Best Knowledge Of Candle Patterns Single-Candle Patterns
1. Doji:
A Doji forms when the opening and closing prices are virtually identical, resulting in a very small body. It represents indecision in the market. There are variations, such as the Long-Legged Doji, indicating high volatility with indecision, and the Gravestone Doji, often signaling a bearish reversal after an uptrend.
2. Hammer:
A Hammer has a small body near the top of the trading range and a long lower shadow. It typically appears at the bottom of a downtrend and suggests a potential bullish reversal, as sellers pushed the price lower but buyers regained control.
3. Hanging Man:
Resembling the Hammer but occurring after an uptrend, the Hanging Man signals potential bearish reversal. The long lower shadow shows that sellers tried to push the price down, and the market may weaken.
4. Inverted Hammer:
This candle has a small body at the lower end with a long upper shadow, appearing after a downtrend. It indicates potential bullish reversal if followed by confirmation from subsequent candles.
5. Shooting Star:
Opposite of the Inverted Hammer, the Shooting Star appears at the top of an uptrend, signaling a potential bearish reversal. The long upper shadow shows buyers tried to push the price higher but failed.
6. Marubozu:
A Marubozu has no shadows, only a solid body. A bullish Marubozu opens at the low and closes at the high, signaling strong buying pressure. A bearish Marubozu opens at the high and closes at the low, showing strong selling pressure.
