Money Making Candlestick

Money Making Candlestick Formations Candlestick Line

 

Candlestick Line

Candlestick lines and charts — traditional Japanese charts whose individual lines look like candles, hence their name.  The candle- stick line is comprised of a real body and shadows.   See “Real body” and “shadow.”

 

Candlestick Formations

Belt-hold line — there are bullish and bear- ish belt holds.  A bullish belt hold is a tall white candlestick that opens on its low.  It is also called a white opening shaven bottom. At a low price area, this is a bullish signal.  A bearish belt hold is a long black candlestick which opens on its high.  Also referred to as a black opening shaven head .  At a high price level, it is considered bearish.

 

Counterattack Lines

Counterattack lines — following a black (white) candlestick in a downtrend (up- trend), the market gaps sharply lower  (higher) on the opening and then closes unchanged from the prior session’s close. A pattern which reflects a stalemate between the bulls and bears.

 

Dark-cloud cover

A bearish reversal signal.  In an uptrend a long white candlestick is followed by a black candlestick that opens above the prior white candlestick’s high.  It then closes well into the white candlestick’s real body.

 

Doji –a session in which the open and close are the same (or almost the same).  There are different varieties of doji lines (such as a gravestone or long-legged doji) depending on where the opening and closing are in relation to the entire range.  Doji lines are among the most important individual candle-stick lines.  They are also components of important candlestick patterns.

 

Engulfing Patterns

Engulfing patterns  — there is a bullish and bearish engulfing pattern.  A bullish engulfing pattern is comprised of a large while real body which engulfs a small black real body in a down-trend.  The bullish engulfing pattern is an important bottom reversal.  A bearish engulfing pattern (a major top reversal pattern), occurs when selling pressure overwhelms buying pressure as reflected by a long black real body engulfing a small white real body in an uptrend.

 

Doji Star

Doji star — a doji line which gaps from a long white or black candlestick.  An important reversal pattern with confirmation during the next session.

 

Evening star

A major top reversal pattern formed by three candlesticks. The first is a tall white real body, the second is a small real body (white or black) which gaps higher to form a star, the third is a black candlestick which closes well into the first session’s white real body.

 

Evening doji star

The same as an evening star except the middle candle- stick (i.e., the star portion) is a doji instead of a small real body.  Because there is a doji in this patter, it is considered more bearish than the regular evening star.

 

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