TYPES of CHARTS
Why CandleStick Charts
How Are Candlesticks Structured
FYI: The structure of a candlestick can be applied to different timeframes. For example, you can view candlesticks for intraday (1 minute, 5 minutes, 10 minutes, 30 minutes, 60 minutes, etc.). Candlesticks can also be viewed for days, weeks, months and years. The same principle applies.
The Bullish White Marubozu/The Bearish Black Marubozu
FYI: If you see a Bullish White Marubozu know that in this period, there was more buying than selling. Bulls are in control and this security is in demand. Conversely, a Bearish Black Marubozu is indicative of a lot of selling, bears are in control. The security isn’t in demand; more selling than buying.
FYI: When you see a Doji, this signifies a battle between the Bulls (buyers) and the Bears (sellers). Although there are different types of Dojis (Dragonfly, Long Legged and Gravestone) when you see them, know that the open and closing price of a security was the same. A Doji can be indicative of a change in direction.
Long Legged Doji
Can signal a change in trend and investor sentiment. If it appears at the bottom of a “down trend”, bulls are stepping in and are ready to walk the security up. If it appears at the top of an “uptrend”; bears are stepping in and the security might start to descend.
Bullish trend reversal.
Bearish trend reversal.
FYI: Spinning Tops are similar to Dojis in the sense that the bulls and bears are in a constant struggle for domination of a particular stock. Spinning tops are also indicative of a trend reversal.
FYI:Both the Hanging Man and Hammer are identical in terms of structure but like the Doji and Spinning Tops, identifies a trend reversal.
A Hammer appears at the bottom of a downtrend. A Hanging Man appears at the top of an uptrend. Context is super important.
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