WHAT IS CANDLESTICK ?
BASICALLY, CANDLESTICK IS USED TO IDENTIFY THE OPEN, CLOSE, HIGH, AND LOW VALUE
FOR SOME PERIOD OF TIME
CANDLESTICK WAS FOUND IN 18th CENTURY BY THE JAPANESE RICE MERCHANTS TO
CALCULATE AND IDENTIFY THE MARKET PRICE , AND AFTER SOME YEARS THE TERM
CANDLESTICK WAS FAMOUS AND WIDELY IN THE UNITED STATES OF AMERICA [USA]
CANDLESTICK IS USED TO TRACK THE PRICE, ANALYZE THE MARKET BY COMPARING THE
CANDLESTICK PATTERN OF PREVIOUS YEAR OR MONTH OR WEEK
BASIC OF A CANDLESTICK
FIRST, THE CANDLESTICK IS COMPOSED OF THREE STRUCTURES
UPPER SHADOW 2) LOWER SHADOW 3) BODY
THE UPPER SHADOW WILL REPRESENT THE HIGH , AND THE LOWER SHADOW REPRESENT THE
LOW AND THE BODY IS USUALLY IN RED OR GREEN COLOUR
BODY:
THE RED COLOUR OF THE BODY DENOTES THE PRICE IS IN NEGATIVE (DECREASING) POSITION
OVER A PERIOD OF TIME
THE GREEN COLOUR OF THE BODY DENOTES THE PRICE IS POSITIVE(INCREASING)POSITION
OVER A PERIOD OF TIME
(PLEASE LOOK INTO THE NEXT SLIDE FOR BETTER UNDERSTANDING)
TYPES OF CANDLESTICK
HAMMER CANDLESTICK:
● IT WAS THE MOST FOLLOWED CANDLESTICK PATTERN. THIS CANDLESTICK INDICATES THE
VERY LOWER BOTTOM , AND IT HAS THE LOWER SHADOW ATLEAST TWICE SIZE OF THE
BODY
● THE SHAPE OF THE CANDLESTICK IS LIKE THE ALPHABET “ T “
● IT MOSTLY OCCURS AFTER A DECLINE IN A PRICE
● HAMMER CANDLESTICK INDICATES THAT THERE IS A CHANCE FOR A UPSIDE MOMENTUM
IN A MARKET
IMAGE OF HAMMER CANDLESTICK
DARK CLOUD COVER CANDLESTICK
● DARK CLOUD COVER CANDLESTICK IS A BEARISH REVERSAL CANDLESTICK WHICH WILL
INDICATE THE DOWNTREND
● IT CAN BE IDENTIFIED BY , WHERE THE DOWN CANDLE OPEN ABOVE THE CLOSE OF THE
PREVIOUS UP CANDLE
● AND AFTER THE DOWN TREND IT WILL CLOSE BELOW THE CENTRE BECAUSE OF SOME
BULLISH CANDLE
IMAGE OF DARK CLOUD COVER IMAGE
DOJI CANDLESTICK
● THE DOJI CANDLESTICK PATTERN CAN BE BULLISH OR CAN BE BEARISH , AND IT IS DEPEND
UPON THE THE PREVIOUS CANDLES
● IF THE PREVIOUS CANDLES ARE BULLISH BEFORE THE FORMATION OF THE DOJI, IT WILL
BE THE BEARISH PATTERN
● IF THE PREVIOUS CANDLES ARE BEARISH BEFORE THE FORMATION OF DOJI, IT WILL BE
THE BULLISH PATTERN
● DOJI CANDLESTICK HAS THE SAME OPEN AND CLOSE PRICES FOLLOWING BY A LONG
SHADOW
IMAGE OF DOJI CANDLESTICK
SHOOTING STAR CANDLESTICK
● SHOOTING STAR CANDLESTICK IS THE BEARISH CANDLESTICK WITH A LONG UPPER
SHADOW, AND A SMALL BODY
● IT WILL LOOK LIKE OPPOSITE SIDE OF HAMMER CANDLESTICK
● SHOOTING STAR CANDLESTICK OCCURS MOSTLY AFTER A UPTREND
● THIS TYPE OF CANDLESTICK IS MORE EFFECTIVE WHEN IT FORMS THREE OR MORE GREEN
CANDLES CONTINUOUSLY
DIAGRAM OF SHOOTING STAR CANDLESTICK
