Candlestick by Sanstocktrader

JAPANESE CANDLESTICK
CANDLESTICK
• Candlestick offer best visual representation of market participant’s
activity
• Each Candlestick represent different psychology of market
participant
• Best tool to identify Trend strength ( Candle Body ) – Bigger is Candle
body stronger is Trend
• Can spot reversal at very crucial point ( Candle Wick ) – Longer is
wick higher is chance of reversal in opposite side of wick
• Candle high and low offer best Entry ,SL & Target level for almost all
strategy ( I called them Confirmation Candle )
• Can spot consolidation zone @sanstocktrader
BULLISH & BEARISH CANDLES
GREEN candles are bull bars, and RED candles are bear bars
Marubozu Candle
• No or extremely small upper and lower shadow
• Bullish Marubozu: Open =Low and Close =High ( Most Bullish Candle )
• Bearish Marubozu: Open =High and Close = Low ( Most Bearish Candle )
@sanstocktrader
• Take away from Candle stick analysis:
• Bigger the candle’s real body stronger is Trend
- Big bullish real body candle represents Buyers are aggressive
- Big bearish real body candle represents Sellers are aggressive
• Smaller candle real body represents indecision between Buyers
and Sellers
• Long Upper shadow represents Selling from higher level by smart
money
• Long Lower shadow represents Buying from Lower level by smart
money
@sanstocktrader
Marubozu Reversal Candle
Bearish Marabozu hourly candle
@sanstocktrader
Hammer Bullish Reversal Candle
• Small Real body with long lower shadow ( Minimum 2 times of Real body
range )
• Little or no upper shadow @sanstocktrader
• Appear after significant down trend
• One of strongest reversal candle
if appear on Weekly chart
( My favourite one )
Hammer Bullish Reversal Candle
@sanstocktrader
Bullish Hammer Reversal candle

Hanging Man Bearish Reversal Candle
• Small Real body with long lower shadow ( Minimum 2 times of Real body
range )
• Little or no upper shadow
• Appear after significant Uptrend
@sanstocktrader
Hanging Man Bearish Reversal Candle
Doji
• No or very small real body
• Open price = close price
• Upper and lower shadow can be of any length
• One of the more powerful reversal candle when appears on support and
resistance
• High and Low of the Doji candle play important role
• Buy entry = Above high of Doji Candle .
SL =Low of Doji Candle ,Target =2-3 time Range
of Doji
• Sell entry = Below Low of Doji Candle . SL =Low of Doji Candle ,Target =2-
3 time Range of Doji @sanstocktrader
Doji
Bullish engulfing pattern
@sanstocktrader
• Two candle stick pattern

• 1st candle is bearish Red candle followed Bullish candle
which cover entire range of 1st bearish candle (Real Body)
• Considered as Bullish reversal candle , when appear after
down trend
• Bullish Engulfing Candle work extremely well when
appeared at support zone
• Bullish Engulfing weekly candle is best reversal signal
• Hourly Bullish Engulfing candle offers good risk :reward entry for short term trade
for 2 to 3 days.
• Buy Entry : Above high of 2nd bullish candle , SL = Below low of Bullish Candle
Bullish engulfing candle
Hourly Bullish Engulfing Candle
Bullish Engulfing Candle
Bearish Engulfing pattern
• Two candle stick pattern
• 1st candle is bullish Green candle followed Bearish candle
which cover entire range of 1st Bullish candle (Real Body)
• Considered as Bearish reversal candle , when appear after
prior Uptrend
• Bearish Engulfing Candle work extremely well when
appeared at resistance zone
• Bearish Engulfing weekly candle is best reversal signal
• Hourly Bearish Engulfing candle offers good risk :reward entry for short term trade
for 2 to 3 days.
• Sell Entry : Below Low of 2nd bearish candle , SL = Above high of Bearish Candle
@sanstocktrader
Bearish Engulfing Candle
Bullish Piercing Candle
• Two candle stick pattern ( Reversal Candle )
• 1st candle is Bearish Red candle followed Bullish Candle
which close above 50% range of 1st Red Candle
(Real Body) after Gap down opening
• Considered as Bullish reversal candle , when appear
after prior Down Trend .
Bullish Piercing Candle represent smart money buying after prolonged

down trend .
Bullish piercing candle
Dark Cloud Cover
Two candle stick pattern ( Reversal Candle )
1st candle is Bullish Green candle followed Bearish Red Candle
which close below 50% range of 1st Green Candle
(Real Body) after Gap Up opening
Considered as Bearish reversal candle , when appear
after prior Up Trend .
Dark cloud candle represent initiating selling by smart .

( Many times this candle appear after good news is out in
public domain )
@sanstocktrader
Dark cloud cover candle
Morning Star Bullish reversal Candle
@sanstocktrader
Three candle stick pattern ( Reversal Candle )

1st candle is Big Bearish candle followed small Bullish Candle
After Gap down opening and final Big Bullish Candle
Considered as Bullish reversal candle , when appear after prior

Down Trend .
I personally like to trade Morning star bullish reversal candle .
Significance of this candle increases when 3rd closes deeply into 1st candle & Gap between
1st & 2nd candle and 2nd & 3rd candle . ( Not compulsory to have Gap between 2nd & 3rd candle
Bullish Morning star candle
Evening star candle
• Three candle stick pattern ( Reversal Candle )
• 1st candle is Big Bullish candle followed small Bearish Candle
after Gap Up opening and final Big Bearish Candle
• Considered as Bearish reversal candle , when appear after prior

Up Trend .
• I personally like to trade Morning star bullish reversal candle .
• Significance of this candle increases when 3rd closes deeply into 1st candle & Gap
between
• 1st & 2nd candle and 2nd & 3rd candle . ( Not compulsory to have Gap between 2nd &
3rd candle
@sanstocktrader
Evening star candle
Candle Wick
• Trading is game of recognition , The Traders that consistently recognize profitable
pattern in the market ahead of crowd will be those who prosper in this game .
• Candle wick is one of the most important feature for Traders to identify potential
reversal.
• Long Candle wick generally more than 3.5 times of candle real body is considered
as ( Pin bar or Wick reversal candle ) .
• The wick reversal set up is one of most visually compelling candlestick patterns
due to its long price trail , which helps to highlight major reversal opportunities in
market.
• Longer is Wick higher is the probability of reversal .
@sanstocktrader
Wick reversal candle
Wick reversal
• When ever any instrument make long lower wick ( tail ) , it is considered as Bullish
Wick Reversal candle ( Bullish Pin Bar ) .
• Bullish Wick Reversal Candle is formed when instrument find buyers at low point
and push instrument price much higher and close much higher from candle low .
• Bullish Wick Reversal Candle offer low risk high reward buy entry above high of the
candle with stop loss below low of the candle .
• Work best on Weekly , daily and hourly time frame .
@sanstocktrader
Wick reversal
• When ever any instrument make long Upper wick ( tail ) , it is considered as
Bearish Wick Reversal candle ( Bearish Pin Bar ) .
• Bearish Wick Reversal Candle is formed when instrument find strong Sellers at
high point and push instrument price much lower and close much lower from
candle high .
• Bearish Wick Reversal Candle offer low risk high reward Sell entry Below Low of
the candle with stop loss above high of the candle .
• Work best on Weekly , daily and hourly time frame .
@sanstocktrader
Bearish wick reversal candle

Candlestick by Sanstocktrader

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JAPANESE CANDLESTICK

Bearish Marabozu hourly candle

Bullish Hammer Reversal candle

• Two candle stick pattern

Bullish Piercing Candle represent smart money buying after prolonged

Dark cloud candle represent initiating selling by smart .

Three candle stick pattern ( Reversal Candle )

Considered as Bullish reversal candle , when appear after prior

I personally like to trade Morning star bullish reversal candle .

• Considered as Bearish reversal candle , when appear after prior

• I personally like to trade Morning star bullish reversal candle .

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