Japanese Candle Stick

Technical Analysis
Attempt to forecast stock price on basis of market
derived data
Technicians are only interested in the price movements
in the market.
Supply and Demand of Market
Fundamental vs. Technical

Japanese candlestick
Chart which describe price movement of security or
could be currency
Originated in Japan
Before west developed Bar and lines to read market

History of Japanese candlestick

Homma
Price and supply and demand
Market is influenced by trader

Japanese Candlestick Anatomy

Long Shadows

Reversal Patterns
Double Tops & Bottoms
Triple Tops & Bottoms
Head & Shoulders
Rounding Bottom Patterns

Double Tops

Double Bottoms

Triple Tops & Bottoms

Head & Shoulders

Rounding Bottom Patterns

Basic Japanese Candlestick Patterns

Neither buyers nor sellers could gain the upper

hand, and the result was a standoff.

 If a spinning top forms during an uptrend, this usually means there

arent many buyers left and a possible reversal in direction could occur.
If a spinning top forms during a downtrend, this usually means there
arent many sellers left and a possible reversal in direction could occur.

Marubozu

Bullish Marubozu means that Bulls are so strong and didnt allow
Bears to take the price down
Bearish Marubozu means that Bears are strong and there is a lot of
sell activity in the market
The longer the candlestick, the stronger the Bulls/Bears.

What does it mean in general?

1. When you see a Bullish Marubozu, you should not take a short position
because Bulls are strong and price can go higher.
2. When you see a Bearish Marubozu, you should not take a long position.
3. When you see a Bullish Marubozu at end of a downtrend, it is a reversal
signal. You can just wait for the next candlestick and if it is Bullish too,
you can take a long position.
4. When you see a Bearish Marubozu at end of an uptrend, it is a reversal
signal. You can just wait for the next candlestick and if it is Bearish too,
you can take a short position.
5. If you already have a long position and you see a Bearish Marubozu at the
end of the uptrend, you should close your position and take your profit.
6. If you already have a short position and you see a Bullish Marubozu at the
end of the downtrend, you should close your position and take your profit.

Doji
Doji means unskillfully.
They dont have a body.
The open price and close price are the same.
It means Both Bulls and Bears have the same power and
are matched and the price doesnt know where to go.
Provide uncertainty signals.
Doji candlesticks need confirmation, they are dependent
on next candlestick.

Single Candlestick Patterns

Hammer/Hanging Man

Hammer/Hanging Man

Inverted Hammer/Shooting Star

Inverted Hammer/Shooting Star

Dual Candlestick Patterns

Engulfing Candles
Strong reversal signal at the end of a trend.
Engulfing pattern is stronger when the first candlestick has a small and
the second candlestick has a big body.

Tweezer
The shadows of the candlesticks should be of equal length.
Tweezer Tops should have the same highs, while Tweezer
Bottoms should have the same lows.
They have identical highs at the top of the market or
identical lows at the bottom of the market.

Harami
Harami means pregnant in Japanese.
It has to be confirmed by the next candlesticks.
When the small candlestick in Harami pattern is a Doji,
the pattern is calledHarami Cross.

Morning Star

Bullish

Evening star
Bearish
Evening star formations can be useful in determining
trend changes, particularly when used in conjunction
with other indicators.

Three black crows

A bearish candlestick pattern that is used to predict the
reversal of the current uptrend
This pattern is used to predict the top of an uptrend, but
traders will want to confirm this signal with other
technical indicators to confirm that the momentum is
actually changing.

Three white Soldiers

A bullish candlestick pattern that is used to predict the
reversal of the current downtrend.