In this post, we are going to tell you about Candlestick Patterns Candlestick Basics, Originally used by 17th-century rice traders in Japan, today Candlestick Patterns Charts are used by traders and investors around the world to trade in securities.
Types of Candlestick Patterns
Popular single Candlestick Patterns
-Bullish Maribozu -Bearish Maribozu
Originally used by 17th century rice traders in Japan, today Candlestick Charts are used by traders and investors around the world to trade in securities.
If you are about to start your trading journey then the first thing you need to learn is how to use candlestick charts.
A candlestick is a type of price chart used in technical analysis that displays the opening, high, low, and closing prices of a security for a specific period. Such a chart is visually very appealing and very informative. It indicates the current as well as the past behavior of market participants. Hence it is used by most of the traders across the world.
What is Candlestick Patterns Candlestick Basics
As shown in figure below a candlestick chart consists of a series of candles, with each candle representing the trading pattern of each trading period which can be a trading day, week or month, depending on the time frame of the chart
Patterns formed by a single candle or grouping of two or more candles in a certain sequence are known Candlestick Patterns. Such patterns help a trader to study the past and current price movement of the security to spot trend reversals or trend continuations and hence traders use these candlesticks patterns to identify trading opportunities.
Candlestick Patterns reflect what buyers and sellers are doing and hence it is important to study them.
Before we proceed further, first let us understand the basic candle formation.
As shown in the figure above, a candle shows the high, low open and close price of a security for a specific period.
Candles can be of two types – Bullish or Bearish.
- Bullish Candle-
When the close price is higher than the open price, then such a candle is known as a bullish candle. The central part of such a candle is filled with white or green colour.