Adapted from Incredible Charts Candlestick Charts. The Japanese have been using candlestick charts since the 17th century to analyze rice prices. Candlesticks contain the same data as a normal bar chart but highlight the relationship between opening and closing prices. The narrow stick represents the range of prices traded during the period high to low while the broad mid-section represents the opening and closing prices for the period.

With candlestick charts you have the ability to highlight trends and reversal signals that may not be apparent on a normal bar chart. The long blue line is a sign that buyers are firmly in control — a bullish candlestick. A long red line shows that sellers are in control — definitely bearish. An open and close in the middle of the candlestick signal indecision.

Long-legged dojis, when they occur after small candlesticks, indicate a surge in volatility and warn of a potential trend change. The dragonfly occurs when the open and close are near the top of the candlestick and signals reversal after a down-trend: A gravestone is identified by open and close near the bottom of the trading range.

The candlestick is the opposite of a hammer and signals reversal when it occurs after an up-trend. The Piercing Line is the opposite of the Dark Cloud pattern and is a reversal signal if it appears after a down-trend. A Harami formation indicates loss of momentum and often warns of reversal after a strong trend. A long body followed by a much shorter candlestick with a short body, where the bodies must not overlap — though their shadows may.

The Morning Star pattern signals a bullish reversal after a down-trend. The first joptionpane showmessagedialog null first gui program has a long black body.

The second candlestick gaps down from the first the candlestick chart trading strategies display a gap, but the best forex scalping book may still overlap and is more bullish if hollow.

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The next candlestick has a long white body which closes in the top half of the body of the first candlestick. The pattern is more bearish if the second candlestick is filled rather than hollow.

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The doji star requires confirmation from arcanems how to make money next candlestick closing in the bottom half of the body of the first candlestick. The pattern requires confirmation from the next candlestick closing below half-way on the body of the first.

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The final white line forms a new closing high. The pattern is definitely bullish.

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While candlesticks may offer useful pointers as to short-term direction, trading on the strength of candlestick signals alone is not advisable. In the end they are just indicatorsand are most useful when used in conjunction with other indicators. Stock Trading Strategies Stock Market Strategies for Trading. Posts Indicators Candlesticks Videos ASX Top Stocks Incredible Charts Technical Analysis Chart Analysis Essential Indicators Understanding Candlesticks Useful Links Ichimoku Definitions Disclaimer.

Long Lines The long blue line is a sign that buyers are firmly in control — a bullish candlestick.

Doji Candlesticks The doji candlestick occurs when the open and closing price are equal. Dragonfly The dragonfly occurs when the open and close are near the top of the candlestick and signals reversal after a down-trend: Piercing Line The Piercing Line is the opposite of the Dark Cloud pattern and is a reversal signal if it appears after a down-trend.

Harami Candlestick A Harami formation indicates loss of momentum and often warns of reversal after a strong trend.

Morning Star The Morning Star pattern signals a bullish reversal after a down-trend. Subscribe to our Newsletter. Some topics to be covered Stock Trading Strategies candlestick patterns technical chart candlestick pattern how to read stock charts trending stocks stock trading tips technical analysis for dummies stock trading strategies technical analysis books reading stock charts candle patterns stock trading course stock trading strategy stock trading techniques Getting Started in Chart Patterns Ichimoku Cloud Charts.