Types of Candlestick Charts: Single Candlestick Patterns and Multiple Candlestick Patterns

Posted on 2023-04-17 Updated on 2023-04-17

Candlestick charts are divided into two main categories: single candlestick patterns and multiple candlestick patterns.

Single candlestick patterns are made up of a single candle and are used to identify potential trend reversals. Some examples of single candlestick patterns include:

Doji: a candlestick pattern that occurs when the opening and closing prices are very close or the same. It indicates indecision in the market and can signal a trend reversal.

Hammer: a candlestick pattern that has a long lower shadow and a short body. It indicates a potential trend reversal from bearish to bullish.

Shooting star: a candlestick pattern that has a long upper shadow and a short body. It indicates a potential trend reversal from bullish to bearish.

Multiple candlestick patterns are made up of two or more candles and are used to identify trends and potential trend reversals. Some examples of multiple candlestick patterns include:

Bullish engulfing pattern: a two-candle pattern that occurs when a small bearish candle is followed by a larger bullish candle. It indicates a potential trend reversal from bearish to bullish.

Bearish engulfing pattern: a two-candle pattern that occurs when a small bullish candle is followed by a larger bearish candle. It indicates a potential trend reversal from bullish to bearish.

Three black crows: a three-candle pattern that occurs when three consecutive long bearish candles appear. It indicates a strong bearish trend.

Three white soldiers: a three-candle pattern that occurs when three consecutive long bullish candles appear. It indicates a strong bullish trend.

These are just a few examples of the many candlestick patterns that traders use to analyze market trends and make trading decisions.


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