Candlestick Charting

Similar to a bar chart, candlestick charts also display the open, close, daily high and daily low. The difference is the use of color.

 

bullish_pattern This is a bullish pattern - the stock opened at (or near) its low and closed near its high.
bullish_pattern The opposite of the pattern above, this is a bearish pattern. It indicates that the stock opened at (or near) its high and dropped substantially to close near its low.
bullish_pattern Known as "the hammer", this is a bullish pattern only if it occurs after the stock price has dropped for several days. A hammer is identified by a small body along with a large range. The theory is that this pattern can indicate that a reversal in the downtrend is in the works.
bullish_pattern Known as a "star", this pattern is used in other patterns such as the "doji star". For the most part, stars typically indicate a reversal and or indecision. There is a possibility that after seeing a star there will be a reversal or change in the current trend.

Keep in mind that there are over 20 other patterns used  in candlestick charting.   This is intended to give you an introduction to candlesticks.

 

 
Copyright 2005-2007 © Cy Group Trading

Trading Risk Disclosure | Directory