What is Candlestick pattern #sharemarket #stockmarket

Candlestick pattern explained.

I am zero (rishi)

What is Candlestick pattern 

A candlestick pattern is a type of price chart used in technical analysis to represent the movement of an asset's price over a certain period of time. The chart displays a series of candlesticks, each of which represents a specific period of time (such as one day, one hour, or one minute), and shows the open, high, low, and close price of the asset for that period.

Candlesticks are typically composed of a rectangular body with a wick or shadow on either end. The body represents the difference between the opening and closing price of the asset for that period, while the wicks or shadows represent the high and low prices reached during that period.

Candlestick patterns are used by traders and analysts to identify trends and predict future price movements. There are many different types of candlestick patterns, each with its own unique characteristics and potential indications for future price movements. Some common patterns include the bullish engulfing pattern, the bearish engulfing pattern, the hammer pattern, and the shooting star pattern.

I am zero (rishi)

Candlestick patterns are an important tool for technical analysts as they provide a visual representation of price movements and help traders to identify potential reversal points, as well as to confirm existing trends. Here are some more details on different types of candlestick patterns:

Bullish engulfing pattern: This pattern occurs when a small red candlestick is followed by a larger green candlestick, where the green candlestick's body completely engulfs the body of the red candlestick. This pattern is a bullish signal that suggests a potential reversal from a downtrend to an uptrend.

Bearish engulfing pattern: This pattern occurs when a small green candlestick is followed by a larger red candlestick, where the red candlestick's body completely engulfs the body of the green candlestick. This pattern is a bearish signal that suggests a potential reversal from an uptrend to a downtrend.

Hammer pattern: This pattern is formed when a candlestick has a small body with a long lower wick or shadow and little or no upper wick or shadow. This pattern indicates a potential reversal from a downtrend to an uptrend.

Shooting star pattern: This pattern is formed when a candlestick has a small body with a long upper wick or shadow and little or no lower wick or shadow. This pattern indicates a potential reversal from an uptrend to a downtrend.

Doji pattern: This pattern occurs when a candlestick has a small body with equal or nearly equal open and close prices, resulting in a cross-like shape. This pattern suggests indecision in the market and can indicate a potential trend reversal.

These are just a few examples of the many candlestick patterns used by traders and analysts. By studying these patterns and understanding their potential meanings, traders can gain insights into future price movements and make more informed trading decisions.

I am zero (rishi)

Here are a few more candlestick patterns that traders commonly use:

Morning star pattern: This pattern is formed by three candlesticks - a long red candlestick, followed by a short red or green candlestick that gaps down, and then a long green candlestick that gaps up and closes above the midpoint of the first candlestick's body. This pattern is considered a bullish reversal signal.

Evening star pattern: This pattern is the opposite of the morning star pattern and is formed by three candlesticks - a long green candlestick, followed by a short red or green candlestick that gaps up, and then a long red candlestick that gaps down and closes below the midpoint of the first candlestick's body. This pattern is considered a bearish reversal signal.

Harami pattern: This pattern consists of two candlesticks, where the first candlestick has a large body and the second candlestick has a smaller body that is completely contained within the body of the first candlestick. The harami pattern can be bullish or bearish depending on the direction of the trend.

Dark cloud cover pattern: This pattern is formed by two candlesticks - a long green candlestick followed by a long red candlestick that opens above the previous day's high and closes below the midpoint of the first candlestick's body. This pattern is considered a bearish reversal signal.

Piercing pattern: This pattern is formed by two candlesticks - a long red candlestick followed by a long green candlestick that opens below the previous day's low and closes above the midpoint of the first candlestick's body. This pattern is considered a bullish reversal signal.

These candlestick patterns can be used on their own or in combination with other technical indicators to analyze price movements and identify potential trading opportunities. However, it's important to note that candlestick patterns are not foolproof and should always be used in conjunction with other technical and fundamental analysis tools.

I am zero (rishi)

Sure, here are a few more common candlestick patterns:

Bullish and bearish harami cross patterns: These patterns are similar to the harami pattern but with smaller bodies on the second candlestick. The bullish harami cross pattern occurs when the second candlestick has a small body and is completely contained within the first candlestick's body, but its open and close prices are the same. The bearish harami cross pattern is the opposite, with a small body contained within the first candlestick's body but with the open and close prices being the same. These patterns indicate indecision in the market and a potential trend reversal.

Tweezer tops and bottoms patterns: These patterns are formed when two candlesticks have equal or nearly equal highs or lows, creating a "tweezer" shape. The tweezer tops pattern is formed when two or more candlesticks have the same high, while the tweezer bottoms pattern is formed when two or more candlesticks have the same low. These patterns indicate a potential reversal in the current trend.

Three white soldiers and three black crows patterns: These patterns are formed by three consecutive candlesticks of the same color, either green or red. The three white soldiers pattern occurs during a downtrend and signals a potential reversal to an uptrend, while the three black crows pattern occurs during an uptrend and signals a potential reversal to a downtrend.

Gravestone doji and dragonfly doji patterns: These patterns occur when the open and close prices are at the same level, but there is a long upper wick or shadow (for dragonfly doji) or a long lower wick or shadow (for gravestone doji). These patterns indicate a potential reversal in the current trend.

Traders often use these candlestick patterns in combination with other technical analysis tools to increase their chances of making successful trades. However, it's important to remember that no single indicator or pattern can predict market movements with complete accuracy, and traders should always use risk management strategies to protect their investments.

I am zero (rishi)

More about Candlestick pattern 

Sure, here are some additional details about candlestick patterns:

Candlestick patterns are a popular form of technical analysis used by traders to interpret price movements in financial markets. They are formed by the relationship between the open, high, low, and close prices of a given time period, such as a day or a week.

Each candlestick represents a specific time period and includes a body, which represents the difference between the opening and closing prices, and wicks or shadows, which represent the highest and lowest prices during that time period.

Candlestick patterns can be bullish or bearish, indicating a potential trend reversal in the market. Bullish patterns suggest that prices may rise in the near future, while bearish patterns suggest that prices may fall.

Some candlestick patterns are more reliable than others, and traders often use a combination of different patterns and other technical analysis tools to make trading decisions. It's important to note that no single indicator or pattern can predict market movements with complete accuracy, and traders should always use risk management strategies to protect their investments.

Candlestick patterns can be applied to a variety of financial instruments, including stocks, bonds, commodities, and cryptocurrencies. They can also be used in different timeframes, from short-term intraday trading to long-term position trading.

Learning to identify and interpret candlestick patterns can take time and practice, but it can be a valuable tool for traders looking to gain a better understanding of market trends and make more informed trading decisions.

I am zero (rishi)

How to read Candlestick 

Reading a candlestick involves analyzing the body and wicks/shadows of the candle to determine price movements over a given time period. Here's a step-by-step guide on how to read a candlestick:

Identify the time period represented by the candlestick: Each candlestick represents a specific time period, such as a day, an hour, or a minute.

Determine the color of the candlestick: A green or white candlestick indicates that the closing price was higher than the opening price, while a red or black candlestick indicates that the closing price was lower than the opening price.

Interpret the size of the candlestick body: The body of the candlestick represents the difference between the opening and closing prices. A long body indicates a significant price movement during the time period, while a short body indicates a small price movement.

Analyze the position of the wicks/shadows: The wicks/shadows represent the highest and lowest prices during the time period. If the wick/shadow at the top of the candlestick is long, it indicates that prices reached a high level before falling back down. If the wick/shadow at the bottom of the candlestick is long, it indicates that prices fell to a low level before recovering.

Look for patterns: Candlestick patterns are formed by the relationship between multiple candlesticks and can provide insight into market trends and potential price movements.

By analyzing candlesticks, traders can gain insight into market sentiment and make more informed trading decisions. It's important to note that candlestick analysis should be used in conjunction with other technical and fundamental analysis tools to confirm trading signals and minimize risk