32 Candlestick Pattern PDF Free

More Information About Book:

Name of Book32 Candlestick Pattern PDF Free
Name of Authorstoxmee
Language of BookEnglish
Size of Book1.3 MB
Total pages in Ebook60
Category of BookTechnical
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Introduction to Candlestick Patterns: Candlestick patterns play a crucial role in trading, providing valuable insights into price movements. These patterns are like a secret code on a chart, revealing potential market trends. Let’s delve into the basics:

  1. Components of a Candlestick:
    • Body: The thick part of a candle represents the difference between the opening and closing prices. A green (or black) body indicates price increase, while an empty (or white) body suggests a decline.
    • Shadows: Thin lines above and below the body show the highest and lowest prices during the time period.
    • Open and Close: Opening and closing prices determine the position of the body.
    • High and Low: Peaks and bottoms of the shadows represent the highest and lowest prices.
  2. Bullish and Bearish Candles:
    • Bullish Candles: Closing price higher than the opening price. Buyers are in control, signaling potential price increases.
    • Bearish Candles: Closing price lower than the opening price. Sellers dominate, indicating possible price declines.
  3. History of Candlestick Charting:
    • Originated over 200 years ago in Japan with rice traders.
    • Munehisa Homma pioneered candlestick charts, recognizing that emotions influenced price changes.
    • Steve Nison introduced these charts to the Western world.
  4. Why Candlestick Patterns Matter:
    • Quick snapshots of market sentiment.
    • Help traders make informed decisions.
    • Work across various trading frequencies.

Remember, understanding candlestick patterns enhances your trading skills and empowers you to navigate the market more effectively.

You can download the 32 Candlestick Pattern PDF through the link given below.

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How to Read Candlestick Charts?

Candlestick charts originated in Japan over a century before the West introduced bar charts and point-and-figure charts. In the 1700s, a Japanese individual named Homma recognized a correlation between rice price movements and the dynamics of supply and demand, attributing market fluctuations to traders’ emotions.

A daily candlestick chart displays a security’s open, high, low, and close prices for the day. The wide or rectangular part of the candlestick, known as the “real body,” illustrates the price range between the opening and closing prices. A filled, black, or red real body indicates a bearish candle, signaling that the closing price is lower than the opening price, suggesting that bears dominated the market by pushing prices down.

Conversely, an empty, white, or green real body represents a bullish candle, indicating that the closing price exceeded the opening price, suggesting that bulls controlled the market by driving prices higher. The thin vertical lines extending above and below the real body, termed wicks or shadows, depict the highest and lowest prices reached during the trading session.

The upper shadow shows the high price and lower shadow shows the low prices reached during the trading session.

Before we jump into learning about different candlestick charts, there are few assumptions which need to be kept in mind that are specific to the candlestick charts.

  1. Strength is represented by a bullish or green candle and weakness by a bearish or red candle. One should ensure that whenever they are buying it is a green candle day and whenever they are selling, ensure that it’s a red candle day.
  2. The textbook definition of a patterns states certain criteria, but one should state that there could be minor variations to the pattern depending on certain market conditions.
  3. One should look for a prior trend. If you are looking at a bullish reversal pattern, then the prior trend should be bearish and if you are looking for a bearish reversal pattern then the prior trend should be bullish.

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