DailyFX Education

instructor@fxpowercourse.com

Candlesticks

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Review from Video 1

Candlestick charts show the open, close, high
and low prices.
Candlestick charts allow
speculators to comprehend market sentiment.
Candlestick patterns emerge in one to only a
few candles.

Candlestick Pattern : Doji

The Doji is a candle formation whose opening
and closing price are virtually the same.
Visually, a Doji looks like a cross or plus (+)
sign.
It represents market indecision and
suggests a potential for price reversal

Candlestick Pattern: Shooting Star

The shooting star is a candle formation that closes
below the open and has an upper body wick at
least twice as large as the body. It is a bearish
reversal pattern and suggests price action may
decline in the near future.

Candlestick Pattern: Hanging Man

The hanging man is a bearish candle formation that
forms at the top of an uptrend. It begins with a
strong sell off at the open but ends up closing near
the open. It suggests price action may decline in
the near future.

Candlestick Pattern: Hammer

The hammer is a bullish candle formation that
forms at the bottom of a downtrend. It begins
with strong selling at the open but ends up
closing near the open. It suggests price action
may rise in the near future.

Candlestick Pattern: Spinning Top

A spinning top is similar to the Doji. Its defining
feature is a long upper and lower wick

Trading foreign exchange carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information
contained is provided as general market commentary, and does not constitute investment advice.

Candlesticks Page 2

Bullish Engulfing Pattern:

Consists of 2 candlesticks. The size of the first
candle is not important. The second candle
should be a large bullish candle that creates a
new low yet closes higher than the first candle.

Bearish Engulfing Pattern:

Consists of 2 candlesticks. The size of the first
one is not important. The second one should be a
large bearish candle the creates a new high yet
closes lower than the first candle.

Evening Star Pattern:

Consists of 3 candlesticks. The first candle is an up
candle. The second candle creates a new high and
is a relatively small candle. This can be a doji or
hammer type of pattern. The third candle is a
strong bearish candle that reverses the first two
candles.

Morning Star Pattern

:
Consists of 3 candlesticks. The first candle is a
down candle. The second candle creates a new
low and is a relatively small candle. This can be a
doji or hammer type of pattern. The third candle is
a strong bullish candle that reverses the first 2
candles.

Piercing

Line Pattern: Consists of 2

candlesticks where the first candle is a down candle.
Both candles should have fairly large bodies and
small or non-existent shadows. The second candle
is a bullish candle that closes above the midpoint of
the first candle.

Dark Cloud Cover: Consists of 2 candlesticks

where the first candle is an up candle. Both candles
should have fairly large bodies and small or nonexistent shadows.
The second candle is a
bearish candle that closes below the midpoint of the
first candle.
_______________________________________________________________________________________________________
Trading foreign exchange carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information
contained is provided as general market commentary, and does not constitute investment advice.