Four continuous candlesticks pattern every trader must to know

 

What is Candlesticks patterns -

Candlesticks patterns are used to predict the future direction of price movement. The most 16 common candlesticks patterns and use of them to identify the opportunities while trading.

What is the candlestick

A candlestick is a way to display the information about an asset’s price movement. It is one of the most popular components of technical analysis and to catch the price action on the movement.

 

The candlesticks have three basic features :

•   The body, which represents the open-to-close range
•   The wick. Or shadow, that indicates the intraday high and low
•  The colour, which reveals the direction of stock movement basically green body indicates a price increase and red body shows a price decrease.

 Before you start trading, its important to familiarize yourself with the basics of candlestick and the only way to understand is “PRACTISE READING CANDLESTICK PATTERNS”.

The best way to learn to read candlestick patterns is to practice entering and exiting trades from the signals they give. You can develop your skills in Demat – trading account, you may open by clicking below :

 https://zerodha.com/?c=AY8398&s=CONSOLE

Four continuous candlesticks pattern

Doji

When a markets open and close are almost at the same price point the candlestick resembles a cross or plus sign – traders should look out for a short to non-existent body, with wicks of varying length.

This doji pattern indicate a struggle between buyer and seller. Alone doji is neutral signal but it can be found in reversal patterns such as the bullish morning and bearish evening star.

It formed like –

 

Spinning top

The spinning top candlestick pattern has a short body cantered between wicks of equal length. The pattern indicates indecision in the market resulting in no meaningful change in price: the bulls sent the price higher while the bears pushed it low again. It signifies that the current market pressure is losing control.

It formed like –

 

 Falling three methods

Three method formation patterns are used to predict the continuation of a current trend be it bearish or bullish.

The bearish pattern is called the “ falling three methods”. It indicate traders that bull do not have enough strength to reverse the trend.

It formed like –

 

Rising three methods

The opposite is true for the bullish pattern called the “Rising three methods”. It comprises of three short red candles within the range of two long greens.

The pattern shows traders that, despite some selling pressure, buyer are retaining control of the market.

 

It formed like –