FOR GOLD TRADING BY SEEING XAUUSD(OANDA) FOR DRAWING SUPPORT AND RESISTANCE AND

TRENDLINES AND THEN PLACE BUY OR SELL IN GOLDMINI FUTURES IN MCX :

TO CAPTURE MAJOR SWINGS

---------------------------------------------------------

A)4HR TIME FRAME FOR DRAWING SUPPORT AND RESISTANCE AND TRENDLINES &

1HR TIME FRAME FOR SEEING ENTRY OR EXIT BASED ON REVERSAL OR BREAKOUT CANDLES.

TO CAPTURE MINOR SWINGS

----------------------------------------------------------

B)1 HR TIME FRAME FOR DRAWING SUPPORT AND RESISTANCE AND TRENDLINES &

15 MINS TIME FRAME FOR SEEING ENTRY OR EXIT BASED ON REVERSAL OR BREAKOUT CANDLES.

ALWAYS TRADE IN THE DIRECTION OF WHAT TREND STOCK IS IN CURRENTLY FOR THE TIME FRAME
i.e.USED FOR DRAWING SUPPORT AND RESISTANCE I.E FOR CAPTURING MAJOR SWING WE USE 4
HOUR TIME FRAME SO IN 4 HOUR TIME FRAME CHART SEE WHAT TREND IS THERE BY CHECKING
HIGHER HIGH HIGHER LOWS OR LOWER HIGH -LOWER LOWS WHETHER IT IS IN UPTREND OR
DOWNTREND . IF SUPPOSE STOCK IS IN UPTREND.CONSIDER TAKING LONG . BUT IF YOU WANT TO
TAKE SHORT IF IT IS MAKING HIGHER HIGH-HIGHER LOWS SEE IF ANY REVERSAL CHART PATTERN IS
BROKEN AT THE POINT OF ENTRY.

TRENDLINES

----------------------------

TRENDLINES ARE DRAWN BY CONNECTING HIGHER HIGH AND HIGHER LOWS FOR UPTREND SO
ALWAYS CONNECT THE WICK FOR THE FIRST POINT FOR DRAWING TRENDLINES THEN FOR OTHER
POINTS JOINING YOU MAY CONNECT USING WICK OR CANDLE CLOSE OR PASSING THROUGH WICK
SO THAT TRENDLINE ARE CONNECTING MAXIMUM POINTS.

TRENDLINES ARE CONNECTED SO THAT OUTER MOST SWING HIGHS ARE TOUCHED FOR UPTREND
LINE WITHIN THE CHART AND ANOTHER TRENDLINE IS ALSO SAME LINE POINTS ARE
CONNECTED(COHERENT PATTERN POINTS ARE CONNECTED FOR MAKING TRENDLINE)

LINE RESISTANCE

---------------------------

A BIG LINE SWING HIGH I.E INITIATING WHICH IS DISCONTINUED FROM REST OF THE CHART ACTS AS
A RESISTANCE

EXACTLY OPPOSITE FOR LINE SUPPORT

BIG RESISTANCE

A SINGLE MOST MAJOR SWING HIGH CAN ITSELF ACT AS A RESISTANCE

RESISTANCE

MINIMUM 2 COMMON MEDIUM TO HIGH SWING HIGH CAN ACT AS RESISTANCE

NOTE : JOIN RESISTANCE CONNECTING MAXIMUM POINTS AND IT SHOULD BE MEANINGFUL YOU
CAN CONNECT BOTH WICK AND BODY

A SWING HIGH IS OK FOR RESISTANCE ONLY IF ANY CANDLE DOESN’T CUT THE SWING HIGH MORE
THAN 2-3 TIMES FOR CURRENT TRADING TIME CONSIDERED.

FOR BREAKOUT OF RESISTANCE SEE IF MEDIUM OR BIG GREEN CANDLE IS BREAKING AND BREAKING
CANDLE SHOULD BE BROKREN SUCH A WAY THAT AFTER RESISTANCE LINE THE CANDLE BODY
SHOULD BE MORE OUTSIDE THE TOP OF THE RESISTANCE LINE.(MORE BODY AND LESS WICK
SHOULD BE AFTER BREAKING OF RESISTANCE FOR THE BREAKOUT CANDLE) AND ALSO SEE IF THERE
IS SURGE IN VOLUME FOR BREAKOUT CANDLE

BREAKOUTI.E (ENTRY EXIT(SHOULD BE ALWAYS SEEN IN MINOR TIME FRAME.

Powerful Candlestick Patterns: A Complete Trading Guide for Beginner Traders

Candlesticks consist of the open, high, low and close prices for a specific period. The thick
rectangular ‘body‘ represents the range between open and close. The thin ‘wicks‘ or ‘shadows’
reresent highs and lows. The coloring of the body conveys whether close was higher than the open,
which is often indicated by green or white, and if close is lower than the open, it is represented by
red or black.

Candlestick patterns fall into different categories that signal potential market movements.
Bullish reversal patterns indicates shift from downward to upward momentum while bearish
reversals indicates shift from upward to downward momentum.
Continuation patterns suggest the prior trend is likely to continue, whether bullish or bearish.
Indecision patterns means there is struggle between buyers and sellers and often comes before trend
reversals.

Bullish Reversal Patterns: Bullish reversal patterns in candlestick charts indicate a potential change
from an downtrend to an uptrend, suggesting that buyers are to dominate the market. Let’s move
into the top 12 popularly used bullish reversal patterns in candlestick chart.

1. Bullish Engulfing

A bullish engulfing pattern when made at support. In bullish engulfing pattern

1st candle : short to medium red candle

2nd candle :long green candle and 2nd green candle body totally engulfs 1st candle body.(AND
WICKS compulsarily)

IT GIVES MORE WEIGHTAGE IF SHADOWS OF FIRST CANDLE TO BE IN THE LOW TO HIGH RANGE OF
SECOND CANDLE

The first candle shouldn’t be a doji

2. Bullish Harami

The bullish harami candlestick pattern is a two-candle pattern. Harami means pregnant in Japanese.
Formed in a downtrend or near a support

1st candle : long red candle

2nd candle : small green candle open above the close of first candle and second candle actually opens
in the body of the first candle result is second candle is a small candle.it’s a spinning top with small
wicks the size wicks are not usually important but it is better to be small whatever the size of
shadows.whatever the size of shadows they must be inside the body of the first candle.

3. Morning Star

The morning star candlestick pattern is a bullish reversal pattern it is made up of three candles. The
first candle is a big red candle. The second candle is a small candle(color doesn’t matter), spinning
top which shows the indecision and also shows that the sellers are getting weak. The third candle is
a long green candle which changes the trend.

This candlestick pattern is a strong indication of the potential trend reversal. Traders use this pattern
to set up stop losses below the doji(/spinning top or the bullish candle.

1st candle : long red candle

2nd candle (colour doesn’t matter): 2nd candle opens below the closing of the 1st candle

3rd candle: long green candle which opens with a gap above 2nd candle but not necessary.

4. Morning Star Doji

Same as morning star pattern except 2nd candle is a doji instead of a spinning top.

5. Piercing Line

The piercing line candlestick pattern is a bullish reversal pattern

1st candle :red candle

2nd candle:green candle open below 1st candle close or ideally below 1st candle low and 2nd candle
closes above 50 percent of first candl

Both 1st and 2nd candle are fairly long candles with small or non existent wicks. The greater the green
candle closes above first candle that much is the power of this pattern.

6. Hammer

A hammer candlestick pattern is a single candlestick pattern that shows a potential reversal of the
lbullish trend.
Hammer should have body and wick which is double the size of body.

7. Inverted Hammer

The inverted hammer candlestick pattern is a single candle pattern that is formed after a
downtrend. The inverted hammer has same properties of the hammer candlestick pattern, but that
is ulta of hammer
.

Bearish Reversal Patterns: Bearish reversal patterns in candlestick charts indicate a potential shift
from an uptrend to a downtrend, suggesting that sellers are starting to dominate the market.
Examples include the Shooting Star, Bearish Engulfing, and Evening Star patterns, each defined by
distinct formations that traders use to predict a possible market decline. Let’s learn 13 bearish
reversal patterns.

1. Bearish Engulfing

1st candle : short to medium green candle

2nd candle :long red candle body whose body totally engulfs body of first candle

Ideal situation is body of second candle totally engulfs shadow of first candle also

First candle shouldn’t be a doji

2. Bearish Harami

The bearish harami pattern is a strong bearish signal.

1st candle : long green candle

2nd candle : small red candle open below the close of first candle and second candle actually opens in
the body of the first candle result is second candle is a small candle.it’s a spinning top with small
wicks the size wicks are not usually important but it is better to be small whatever the size of
shadows.whatever the size of shadows they must be inside the body of the first candle.

3. Evening Star

An evening star candlestick pattern is a bearish reversal pattern.

1st candle : long green candle

2nd candle : small candle opens above closing of first candle

3rd candle : long red candle that crosses below than 50 % of first green candle

Third candle opens with gap below 2nd candle close but this is not a necessity for pattern to work

4. Evening Star Doji

Evening star doji is same as evening star except 2nd candle is a doji
4. Hanging Man

The hanging man candlestick pattern is a bearish trend reversal pattern.

Body is at the top and long wick is at the bottom. The body is small and wick is double the size of
body, while the upper side has minimum to no wick.

The hanging man pattern forms when the market is in an uptrend, The hanging man pattern is
considered a bearish reversal .
23. Dark Cloud Cover

The dark cloud cover candlestick pattern is a bearish trend reversal pattern.

Both candle have small shadows or no shadows with longer shadows the pattern can be effective but
with not very long shadows

1st candle: long green candle

2nd candle: long red candle opens above first candle close or ideally above first candle high

24. Shooting Star

The shooting star candlestick pattern is a single candlestick bearish reversal pattern. Shooting star is
formed with a single candle which has a long wick at the top and a small body at the bottom. The
shooting star pattern is confirmed after a strong bearish candle follows the shooting star candle.
25. Three Black Crows

The three black crows pattern is formed at the top of the price chart right after a bullish rally.

1st candle : long red candle

2nd candle: A long red candle the 2nd candle opens above first candle close and 2nd candle closes
below first candle close

3rd candle : 3rd candle opens above 2nd candle close and 3rd candle closes below 2nd candle close

This pattern indicates a potential reversal of the uptrend.

------------------------------------------------------------------------------------------------------------

Inside Bars

The Inside Bar pattern is a candlestick formation that occurs when a smaller candle is completely
contained within the high and low range of the previous candle. This pattern indicates a period of
consolidation or indecision in the market, Inside Bars are often seen as potential signals for a
breakout, in whichever direction breakout happens that side market will move.

31. Three White Soldiers

The three white soldiers candlestick pattern is formed when the market makes three consecutive
bullish candles with higher closes. The three white soldiers pattern is formed at the bottom of the
price chart after a bearish rally.
The three white soldiers pattern is formed when the market experiences a significant shift in
sentiment from bearish to bullish. The initial bearish decline in three white soldiers creates a sense
of pessimism among investors, but the next three consecutive bullish candles with higher closes
suggest that the bulls have taken control of the market. This pattern indicates a potential reversal of
the downtrend.

32. Marubozu

There is both a bullish marubozu and bearish marubozu.

In bullish marubozu

, High = Close and Low = Open.

Conversely, a bearish marubozu pattern, where the candle opens at the high and closes at the low
without any wicks, suggests that the sellers have been in control, pushing the price lower. During this
session, High = Open and Low = Close.

----------------------------------------------------------------------

Indecision Patterns: Indecision patterns in candlestick charts indicate uncertainty in the market,
where neither buyers nor sellers have a clear advantage. Examples include the Doji, Spinning Top,
and Long-Legged Doji patterns, each characterized by small bodies and long wicks, reflecting a
balance between buying and selling pressure. Let’s learn about 8 indecision patterns.

33. Doji

The doji candlestick pattern is characterised by the price of a stock opening and closing at nearly the
same level. Doji candlestick patterns are exceedingly straightforward to identify due to their nearly
nonexistent body.

The doji pattern is formed when the market is in a state of indecision, with neither bulls nor the
bears able to gain a clear upper hand. resulting in a candlestick with an extremely small or
nonexistent body. This pattern suggests a potential shift in market sentiment and a possible reversal
in the immediate future.

34. Gravestone Doji

Gravestone doji candlestick pattern indicates a potential bearish trend reversal. Gravestone doji is
generally formed at the top of the price chart. Traders interpret this pattern as a sign to take a
bearish trade in the underlying stock.

The gravestone doji pattern is formed after an uptrend followed by a sudden rejection of the higher
prices. The opening and closing prices being nearly identical, with a long upper wick and no lower
wick, This pattern signals a potential shift in market sentiment from bullish to bearish.

35. Dragonfly Doji

Dragonfly doji candlestick pattern indicates a potential bullish trend reversal. Traders interpret this
pattern as a signal to take a bullish trade in the stock.
The dragonfly doji pattern is formed after a strong bearish momentum followed by a sudden
rejection of the lower prices. The opening and closing prices being nearly identical, with a long lower
wick and no upper wick in dragon fly doji. This pattern signals a potential shift in market sentiment
from bearish to bullish.

36. Long Legged Doji

A long legged doji pattern resembles the indecision between the market participants. A long legged
doji pattern can form at the top of the chart as well as the bottom of the chart.
The long-legged doji pattern is created when the open and close prices are same

, but the asset experiences a wide trading range during the session. This shows that the bulls and
bears were in a state of equilibrium, unable to establish a clear direction for the market. The long
upper and lower wicks suggest that both sides made attempts to push the price in their favor, but
ultimately failed to gain a decisive advantage.
strong shift from bullish to bearish sentiment. It suggests that the previous bullish momentum is
weakening, potentially indicating a reversal.

How to Identify Candlestick Patterns?

To accurately identify candlestick patterns, we need to understand 4 parameters. First, we need to

understand the psychology behind candlestick formation. Second, we should choose the right
timeframe. Third, we look at the price chart to look for patterns. Fourth, we use technical indicators
for confirmation.

Here, in this video about candlestick patterns, our expert Shivam Gaba explains how to scan
candlesticks using Strike.

How Many Types of Candlestick Patterns are there?

There are about 40 main types of candlestick patterns there. Below are details about them all.

Candlestick Pattern Signal Description

A larger bullish candle engulfs

Bullish
Bullish Engulfing a smaller bearish candle,
Reversal
indicating a reversal.

A small bullish candle within

Bullish
Bullish Harami the range of a previous larger
Reversal
bearish candle.

Tweezer Bottom Bullish Two or more candles with

 matching lows, signaling
Reversal
strong support.

A three-candle pattern with a

Bullish
Morning Star bearish, a small-bodied, and a
Reversal
bullish candle.

Similar to Morning Star, but

Bullish
Morning Star Doji the middle candle is a Doji,
Reversal
indicating indecision.

A Doji that gaps below a

Bullish bearish candle and a bullish
Bullish Abandoned Baby
Reversal candle that gap ups after the
doji.

A bearish candle followed by a

Bullish
Three Outside Up bullish candle that engulfs it,
Reversal
and another bullish candle.

A bearish candle, followed by

Bullish a bullish candle within the
Three Inside Up
Reversal first, and another bullish
candle.

A gap between a bearish and a

Bullish
Bullish Kicker bullish marubozu, indicating a
Reversal
strong reversal.

A long bearish candle followed

by a bullish candle that opens
Bullish
Piercing Line below the close of the bearish
Reversal
candle and closes above the
midpoint of the first.

A small body at the top with a

Bullish
Hammer long lower shadow, appearing
Reversal
at the bottom of a downtrend.

Inverted Hammer Bullish A small body at the bottom

Reversal with a long upper shadow,
appearing at the bottom of a
 downtrend.

A larger bearish candle engulfs

Bearish
Bearish Engulfing a smaller bullish candle,
Reversal
indicating a reversal.

A small bearish candle within

Bearish
Bearish Harami the range of a previous larger
Reversal
bullish candle.

Two or more candles with

Bearish
Tweezer Top matching highs, signaling
Reversal
strong resistance.

A three-candle pattern with a

Bearish
Evening Star bullish, a small-bodied, and a
Reversal
bearish candle.

Similar to Evening Star, but the

Bearish
Evening Star Doji middle candle is a Doji,
Reversal
indicating indecision.

A Doji that gaps above a

Bearish Abandoned Bearish bullish candle and the bearish
Baby Reversal candle that opens with a gap
down after the doji.

A bullish candle followed by a

Bearish
Three Outside Down bearish candle that engulfs it,
Reversal
and another bearish candle.

A bullish candle, followed by a

Bearish
Three Inside Down bearish candle within the first,
Reversal
and another bearish candle.

A small body at the top with a

Bearish
Hanging Man long lower shadow, appearing
Reversal
at the top of an uptrend.

A gap between a bullish and a

Bearish
Bearish Kicker bearish marubozu, indicating a
Reversal
strong reversal.
 A long bullish candle followed
by a bearish candle which
Bearish
Dark Cloud Cover opens with a gap up and
Reversal
closes below the midpoint of
the first.

A small body at the bottom

Bearish with a long upper shadow,
Shooting Star
Reversal appearing at the top of an
uptrend.

Three consecutive long

Bearish bearish candles with small
Three Black Crows
Reversal wicks, indicating strong selling
pressure.

A long bullish candle, three

Bullish
Rising Three smaller bearish candles, and
Continuation
another bullish candle.

A long bearish candle, three

Bearish
Falling Three smaller bullish candles, and
Continuation
another bearish candle.

A gap followed by a candle in

Tasuki Gap Continuation the same direction, indicating
continuation.

A long candle, three smaller

opposite candles, and another
Mat Hold Continuation
long candle in the original
direction.

A smaller candle within the

range of a previous larger
Inside Bars Continuation
candle, indicating
consolidation.

Three consecutive long bullish

Bullish candles with small wicks,
Three White Soldiers
Continuation indicating strong buying
pressure.
 A long candle with no wicks,
Marubozu Continuation indicating strong momentum
in the direction of the candle.

A candle with a small body

Doji Indecision and long wicks, indicating
indecision in the market.

A Doji with a long upper

Gravestone Doji Indecision shadow, indicating potential
reversal at the top.

A Doji with a long lower

Dragonfly Doji Indecision shadow, indicating potential
reversal at the bottom.

A Doji with long wicks on both

Long Legged Doji Indecision sides, indicating high volatility
and indecision.

A small-bodied candle with

Bullish Spinning Top Indecision wicks on both sides, indicating
indecision.

A small-bodied candle with

Bearish Spinning Top Indecision wicks on both sides, indicating
indecision.

Three consecutive Doji

Tri-Star Indecision candles, indicating a strong
potential reversal.

Candles with long wicks,

Long Wicks Indecision indicating rejection of higher
or lower prices.