A doji, which means “mistake” in Japanese, is a single candlestick pattern that is made up of a candlestick without any real body. The opening and the closing price of a doji are the same.

So a period of trading starts at a particular price and after moving and down, closes at the same opening price. This indicates that the bears and the bulls are equally influencing the price.

Even though, this indicates indecision, it could lead to a change in momentum [...]

People who are familiar with the hanging man candlestick pattern will find that the hammer looks almost identical, except that it is found at the end of a downtrend instead of at the end of an uptrend. This candlestick has a small body, with a difference of just a few points that is located above a longer wick. There may be a small upper wick, but usually there is none at all. The candlestick body can be black or white, [...]

The hanging man candlestick pattern can be recognized by a single candlestick with a small body that can be black or white. There is a relatively long lower wick and little or no upper wick. This is caused by the stock opening at a high price that drops throughout the day before being driven back up to close near its opening price. One other way you can recognize the hanging man is that it will occur after a bullish trend. [...]

Another single candlestick pattern, the belt holds pattern has two variations: the bullish belt hold and the bearish belt hold. The bullish belt holds candlestick easily be distinguished as a long white candlestick with a short wick at the top, indicating that the opening price was the low of the day, with the close just short of the day’s high. The bearish belt holds, on the other hand, is a long black candlestick with a short wick at the bottom, [...]

The spinning top candlestick consists of a short body with a longer wick on either side. The length of the wicks may vary, but they are both longer than the body and similar in length to each other. This pattern is similar to the long-legged doji, but with a slightly larger body.

One common candlestick pattern is called the doji. This candlestick is distinguished by being very short, indicating that there was only a small difference between the opening and closing prices. Sometimes the candlestick is so short it is only a horizontal line, but it can vary by a few points. A long legged doji has the characteristic short candlestick with long wicks on either side that are of similar length, which show that prices traded far from their opening and [...]

The Bearish Gravestone Doji is a candlestick pattern where the opening and closing price are the same and are at the low of the day. This is the most bearish pattern indicating that the buyers has dominated the day attracting more and more sellers till the sellers take control and this brings the price down to the low of the day.

Dojis usually signal a trend change and a bearish gravestone doji usually signals a downward trend. You could go short [...]

Also called as the Bearish Long Black Candle, the Bearish Black Marubozu Candlestick is the opposite of the Bullish White Marubozu Candlestick pattern.

A long black candle indicates a bearish trend where the sellers are in control and end the day selling quite low. So if the price opens at the high of the day and closes at the low of the day results in a Black Marubozu or the long black candlestick. The longer the candle is the more [...]

As mentioned in the previous post on Doji, a Dragonfly Doji has three equal components – the open, the high and the close. So, the stock opens, goes down during the course of the day and then comes back up to the open and closes.

This kind of formation could be considered bullish as on that day the sellers came in wanting to control the price, reducing the price of the stock till the buyers came in and started buying [...]

In Japanese “Marubozu” means almost bald. That is an apt name for the single candlestick pattern we are about to discuss called the “White Marubozu” or long white candlestick.

As discussed in the anatomy of a candlestick, you can see that the top part of the candle stick is the highest price of the day, the bottom of the candlestick is the lowest price of the day and the body of the candlestick shows the open and close. If it is [...]