More controversial is the Hanging Man formation. Is a reversal signal if it appears after a down-trend. The Piercing Line is the opposite of the Dark Cloud pattern and Reversal signal, warning of "rainy days" ahead. Dark CloudĪ Dark Cloud pattern encountered after an up-trend is a The second candlestick must be contained within the body of the first, though Harami means 'pregnant' which is quite descriptive. Harami candlesticks indicate loss of momentum and potential reversal after a strong trend. Harami formations, on the other hand, signal indecision. Or gravestone patterns and signal reversal Engulfing CandlesticksĮngulfing patterns are the simplest reversal signals, where the body of the secondĬandlestick 'engulfs' the first. How one candlestick relates to another will often indicate whether a trend is likely to continue or reverse, or it can signal indecision, when the market has no clear direction. The candlestick is the converse of a hammer and signals reversal when it Of the candlestick should be at least twice the height of the body.Ī gravestone is identified by open and close near the bottom of the trading The same color as the previous day, if the open is equal to.
Red and blue/green to indicate filled or hollow candlesticks: Refer to a candlestick as having a tall shadow or a long tail.įor improved presentation, Incredible Charts uses colors such as The shadow is the portion of the trading range outside of the body. Weakness and reversal signals that may not be apparent on a normal bar chart. The advantage of candlestick charts is the ability to highlight trend If the open is higher than the close - the candlestick mid-section is.If the close is higher than the open - the candlestick mid-section is.Mid-section represents the opening and closing prices for the period. The range of prices traded during the period (high to low) while the broad Relationship between opening and closing prices. Candlesticks contain the same data as a normal bar chart but highlight the
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