candlestick pattern
A candlestick pattern is a price chart pattern used in technical analysis to predict future price movements based on past trading behavior. It consists of individual candlesticks that represent the open, high, low, and close prices of an asset within a specific time frame.
Each candlestick has a body (which shows the difference between the opening and closing prices) and wicks/shadows (which indicate the highest and lowest prices reached during the period). Candlestick patterns can signal bullish or bearish trends, trend reversals, or continuation patterns.
Some common candlestick patterns include:
- Bullish Patterns: Hammer, Morning Star, Bullish Engulfing
- Bearish Patterns: Shooting Star, Evening Star, Bearish Engulfing
- Reversal Patterns: Doji, Piercing Line, Dark Cloud Cover
- Continuation Patterns: Rising Three Methods, Falling Three Methods
Traders use these patterns to make informed decisions about buying, selling, or holding assets in financial markets like stocks, forex, and cryptocurrencies.
