CANDLESTICK SHADOW The line that appears above and below the body is referred as the SHADOW WICK or the TAIL Its almost as important as the body It shows us the range for that period It adds to the bodys interpretation of the market psychology ID: 298895
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JAPANESE CANDLESTICK PATTERNSSlide2
CANDLESTICK SHADOW
The line that appears above and below the body is referred as the SHADOW, WICK or the TAIL
Its almost as important as the body
It shows us the range for that period
It adds to the body’s interpretation of the market psychology
It represents the high and low for that period
The tail on the top shows us the high for that period
The tail on the bottom shows us the low for that periodSlide3
CANDLESTICK SHADOWSlide4
CANDLESTICK SHADOW
A long SHADOW can show support or resistance
depending on where it is in the candle and where
It’s located on the charts
Possible Resistance
Possible SupportSlide5
BASIC CANDLESTICK PATTERNS
MARUBOZO
SHORT DAYLONG DAYSPINNING TOP
DOJI PAPER UMBRELLASlide6
MARUBOZO
Shows large range between the opening and closing price with immediate strength or weakness
Usually the second bar in a reversal or continuation pattern
Has no shadows Slide7
SHORT DAYS
Shows small range between the opening and closing price
Small Shadows
Multiple short days can indicate consolidationSlide8
LONG DAYS
Shows large range between the opening and closing price
Shows strength and weaknessSlide9
SPINNING TOPS
The shadows are longer than the body
Shows indecision
Also seen in consolidationSlide10
DOJI
The open and close must be equal or very close
Gravestone is BEARISH when at the top of a short term rally
Dragonfly is BULLISH when at the bottom of a short term break
Long-Legged shows INDECISION
Usually seen in illiquid markets, no trades may have took place
GRAVESTONE
DRAGONFLY
LONG-LEGGED
FOUR PRICESlide11
GRAVESTONE DOJI
SELL BELOW
Gravestones must be seen at the top of a short term uptrend
Buying comes in right from the opening showing continued strength followed by a selloff later in the day, closing near or on the lows
There could be a small wick or very small body
This must be followed by a confirmation bar to confirm trade
Must sell below the lowsSlide12
DRAGONFLY DOJI
Dragonflys
must be seen at the bottom of a short term downtrend
Selling comes in right from the opening showing continued weakness followed by a rally later in the day, closing near or on the highs
There could be a small wick or very small body
BUY ABOVESlide13
PAPER UMBRELLA
Color does not matter
Location on the charts is what’s important
They can have small shadowsSlide14
CANDLESTICK REVERSAL PATTERNS
HAMMER
HANGING MANINVERTED HAMMER
SHOOTING STAR
ENGULFING
HARAMI
HARAMI CROSSDOJI STAREVENING STARMORNING STARSlide15
HAMMER
Hammers must be seen at the bottom of a downtrend
Aggressive selling right from the open with a recovery
throughout the day, closing near the highs creates the handle
Color of the body does not matter
Must wait for the next candle to confirm before putting on the trade
BUY ABOVESlide16
The Hanging Man must be seen at the top of an uptrend
Aggressive buying right from the open with a selloff
throughout the day, closing near the highs creates the pattern
Color of the body does not matter
Must wait for the next candle to confirm before putting on the
trade
SELL BELOW
HANGING MANSlide17
INVERTED HAMMER
Inverted Hammers must be seen at the bottom of a downtrend
Buying comes in right from the opening with a selloff later in the day
Color of the body does not matter
BUY ABOVESlide18
SHOOTING STAR
Shooting Stars must be seen at the top of an uptrend
Buying comes in right from the opening showing continued strength followed by a selloff later in the day, closing near the lows creating the small body
Color of the body does not matter
Must wait for the next candle to confirm before putting on the
trade
SELL BELOWSlide19
ENGULFING
In an uptrend the open should be higher than previous bars high and in a downtrend the open should be lower than the previous bars low showing a continuation of the trend
The close in should then totally engulf the previous bars high or low to enter the trade
SELL BELOW
BUY ABOVESlide20
The current candle’s range should be completely engulfed by the previous candle’s body
The colors of the bodies should be reversed for a reversal
The size of the second candle affects the magnitude of the reversal
Must wait for the next candle to confirm before putting on the
trade
HARAMI
SELL BELOW
BUY ABOVESlide21
The current candle’s range should be completely engulfed by the previous candle’s body
The size of the second candle affects the magnitude of the reversal
Must wait for the next candle to confirm before putting on the
trade
HARAMI CROSS
SELL BELOW
BUY ABOVESlide22
DOJI STAR
Shows indecision, use overbought/oversold technical indicators when at tops or bottoms of a move
Needs a confirmation candle
BUY ABOVE
SELL BELOWSlide23
MORNING/EVENING DOJI STAR
The star must gap lower at the bottom of a down trend or gap higher at the top of an up trend
Needs a confirmation candle
BUY ABOVE
SELL BELOWSlide24
MORNING/EVENING STAR
The star must gap lower at the bottom of a down trend or gap higher at the top of an up trend
Needs a confirmation candle
BUY ABOVE
SELL BELOWSlide25
ABANDONED BABY
Must have a gap in the direction of the trend followed by a Star or
Doji
This must be followed by another gap in the opposite direction
GAP
GAP
BUY ABOVE
SELL BELOWSlide26
Bullish reversal
Continuation of a bearish trend seen by lower open, making new lows, following a long red candle
Closes the day higher than 50% of the previous body
PIERCING LINE
BUY ABOVESlide27
DARK CLOUD COVER
Bearish reversal
Continuation of a bullish trend seen by higher open, making new highs, following a long green candle
Closes the day lower than 50% of the previous body
SELL BELOW