Candlestick Patterns PDF Free Guide Download

Candlestick Patterns Free PDF Guide

Candlestick patterns are one of the oldest forms of technical and price action
trading analysis.
Candlesticks are used to predict and give descriptions of price movements of a

security, derivative, or currency pair.
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Candlestick charting consists of bars and lines with a body, representing

information showing the price open, close, high, and low.
It dates back to the 16th century when a man named Homma Munehisa used this to
trade rice contracts. He was also thought to have developed the candlestick charts
that was later brought to the Western world by Steve Nison.
Steve Nison introduced candlesticks to the world in his 1991 book “Japanese
Candlestick Charting Techniques” and they are now very popular because of their
simplicity and unique insight into the sentiment of the market.
Candlestick charts are most often used in technical analysis of equity and currency
price patterns.

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What are Candlestick Charts?
Candlesticks are visual representations of market movements. Traders use

candlesticks to help them make better trading decisions by studying patterns that
forecast a markets short-term direction.
A candlestick is a chart that shows a specific period of time that displays the prices
opening, closing, high and low of a security. It is a fundamental component of
technical analysis because it helps a trader understand a market movement at a
glance. It is a very suitable technique for trading liquid financial assets such as
Forex, and futures.

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What is the Difference Between Candlestick Charts and Bars?
Bars and candlestick charts are both used for technical analysis to study the supply
and demand of a security or commodity in a marketplace and represents the
trading range of a security.
Bar charts have a small tick symbol on the left side to represent the opening price
and a small tick on the right side to indicate the closing price.
As for a candlestick chart, it has a body and a shadow. Bodies are defined as the
range between the opening and closing price. Shadows represent the range of the
day outside of the opening and closing of the prices.

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Mastering Candlestick Charts
Candlestick patterns are an efficient way for you to view an asset’s price chart. It
shows you which way the price moved during a specific period of time using colors,
as well as how far the price moved on that period.
Time frames are shown for the time frame you are using or have selected. For
example; if you are using a 5-minute time frame, a candle will show the HIGH, LOW,
OPEN and CLOSING in 5 minute intervals.

Bullish Candle and Bearish Candle
Bullish and bearish represents buyers and sellers.
The intra-session high represents bulls and the intra-session low represents the
bears. If the close is closer to high, then the bulls are in control. If the close is closer
to the low, then the bears are in control.
A bullish candle shows that the price has increased over the set time period. For
the bearish candle it shows that the price has decreased over the time period. Each
fully formed candle represents the price action of a specific time period.
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Candlesticks have 2 parts, a real body and a wick (tail). The open and close prices
are the first and last transaction prices of that time frame. If no real body was
shown or the real body is very small, then it means that the open and close are
almost the same. In addition, real bodies have color but differ in every charting
platform.
The most common color of real bodies is green, red, white, and black, however you
can change this to your liking.
A green or white candle means the price finished higher or the closing price is
above the open price. A red or black candle means that the price has decreased
over the time period or the top of the real body is the open price and below is the
closing price.
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The bullish candle and the bearish candle similarly reflect the difference between
the open and close price during that period.
Most charting platforms allow you to make adjustments to your candlesticks to be
visually appealing and easily identifiable.
You can alter the colors of your up and down candles to make the contrast distinct.

What are Some of the Best Candlestick Chart Patterns?
Bullish Engulfing Candlestick
Quite a name for a candlestick. This pattern consists of two candles and shows
when the price of a security moves beyond the high and low of the previous
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sessions range. This candle is your signal for a sustained upward move or trend
change.

Doji Candlestick
A doji candlestick is one of the most popular candlestick patterns. The doji pattern
usually has a very small body with a close near the open price. It also has a long
wick formed to the high and low. This candlestick offers a heads up that the
sentiment may be changing.

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Harami Candlestick
The bullish and bearish harami is a two candlestick pattern that is considered a
reversal pattern.
For a bullish reversal the first candle needs to be a large bearish candle. This is then
followed by a small bullish candle.
For a bearish harami the inverse needs to occur. The first candle needs to be a
strong bullish candle followed by a smaller bearish candle.

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Bearish Engulfing Candlestick
This pattern is the opposite of the bullish engulfing candle.
This can be a precursor to a sharp sustained drop and provide an indication of
potential reversal or trend change.

Using Advanced Candlestick Patterns
One of the best features of candlestick charting is that it helps you visualize market
movements without overpopulating your monitor with numbers or complicated
indicators and news feeds.
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Because of the candlestick, you can quickly understand what’s going on with the
price of a security at a single glance.
You can also tell whether the sellers or buyers have dominated on a given day
along with the sense of the trend. It is an excellent way for traders to identify and
decide when is the best time to buy, sell, or wait.
After reading the most rudimentary of candlestick basics, you can easily spot the
opening and closing price of a security and start to see patterns forming. You can
then begin using more advanced patterns like the hanging man candlestick pattern
in your trading.

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Candlestick Patterns PDF Free Guide Download

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What are candlestick charts?

What is the difference between candlestick charts and bars?

Candlestick Patterns Free PDF Guide

Candlesticks are used to predict and give descriptions of price movements of a

Candlestick charting consists of bars and lines with a body, representing

What are Candlestick Charts?

Candlesticks are visual representations of market movements. Traders use

What is the Difference Between Candlestick Charts and Bars?

Mastering Candlestick Charts

Bullish Candle and Bearish Candle

Bullish and bearish represents buyers and sellers.

What are Some of the Best Candlestick Chart Patterns?

Bullish Engulfing Candlestick

Bearish Engulfing Candlestick

This pattern is the opposite of the bullish engulfing candle.

Using Advanced Candlestick Patterns

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