The Best Candlestick Patterns : Candlestick Types Forex & Binary trading For Beginners
A candlestick chart (also called Japanese candlestick chart) is a style of financial chart used to describe price movements of a security, derivative, or currency. Each “candlestick” typically shows one day, thus a one-month chart may show the 20 trading days as 20 “candlesticks”. Shorter intervals than one day are common on computer charts, longer are possible.
Information of candlestick
Candlesticks are graphical representations of price movements for a given period of time. They are commonly formed by the opening, high, low, and closing prices of a financial instrument.
If the opening price is above the closing price then a filled (normally red or black) candlestick is drawn.
If the closing price is above the opening price, then normally a green or a hollow candlestick (white with black outline) is shown.
The filled or hollow portion of the candle is known as the body or real body, and can be long, normal, or short depending on its proportion to the lines above or below it.
The lines above and below, known as shadows, tails, or wicks represent the high and low price ranges within a specified time period. However, not all candlesticks have shadows.
Big Black Candle
Big Black Candle Has an unusually long black body with a wide range between high and low. Prices open near the high and close near the low. Considered a bearish pattern.
Big White Candle
Big White Candle Has an unusually long white body with a wide range between high and low of the day. Prices open near the low and close near the high. Considered a bullish pattern.
Black Body Formed when the opening price is higher than the closing price. Considered to be a bearish signal.
Doji Formed when opening and closing prices are virtually the same. The lengths of shadows can vary.
Dragonfly Doji Formed when the opening and the closing prices are at the highest of the day. If it has a longer lower shadow it signals a more bullish trend. When appearing at market bottoms it is considered to be a reversal signal.
Gravestone Doji Formed when the opening and closing prices are at the lowest of the day. If it has a longer upper shadow it signals a bearish trend. When it appears at market top it is considered a reversal signal.
Long-Legged Doji Consists of a Doji with very long upper and lower shadows. Indicates strong forces balanced in opposition.
Hanging Man A black or a white candlestick that consists of a small body near the high with a little or no upper shadow and a long lower tail. The lower tail should be two or three times the height of the body. Considered a bearish pattern during an uptrend.
Hammer A black or a white candlestick that consists of a small body near the high with a little or no upper shadow and a long lower tail. Considered a bullish pattern during a downtrend.
Inverted Black Hammer
Inverted Black Hammer A black body in an upside-down hammer position. Usually considered a bottom reversal signal.
Inverted Hammer A black or a white candlestick in an upside-down hammer position.
Long lower shadow
Long Lower Shadow A black or a white candlestick is formed with a lower tail that has a length of 2/3 or more of the total range of the candlestick. Normally considered a bullish signal when it appears around price support levels.
Long upper shadow
Long Upper Shadow A black or a white candlestick with an upper shadow that has a length of 2/3 or more of the total range of the candlestick. Normally considered a bearish signal when it appears around price resistance levels.
Marubozu A long or a normal candlestick (black or white) with no shadow or tail. The high and the lows represent the opening and the closing prices. Considered a continuation pattern.
Shooting Star A black or a white candlestick that has a small body, a long upper shadow and a little or no lower tail. Considered a bearish pattern in an uptrend.
Spinning Top A black or a white candlestick with a small body. The size of shadows can vary. Interpreted as a neutral pattern but gains importance when it is part of other formations.
White Body Formed when the closing price is higher than the opening price and considered a bullish signal.
Shaven Bottom A black or a white candlestick with no lower tail. [Compare with Inverted Hammer.]
Shaven Head A black or a white candlestick with no upper shadow. [Compared with