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Candlestick Patterns - PDF

The document discusses various candlestick patterns and their meanings for determining market trends. It notes that doji and spinning patterns do not necessarily signal price reversals but rather signify the end of a sustained trend. Dark cloud cover and piercing patterns are also examined, with dark cloud cover needing the second candle to close below 50% of the previous candle, while piercing patterns require a close above 50% to be considered more bullish. Confirmation from additional indicators is recommended before taking any positions based on candlestick patterns alone.

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Udit Divyanshu
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
2K views

Candlestick Patterns - PDF

The document discusses various candlestick patterns and their meanings for determining market trends. It notes that doji and spinning patterns do not necessarily signal price reversals but rather signify the end of a sustained trend. Dark cloud cover and piercing patterns are also examined, with dark cloud cover needing the second candle to close below 50% of the previous candle, while piercing patterns require a close above 50% to be considered more bullish. Confirmation from additional indicators is recommended before taking any positions based on candlestick patterns alone.

Uploaded by

Udit Divyanshu
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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High

Close

Open

Low
More Bearish Less Bearish More Bullish Less Bullish
Note:
Doji & Spinning Patterns are
not necessarily price reversal
they signifies end of a
sustained trend so refrain from
taking new positions on the
base of them and book profits
immediately.
If new positions are taken, make sure to have a strict stoploss
Note:
It is a two candle pattern.
After a downtrend a red
candle is formed & following
that a green candle is formed
it is necessary for the both of
the candles to have similar
bottoms. Make sure to make
entry after confirmation.
Note:
Opening of second
candle should be
below the closing of
the previous candle.

Whole body should be


engulfed & it should
be formed after a
downmove
Note:
Opening of second
candle should be above
closing of previous

Patterns are less


reliable during
consolidation, so
upmove must be there
earlier
Piercing Pattern
Second candle must close above 50% of
previous candle

Dark Cloud Cover


Second Candle must close
below 50% of previous candle
Note:
It is a three candlestick pattern.

It is considered more bullish if 3rd


candle closes above 50 % of the
red candle (1st candle).
Note:
Similarly it is considered less
more bearish if 3rd candle gives a
close below the 50% of the
bullish candle (1st candle).

Points to Remember
Confirmation should come
within next 2-3 candles of any
candlestick pattern.

Confirm the trend before using


any candlestick pattern.

Make sure to take multiple


confirmation from other
indicators before entering a trade
and also consider other factors.

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