15 Money Making Candle Formations
Candlestick Line
Candlestick lines and charts -- tra- ditional Japanese charts whose individual lines look like candles, hence their name. The candle- stick line is comprised of a real body and shadows. See "Real body" and "shadow."
Belt Hold Lines
Belt-hold line -- there are bullish and bear- ish belt holds. A bullish belt hold is a tall white candlestick that opens on its low. It is also called a white opening shaven bottom. At a low price area, this is a bullish signal. A bearish belt hold is a long black candlestick which opens on its high. Also referred to as a black opening shaven head. At a high price level, it is considered bearish.
Counterattack Lines
Counterattack lines -- following a black (white) candlestick in a downtrend (up- trend), the market gaps sharply lower (higher) on the opening and then closes unchangedfromthepriorsession'sclose. A pattern which reflects a stalemate be- tween the bulls and bears.
Dark-Cloud Cover
Dark-cloud cover -- a bearish reversal sig- nal. In an uptrend a long white candlestick is followed by a black candlestick that opens above the prior white candlestick's high. It then closes well into the white candlestick's real body.
Long Grave- Legged Stone
Doji --a session in which the open and close are the same (or almost the same). There are different varieties of doji lines (such as a gravestone or long-legged doji) depending on where the opening and closing are in relation to the entire range. Doji lines are among the most important individual candle- stick lines. They are also components of important candlestick patterns.
Engulfing Patterns
Engulfing patterns -- there is a bullish and bearish engulfing pattern. A bullish engulfing pattern is comprised of a large whie real body which engulfs a small black real body in a down- trend. The bullish engulfing pattern is an impor- tant bottom reversal. A bearish engulfing pattern (a major top reversal pattern), occurs when sell- ing pressure overwhelms buying pressure as refleccted by a long black real body engulfing a small white real body in an uptrend.
Doji Star
Doji star -- a doji line which gaps from a long white or black candlestick. An important reversal pattern with confir- mation during the next session.
Evening Star
Evening star -- a major top reversal pattern formed by three candlesticks. The first is a tall white real body, the second is a small real body (white or black) which gaps higher to form a star, the third is a black candlestick which closes well into the first session's white real body.