The Hammer and Hanging Man patterns look similar. They both have small bodies, long lower shadows and very short upper shadows. The difference is that they have different effects based on previous prices.
The Hammer is a bullish reversal pattern. It appears after a decrease in prices and may indicate a trend reversal. For instance, after a rapid decline, they indicate a bullish revival.
The Hanging Man is a bearish reversal pattern. It can indicate a resistance level. It gives a sign to investors that the selling pressure is starting to rise.
The Inverted Hammer and Shooting Star look similar. They both have a small real body, a long upper shadow and a very small lower shadow. The difference is that they have different effects based on previous …show more content…
The difference is that it occurs after a decline, it can also represent a support level. A bullish trend can be considered in a precise pattern, if the Inverted Hammer is followed by a long white candlestick with a large volume.
Marubozu are formed by a long body and no upper or lower shadows at all, meaning that the High and Low are the Open and the Close.
A white Marubozu occurs when the open is similar to the low and the close to the high. The close is further above the open when the white body is longer. This shows that buyers were aggressive on the market. This generally means a bullish trend.
A black Marubozu occurs when the open is similar to the high and the close to the low. It shows that prices decreased considerably from the open and that sellers were aggressive on the market.
Spinning Tops are candlesticks with a long upper shadow, a long lower shadow and a small real body. They depict indecision on the market. The small body illustrates minor modifications from open to close. The significant shadows illustrate that both buyers and sellers were very …show more content…
The candlesticks are a good way to visually see how the market moves but they also include some limitations. They do not show the order of the events happening between the opening and closing time. They show the relation between the opening and the closing prices. Candlesticks cannot indicate whether the high or the low came first.
A candlestick showing a long white box supposes that the price increased most of the time. Yet, this session might have been more volatile when looking at the high/low sequence. The example shown in figure XX illustrates two possible high/low sequences that would result in the same candlestick form.
The sequence in the middle shows a large increase in price movement (the white box) and two small moves (high and low bars). We see a decrease below the Open to create the Low then a large increase in price to form the High and finally a slight decrease to create the
The Hammer is a bullish reversal pattern. It appears after a decrease in prices and may indicate a trend reversal. For instance, after a rapid decline, they indicate a bullish revival.
The Hanging Man is a bearish reversal pattern. It can indicate a resistance level. It gives a sign to investors that the selling pressure is starting to rise.
The Inverted Hammer and Shooting Star look similar. They both have a small real body, a long upper shadow and a very small lower shadow. The difference is that they have different effects based on previous …show more content…
The difference is that it occurs after a decline, it can also represent a support level. A bullish trend can be considered in a precise pattern, if the Inverted Hammer is followed by a long white candlestick with a large volume.
Marubozu are formed by a long body and no upper or lower shadows at all, meaning that the High and Low are the Open and the Close.
A white Marubozu occurs when the open is similar to the low and the close to the high. The close is further above the open when the white body is longer. This shows that buyers were aggressive on the market. This generally means a bullish trend.
A black Marubozu occurs when the open is similar to the high and the close to the low. It shows that prices decreased considerably from the open and that sellers were aggressive on the market.
Spinning Tops are candlesticks with a long upper shadow, a long lower shadow and a small real body. They depict indecision on the market. The small body illustrates minor modifications from open to close. The significant shadows illustrate that both buyers and sellers were very …show more content…
The candlesticks are a good way to visually see how the market moves but they also include some limitations. They do not show the order of the events happening between the opening and closing time. They show the relation between the opening and the closing prices. Candlesticks cannot indicate whether the high or the low came first.
A candlestick showing a long white box supposes that the price increased most of the time. Yet, this session might have been more volatile when looking at the high/low sequence. The example shown in figure XX illustrates two possible high/low sequences that would result in the same candlestick form.
The sequence in the middle shows a large increase in price movement (the white box) and two small moves (high and low bars). We see a decrease below the Open to create the Low then a large increase in price to form the High and finally a slight decrease to create the