Candlesticks


Inside Bar
Inside Bar indicate contracting range and volatility, which also indicates the selling pressure is subsiding. Emotion also play a role in causing "GAP". Inside bars can indicate that the emotional selling may be coming to an end.
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The Bullish Engulfing pattern
The Bullish Engulfing pattern consists of two bodies. The first body is the red or black color in a down current trend, the second is the green or while color. The signal day opens lower than the previous days close, then it trades higher so by the end of the day, it will close above the previous days open. This new green or white candle now engulfs the previous day candle. The Bullish Engulfing pattern could give a complete change in investor sentiment. You could Use this pattern as a buy signal.
Figure 1 - Bullish Engulfing
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This is a example of Bullish Engulfing patterns at UsOil's weekly chart .
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The Bearish Engulfing pattern
The Bearish Engulfing pattern is the exact opposite that of the Bullish Engulfing pattern. The first body is the green or while color in a up current trend, the second is the red or black color. The signal day opens uper than the previous days close, then it trades lower so by the end of the day, it will close below the previous days open. This new red or black candle now engulfs the previous day candle. The Bearish Engulfing pattern could give a complete change in investor sentiment. You could Use this pattern as a sell signal.
Figure 1 - Bearish Engulfing
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This is a example of Bearish Engulfing patterns at UsOil's weekly chart .
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The Bearish Meeting Lines pattern
The Bearish Meeting Lines pattern forms with a green or white candlestick and a red or black candlestick that have relatively equal closes. A move below the white candlestick low would confirm this pattern.
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This is a example of The Bearish Meeting Lines at SPY's dailyly chart .
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Evening Star

Evening star formations can be useful in determining a uptrend changes. It is a group of three candles that has the following characteristics:

  1. The first bar is a large white or green candlestick located within an uptrend.
  2. The middle bar is a small-bodied candle (black/red or white/green) that closes above the first white bar.
  3. The last bar is a large black or red candle that opens below the middle candle and closes near the center of the first bar's body.

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Morning Star

Morning star formations can be useful in determining a downtrend changes. It is a group of three candles that has the following characteristics:

  1. The first bar is a large black or red candlestick located within an downtrend.
  2. The middle bar is a small-bodied candle (black/red or white/green) that closes below the first white bar.
  3. The last bar is a large while or green candle that opens above the middle candle and closes near the center of the first bar's body.

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Bullish Hammer

Bullish Hammer formations can be useful in determining a downtrend changes. The bullish hammers have small bodies and long wicks and are only seen at the end of a downtrend.The candle itself can either be red or blue depending on the strength of the reversal.

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