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Basics of Candlestick
Basics of Candlestick
Bearish Market
Red Candle:
− is formed when closing price is lower than the opening price
− signifies selling pressure
− Red Candle: Open-High-Low-Close (OHLC)
Parts of a Candlestick
Body: (colour filled) area between opening price and closing price
Wick/Shadow: point of the highest lowest price. (a thin line)
Upper Shadow/Wick: thin line attached above the body
4 kinds of price
Opening Price: the price at which a stock first trades upon the opening of
an exchange on a trading day.
Closing Price: the price at which a stock last trades before the closing of
an exchange of a trading day.
Highest Price:
Lowest Price:
Trend
1. Reversal Candlesticks Patterns
2. Continuation Candlesticks Patterns
3. Natural Candlesticks Patterns
Doji Candlestick
− Looks like plus (+) sign.
− Opening price = Closing price
− Means, price went high and low but finally closed with opening or
nearly to that.
− No body and no wick, natural
− It signifies the neutrality of the market.
− By itself it doesn’t signify any kind of trend. (But, combining with
next candle it can mean ….)
− It’s reality or effect depends upon next candle.
− Signifies the nearness of the change/reversal of a trend.
− Signifies the uncertainty of the market.
Doji Family:
1. Doji Star
2. Long Legged Doji
3. Gravestone Doji
4. Butterfly Doji
5. Four Price Doji
Doji Star
Condition: Doji Star + Green Candle
Action: Doji star ko high lai break garne green candle ma entry linuparxa.
Green candle ko low ma stop loss lagaunu parxa. jati tala aako thiyo tyeti
mathi janxa tyo trend
…
Doji Star + Red Candle
Action:
Doji
Long Legged Doji
Pressure:
Trend it indicates: starting of bearish trend
Action to take: Sell (if it forms at the resistance level)
Stop Loss
is to avoid big loss in the trade.
Long green + gravestone doji(L) + red candle ….. (bearish trend starts)
Hanging Man:
2x (long) lower wick/shadow
Means, strong rejection of buying/bearish
Indicates, future bearish trend