What is Candlestick analysis?

Candlestick analysis focuses on individual candles, pairs or at most triplets, to read signs on where the market is going. The underlying assumption is that all known information is already reflected in the price. The technique is usually combined with support & resistance.

What are candlestick chart patterns?

Now that you know what are candlesticks, let’s move ahead and understand the various types of candlestick chart patterns. Candlestick chart patterns are broadly divided into three types. Let’s understand each of these candlestick patterns in detail. A reversal candlestick indicates that a particular trend has come to an end.

What is a bullish candlestick pattern?

A bullish candlestick pattern is a useful tool because it may motivate investors to enter a long position to capitalize on the suggested upward movement. Also presented as a single candle, the inverted hammer (IH) is a type of candlestick pattern that indicates when a market is trying to determine a bottom.

Are candlestick patterns accurate?

Candlestick patterns portray trader sentiment over trading periods. There is no "most accurate" pattern as they should all be viewed as indicators of what bull or bear traders might be thinking—but some traders have preferences and act on specific patterns. What Is the 3 Candlestick Rule?