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Candlestick Patterns Every Trader Should Know

Candlestick Patterns

In stock market, traders rely on various share market techniques and tools to make informed decision based on the movements of price. One of the important techniques in technical trading is the Candlestick Pattern. Candlestick indicates the price movement of an asset over a specified period of time. The body of each candlestick is constructed from wicks (also known as shadows) at both ends, shows the open, high, low, and close for that particular time period. In order to help technical traders make predictions about the future movements and price patterns of the underlying asset, candlestick patterns evaluate one or more candlesticks.

Traders have to understand how the inclination of these patterns might impact the market direction (trend) in order to identify and apply the most popular candlestick patterns to a trading strategy. These signals may help in modifying your strategy by identifying them. The two primary categories of price movement, bullish and bearish, that candlesticks may demonstrate are outlined below.

Learn Top Candlestick Patterns in India Every Trader Should Know

  1. Evening Star and Morning Star: Typically, reversal patterns are indicated by the evening and morning star candlestick patterns, which occur close to the end of upward or downward trends, respectively. A confirmation candle in the direction of the related reversal is necessary for trading this candlestick pattern; for example, traders will look for a bearish candle that follows the evening star.
  2. Hammer: The Hammer candle indicates a bullish reversal that appears at the bottom of a downward trend.
  3. Bullish & Bearish Harami: The bullish and bearish harami patterns can point to trend reversals.
  4. Dark Cloud Cover: It indicates bearish reversal patterns. When there is an uptrend, a bearish candle follows a bullish one.
  5. Doji: A Doji pattern could indicate a consolidation or reversal and signifies indecisiveness in the market.
  6. Piercing Pattern:  A bullish candle closing above the middle of a previous negative candle identifies this piercing pattern as a bullish reversal.
  7. Bullish & Bearish Engulfing: A bullish or bearish engulfing candlestick pattern indicates reversal patterns.
  8. Inside Bars: A trader must continue with a short position in the direction of the trend during inside bars. The trading of inside bars follows the market conditions. In an uptrend, the same principle is utilized.
  9. Long Wicks: Long Wicks, which typically come before trend reversals, signal price rejection. Price movement and key level identification are frequently utilised in conjunction with these patterns.
  10. Shooting Star: It represents a bearish reversal pattern that has a long upper wick and a short body, and it reverses an uptrend.

Before utilizing more complex patterns, it’s necessary that you understand the fundamentals of candlestick charts. Our team of experienced traders can offer valuable insights into different trading techniques. By utilizing our module for Candlestick Charts for Intraday Trading, Traders Platform can provide you a competitive advantage and educate you while you trade. Enroll in our trading course, designed for both beginners and expert traders, to learn more about technical trading and stock market strategies.

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