Cursory Look on Language of Candlestick Charting

There are several charts and technical indicators implemented by the technical analysts to generate accurate intraday cash tips. The large numbers of technical analysts depend on candlestick patterns to generate intraday cash tips. If you are the one, who is unfamiliar with the candlestick patterns then you have arrived at the right page of the internet as this post embraces three main types of candlestick patterns that every trader must know.

Let us get started.

Doji:

Doji is a chart pattern that says the opening and closing price is same or almost tends to be same. In this type of chart pattern, there is no body formation. The pattern can appear in different forms in the technical chart based on the trading activity involved over the period. The Doji pattern of candlestick charts indicates that neither the bears nor bulls have accomplished power. Therefore, this can be interpreted that the prices of the stocks are still at the same phase where it started. You can assume this condition as the indication of uncertainty in the market and this may show the discrepancy in a market when used in combination of another indicator. 

HAMMER and HANGING Pattern

Hammer:

Hammer pattern of candlestick chart is one of the sources for the reversal indicators that comprises of only one single candle. This pattern embraces a long lower wick that is longer than the body of the candle. However, in reality, sometimes very small lower wick is also seen. In a case of the downtrend, a hammer pattern is set up and it signals a bullish reversal. You can confirm the hammer pattern in the chart when the longer lower wick is formed. The lower wick must be at least two times the body of the candle. This pattern signals strong buying by bulls and the selling of the stock declines over this period. The bullish trend of the market is confirmed by the formation of a green candlestick, which opens above the body of a hammer.

Hanging Man:

The Hanging Man pattern of candlestick chart is similar to hammer pattern but the only difference in both the patterns is that the pattern seems to appear in an uptrend. When the traders do not find the strong selling pressure in an uptrend than the pattern, suggest a change of market sentiment and a reversal to the downside. For this candlestick chart pattern, there is no color foundation but it must have the short body with a long wick. The short body of the candle indicates the indecisiveness of the market. On the other hand, the strongest indicators are the green or white hammer and red or black hanging man.

In the technical analysis, these are three main candlestick chart patterns that boldly show the current trend of the market. Technical analysts and traders for best consequences broadly use candlestick pattern and thus they are capable of generating accurate tips. If you are a novice trader then you must get in touch with the technical analysts of Money Classic Research to get best intraday tips for tomorrow.

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