">Bullish Side-by-Side: The last 2 days price action shows that markets are holding above their previous lows (support). The uptrend remains intact as long as the support holds (stoploss).</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/3m_rising.gif" /></td><td valign="top">Bullish Continuation: Markets take a breather before continuing it's uptrend. Notice that a new low is not seen during the 4 remaining days of this formation. This gives little confidence to the bears, making way for bulls.</td></tr>
</tbody></table>
<h2>
Bearish Patterns:</h2>
<table border="1" cellpadding="1" class="small" style="margin-left: 0px; margin-right: auto; text-align: left; width: 100%px;"><tbody>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/star_evening.gif" /></td><td valign="top">Evening Star: Occurs after a sustained uptrend. The 2nd day gaps higher, but trades in a small range. The gap-up indicates extreme greed but bears step in (sell when others are greedy) thus limiting the upside. The bearishness of this indecision is confirmed by the lower close of the 3rd day.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/tristar_bearish.gif" /></td><td valign="top">Bearish Tristar: Occurs after a sustained downtrend. This formation is rare, so always be suspect of the data. This pattern is not reliable for stocks with low volume. The huge amount of indecision created by these three dojis must not be ignored by traders. This level of indecision strongly suggests that the trend is about to change.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/dojistar_bearish.gif" /></td><td valign="top">Bearish Doji Star: The uptrend is in full force with a strong 1st day. All confidence built up by the bulls from the 1st day is destroyed when the 2nd day's gap up closes near its open. Profit takers will quickly appear if the next day opens lower.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/breakaway_bearish.gif" /></td><td valign="top">Bearish Breakaway: The up trend is accelerated by a gap up. The next few days trend up, however start to run out of steam. The last day of the formation shows a breakdown and close below the previous 3 days, however the gap created on the 1st day remains unfilled. Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/hammer_inverted.gif" /></td><td valign="top">Inverted hammer: The long upper shadow and small real body at the bottom of the trading range indicates strong selling by bears. Bulls wonder if this is the end of the uptrend and take measures to protect their gains.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/bearish_2crows.gif" /></td><td valign="top">Bearish 2 Crows: The gap created on the 2nd day gets filled by the 3rd day. This quick pull back does not bode well for the bulls. This price action indicates a short term top.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/engulfing_bearish.gif" /></td><td valign="top">Bearish Engulfing: Gap-up opening but close below previous days low. This damages the spirits of the longs and brings into question the bull trend which prompts additional selling in the coming days.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/tails_bearish.gif" /></td><td valign="top">Bearish Tails: Alerts to possible topping out. Even though markets are making higher highs and higher lows, selling at higher levels kicks in so markets close towards days low.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/three_inside_down.gif" /></td><td valign="top">3 Inside Down: Inside day represents volatility compression. Break of 2 day swing low happens on 3rd day which confirms trend reversal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/three_outside_down.gif" /></td><td valign="top">3 Outside Down: Outside day represents great volatility as bulls and bears get active. Break of days low on 3rd day confirms trend reversal.</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/bearish_side_by_side.gif" /></td><td valign="top">Bearish Side-by-Side: The last 2 days price action shows that markets are trading below their previous highs (resistance). The downtrend remains intact as long as the resistance holds (stoploss)</td></tr>
<tr><td valign="top"><img src="http://www.vfmdirect.com/graphs/cd/3m_falling.gif" /></td><td valign="top">Bearish Continuation: Markets take a breather before continuing it's downtrend. Notice that a new high is not seen during the 4 remaining days of this formation. This gives little confidence to the bulls, making way for the short sellers.</td></tr>
</tbody></table>
</div>
<div class="MsoNormal" style="text-align: center;">
<br /></div>
<br />
<br />
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen="" class="YOUTUBE-iframe-video" data-thumbnail-src="https://i.ytimg.com/vi/7nXEOVdtQAU/0.jpg" frameborder="0" height="266" src="https://www.youtube.com/embed/7nXEOVdtQAU?feature=player_embedded" width="320"></iframe></div>
</div>

Candlestick Psychological Background 11.Candlestick Psychological Background

Candlestick Basic Introduction In the 1700s, a legendary Japanese rice trader named Homma used trading techniques that eventually e...