Components of a Candle (Body, Wick, High, Low)Types of Candlestick Patterns
Candlestick patterns are broadly divided into:
A. Single Candlestick Patterns
Formed by just one candle.
B. Double Candlestick Patterns
Formed by two-candle combinations.
C. Triple Candlestick Patterns
Formed by three-candle combinations.
Let’s dive into each category in detail.
Candlesticksignals
Real Knowledge Of Candle Patterns Candlestick Patterns in Reversal Trading
Reversals are powerful when:
Patterns appear on key levels
Trend is exhausted
Volume divergence occurs
Examples:
Morning Star at support
Shooting Star at resistance
Engulfing candles at major swing points
Combining Candles with Indicators
Although candles alone are powerful, combining them with indicators increases win probability.
Best indicators:
RSI for overbought/oversold
Volume Profile / Market Structure
MACD for momentum shift
Moving averages for trend direction
Cadnle Patterns Mistakes Traders Make With Candle Patterns
Mistake 1: Trading Every Pattern
Not every hammer means buy; not every engulfing means reversal.
Mistake 2: Ignoring the Trend
Trend is king. Patterns against trend are less reliable.
Mistake 3: No Confirmation
Waiting for confirmation improves accuracy.
Mistake 4: Overlooking Market Structure
Support/resistance is more powerful than candle patterns.
Mistake 5: Using Candles Alone
Combine with other tools for best results.
Candle Patterns Candlestick patterns are one of the most valuable tools for traders. They visually represent the battle between bulls and bears and reveal hidden clues about upcoming market movements. Whether you're trading intraday, swing, or positional, these patterns help spot reversals, continuations, breakouts, and exhaustion points.
But remember: Candle patterns are most powerful when combined with trend analysis, support/resistance, volume, and market structure. Mastering them takes practice, but once you internalize their psychology, you can interpret charts with much more confidence and precision.
Candle Pattern Knowledge Limitations and Best Practices
Candlestick patterns alone should not be used as the only basis for trades. They are best combined with:
Moving averages
RSI or MACD
Support/resistance levels
Volume analysis
Best Practices
Wait for confirmation before entering.
Avoid trading patterns in choppy, sideways markets.
Use stop-losses under key levels.
Combine with market structure for higher accuracy.
Candle Patterns ExplainedCandlestick patterns are one of the most powerful tools in technical analysis. They visually capture the battle between buyers and sellers and show you who is in control of the market at any moment. Each candle represents the market psychology of that particular timeframe—fear, greed, rejection, aggression, and hesitation. When you learn to read candles correctly, you understand the story behind price, not just the price itself.
A single candlestick is made up of four important points: Open, High, Low, and Close (OHLC). The body of the candle represents the distance between open and close. The wicks (also called shadows) show the highest and lowest points reached during the candle. Bullish candles close higher than they open, while bearish candles close lower than they open.
Candle patterns are broadly divided into three categories: Single-candle patterns, Double-candle patterns, and Triple-candle patterns. Each type gives different signals about trend continuation, reversal, or market indecision.
Candle Patterns Explained Candlestick patterns are one of the most powerful tools in technical analysis. They help traders understand price movements, market psychology, and potential trend reversals. Each candlestick represents four key data points for a specific time frame: Open, High, Low, and Close (OHLC). The body shows the open and close, while the wicks (shadows) show the high and low. By studying these candles in combinations, traders can forecast upcoming market moves.
1. Bullish Candlestick Patterns
2. Bearish Candlestick Patterns
3. Continuation Candlestick Patterns
Why Candlestick Patterns Matter
Candlestick patterns work because they capture market psychology — fear, greed, indecision, and momentum. When combined with volume, support-resistance, and trend analysis, they become a highly effective decision-making tool for traders.
Candle Patterns 1. Buyers
Push price upward
Create green candles
Long wicks show rejection of low prices
2. Sellers
Push price downward
Create red candles
Long top wicks indicate weakening buying strength
3. Indecision
Appears in dojis and spinning tops
Market is waiting for direction
4. Reversals
Appear when buyers overpower sellers or vice-versa
Engulfing, hammer, shooting star signal possible turning points
5. Continuation
Patterns like Rising Three Methods show temporary rest before trend resumes
Real Knowledge of Candle Patterns Candlestick patterns are one of the most important tools in technical analysis. They help traders understand price movements, market psychology, and potential trend reversals or continuations. Each candlestick represents a battle between buyers (bulls) and sellers (bears). When you observe many candles together, you see patterns that reveal shifts in momentum. These patterns have been used for centuries—originating in Japan—and remain powerful even in modern algorithmic markets.
To understand candlestick patterns, you must first understand the candle structure. A candlestick has four major price points:
Open – the price at which the candle starts
Close – the price at which the candle ends
High – the highest price reached during the candle
Low – the lowest price reached during the candle
If the close is higher than the open, the candle is bullish (typically green or white). If the close is lower than the open, the candle is bearish (typically red or black). The body shows the open-close range, and the wicks (shadows) show the high-low range.
Part 2 Understanding the Master Candle ConceptWhat Are Options?
Options are derivative instruments, meaning their value is derived from an underlying asset. The underlying asset can be a stock, index, commodity, or currency.
There are two types of options:
Call Option:
Gives the buyer the right to buy the underlying asset at a specific price (called the strike price) before the expiry date.
Put Option:
Gives the buyer the right to sell the underlying asset at a specific price before the expiry date.
For example:
If you buy a NIFTY 50 call option at a strike price of 22,000, you are betting that the NIFTY will rise above 22,000 before expiry. If it does, your call option increases in value.
If you buy a NIFTY put option at 22,000, you’re betting the index will fall below 22,000 — and the value of your put option will rise as the index drops.
Explain: Candle PatternWhat is a Candlestick Pattern?
A candlestick pattern represents the price movement of an asset (like a stock) during a specific time frame. It shows open, high, low, and close prices in one candle.
Structure of a Candle
Each candle has:
Body: The range between open and close price.
Wick (or shadow): The lines above and below the body showing high and low prices.
Color: Green (bullish – price up) or Red (bearish – price down).
Part 2 Candle Stick PatternUnderstanding Call and Put Options
There are two basic types of options: Call Options and Put Options.
Call Option:
A call option gives the holder the right, but not the obligation, to buy an underlying asset at a specific price (called the strike price) before a specific date (called the expiry date).
Put Option:
A put option gives the holder the right, but not the obligation, to sell an underlying asset at a specific strike price before expiry.
Part 1 Candle Stick PatternRisks and Rewards in Option Trading
Option trading offers tremendous potential—but it comes with unique risks. Understanding these is essential:
Limited Time: Options lose value as expiry nears due to time decay (Theta).
Volatility Risk: Sudden drops in volatility can reduce option prices unexpectedly.
Liquidity Risk: Some options have low trading volume, making it difficult to enter or exit positions.
Leverage Effect: Options amplify both gains and losses.
Margin Requirements (for Sellers): Option writers must maintain sufficient margin, as potential losses can be large.
MIDCAP INDEXHello & welcome to this analysis
The index after a steep decline formed a bullish Harmonic Bat reversal pattern.
At the 50% retracement level it has formed a three candlestick bullish signal - Upside Tasuki Gap suggesting further upside.
As long as it sustains above 51500 it could continue its up move till 54500 that is the 62% retracement and above that 57500 that coincides with the trend line resistance.
All the best






















