shadow, then price rallies to close at the highs of the e real body of the candle forms the head, and the long shadow forms the guys hanging legs! Dont think of this as a list to memorize. Candlesticks do not depict the sequence of events between the open and close, only the relationship between the open and close. The first candle is a clear downtrend with a long body. The first candle is an uptrend with a long body. Piercing Line: This is another of the two candle bullish reversal candlestick patterns.
A two candle pattern, the first candle is a long green bullish candle. Often times the fakey setup will consist of a bullish or bearish engulfing pattern which is completely engulfing the range of a spinning top or doji candle which gives rise to a false break bar that can take the form of any of the candlesticks. They are very useful in honing in on the immediate battle between the bulls and bears, in order to see who is winning the struggle for control over the immediate 1-3 candlesticks.
Step 3 Confirm the reversal with any of the above patterns. If the body is small, it is a "Spinning Top and if it is almost non-existent, and looks more like a cross, it is a "Doji". Candlestick charts originated in Japan during the 18th century. Bar charts do not treat the open and close with any special weighting. Step 3 Confirm the reversal with any of the above Bullish Candlestick Patterns. Entry Signal: Sell short when conditions 1- 4 above are met. The Anatomy of a Candle, candlesticks have a central portion that displays the price distance between the open and the close. A bullish or bearish candlestick whereby the length of the tail / lower shadow is at least two thirds of the total shadow length. If the market closed higher than it opened (bullish the real body is white or unfilled, with the opening price at the bottom of the real body and the closing price at the top. Long Lower Shadow, these candles provide a bullish signal, the lower shadow must be at least the size of the real body; the longer the lower shadow the more reliable the signal. The shadow can vary in length, but is usually quite long.