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Candlestick and Chart Pattern Guide

The document provides an overview of candlestick charts used in financial markets, detailing the anatomy of a candle, including its body and wicks. It describes various candlestick patterns such as Doji, Hammer, and Bullish Engulfing, along with their implications and recommended actions. Additionally, it introduces the Cup and Handle chart pattern as a bullish continuation signal.

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14 views1 page

Candlestick and Chart Pattern Guide

The document provides an overview of candlestick charts used in financial markets, detailing the anatomy of a candle, including its body and wicks. It describes various candlestick patterns such as Doji, Hammer, and Bullish Engulfing, along with their implications and recommended actions. Additionally, it introduces the Cup and Handle chart pattern as a bullish continuation signal.

Uploaded by

xagoh45899
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Candlestick and Chart Pattern Guide

Introduction to Candlestick Charts

Candlestick charts are a popular way to view price action in financial markets. Each candlestick shows the

opening, closing, high, and low prices for a specific time period.

Anatomy of a Candle

Each candle has a body and wicks (also called shadows). The body shows the opening and closing prices,

while the wicks show the highs and lows.

Doji Pattern

A Doji forms when the open and close prices are nearly equal. It indicates indecision in the market.

Action: Wait for confirmation from the next candle.

Hammer Pattern

A Hammer is a bullish reversal pattern that forms after a downtrend. It has a small body and a long lower

wick.

Action: Buy if next candle confirms upward movement.

Bullish Engulfing

Occurs when a small red candle is followed by a large green candle that completely engulfs it.

Action: Buy signal, especially after a downtrend.

Chart Patterns: Cup and Handle

The Cup and Handle pattern is a bullish continuation pattern. The cup looks like a U and the handle has a

slight downward drift.

Action: Buy after breakout above the handle.

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