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Candlestick Charts in detail - Part 3

Sangeeth Raghanathan

I will be sharing the basics of forex and also my experience in forex trading. If you want to try Forex but don't know where to start and whom to trust?, you are at the right place. I have been in that state and would be more than willing to help people.


 

 

Check out Part 1 and Part 2 of the Candlestick patterns before reading further.

Bullish Engulfing Pattern

Usually indicates reversal pattern when formed in a downtrend.

A small red candle (body) followed by a large Green (body) candle. Usually, the large green candle opens below the close or the low of the red candle and closes above the high or open of the red candle.

Bearish Engulfing pattern

Usually indicates reversal pattern when formed in a uptrend. A small green candle (body) followed by a large red (body) candle. Usually, the large red candle opens above the close or the high of the green candle and closes below the low or close of the green candle.

forex/stock/gold/oil


Tweezers Bottom and Tops

If two or more candles have the same bottom, especially in the downward pattern, it is a sign of reversal. - Tweezer Bottoms

If two or more candles have the same tops, especially in the upward pattern, it is a sign of reversal. - Tweezer Tops

forex/stock/gold/oil


Bullish Harami

If a large red candle is followed by a small green candle and if the green cande is entirely contained within the red candle then it is called bullish harami and indicates and possible bullish reversal if in downtrend or a continuation if in uptrend.

Bearish Harami

If a large green candle is followed by a small red candle and if the red candle is entirely contained within the green candle then it is called bearish harami and indicates and possible bearish reversal if in uptrend or a continuation if in downtrend.

forex/stock/gold/oil


Piercing lines

When a long red candle is followed by a long green candle, and the green candles open is below the red candles close, then it indicates a strong reversal signal to the upside.

Dark cloud cover

When a long green candle is followed by a long red candle, and the red candles opens is above the green candles close, then it indicates a strong reversal signal to the downside.

forex/stock/gold/oil


Morning star pattern

A long red candle followed by a small wider candle then a long green candle which closes above at least 50% of the first red candle's body. This indicates a strong bullish reversal if found in a down trend.

Evening star Pattern

A long green candle followed by a small wider candle then a long red candle which closes below at least 50% of the first green candle's body. This indicates a strong bearish reversal if found in an up trend.

forex/stock/gold/oil

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E-Mail: forextoddler@gmail.com
Website: http://www.forextoddler.com

This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our disclaimer.

 




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