What is Engulfing Candlestick?

Engulfing is a trend reversal candlestick which consists of two candles, in which

the end candle (2nd candle) fully engulfs the entire body of the 1st candle.
Engulfing candle can differ in the form whether it’s an uptrend or downtrend. This
type of candlestick has 2 types:

Bullish Engulfing:
Bullish Engulfing candlestick found in a downtrend indicating the beginning of a
bullish trend (uptrend). In this candlestick, the 2nd candle will engulf the 1st red
candle's entire body and closed above previous candle highs. This indicates a huge
surge in buying pressure. Bullish Engulfing can appear in between continuous
uptrend also, it doesn’t mean to be traded but with some sort of strategy to increase
the profit factor and winning percentage.

How to trade Bullish Engulfing candlestick:

Buy after the candle fully closed and stop loss below the low of the candle and take
profit is up to next resistance.
Live Example

Bearish Engulfing:
It’s the just opposite of a bullish engulfing candlestick which found in an uptrend
indicating the beginning of the bearish trend (downtrend). Here 1st candle is small
and bullish while the next candle engulfs the previous candle's body and closes
below the low. Again, it can form anywhere but trade with strategy.
How to trade Bearish Engulfing candlestick:
Sell after the candle fully closed and stop-loss above the high of the candle and
take profit is up to next support.

What is Hammer Candlestick?

Hammer candlestick looks like a hammer and it’s a standalone candlestick which
often found at the bottom of a downtrend having a long wick below its body
indicating bulls taking control overbears and the market is most likely to reverse. A
hammer can be bullish or bearish, color doesn’t matter in it and works the same.
The hammer candle itself represents that initially bears pushed the price down
heavily and after that bull has taken over controls and the price closes nearby its
open price.
Hammer and Hanging Man look the same the only difference is formed in a trend.

How to Identity Hammer Candlestick?

Before considering any candlestick as a hammer check few characteristics:

• Open and close of the candlestick is not so far.

• The length of the candle should be twice or thrice of the body or more.
• The candle should appear after a good downtrend, not a short-term downtrend.

How to trade Hammer candlestick:

Buy after the closing of the candle and stop loss below the low of the candle and
take profits is up to you but we consider it till previous resistance.

Live Example

As you can see after Hammer candlestick market trading higher and higher.

What is Hanging Man Candlestick?

Hanging Man candlestick is the same as hammer candlestick the only difference
between is it often found on the top of the up-trending market, having a long wick
below its body and the market is most likely to reverse. Color doesn’t matter and
works the same.
How to Identity Hanging Man Candlestick?
• Open and close of the candlestick is not so far.
• The length of the candle should be twice or thrice of the body or more.
• The candle should appear after a good downtrend, not a short-term
downtrend.

How to trade Hammer candlestick:

Buy after the closing of the candle and stop-loss above the high of the candle and
take profits is up to you but we consider it till previous support.

Live Example

After Hanging Man appeared, we can sell a heavy fall giving us a good profit.
What is Inverted Hammer Candlestick?
Inverted Hammer is a single candlestick that looks like a turnabout hammer,
usually found in a downtrend consisting of a long wick/shadow on its upper body.
The Color of the candle doesn’t matter, it can be bullish or bearish. This candle
itself represents rejection from the lower price (or any important key level).

Inverted Hammer and Shooting look the same the only difference is formed in a
trend.

How to Identity Inverted Hammer Candlestick?

• Open and close of the candlestick is not so far.
• The length of the candle should be twice or thrice of the body or more.
• The candle should appear after a good downtrend, not a short-term
downtrend.

How to trade Inverted Hammer candlestick:

Buy after the candle fully closed and stop loss below the low of the candle and take
profit is up to next resistance.
Live Example

Very well and precise entry, the market is about to take out us of the trade, but
managed to in and end up with the profit.

What is Shooting Star Candlestick?

It’s the same candlestick as Inverted Hammer the only difference between these
candles is it found in an uptrend, having a long wick above its body. Again, here
color doesn’t matter and works the same. The candle itself represents that bulls
pushed the market aggressively and bears have taken over the market and closed
price near its opening price.

How to Identity Shooting Star Candlestick?

• Open and close of the candlestick is not so far.
• The length of the candle should be twice or thrice of the body or more.
• The candle should appear after a good uptrend, not a short-term uptrend.

How to Trade Shooting Star candlestick:

Sell after the closing of the candle and stop-loss above the high of the candle and
take profits is up to you but we consider it till previous support.
Live Example

Here a quick fall and heavy profits after shooting star appeared.

What is the Marubozu candlestick?

Marubozu is a Japanese candlestick pattern, consisting of a single candle.
Marubozu is a Japanese word that holds the meaning “Bald”. Also, Marubozu has
no upper and lower wicks which indicates that the instrument is traded heavily in
either direction. There are 2 types of Marubozu:

I. Bullish Marubozu:

Bullish Marubozu indicates that buyers are more interested in buying and the price
immediately spikes. Here Open is equal to Low and close is equal to High.
Usually, Bullish Marubozu appears in an uptrend which indicates that the trend is
most likely to continue while appearing in a downtrend implies a possible trend
reversal.
 I. Bearish Marubozu:

Bearish Marubozu represents traders are selling aggressively which results in a

spike down in price. The candle has its Open is equal to High and Close is equal to
Low. It usually appears in a downtrend which indicates a continuation of the trend,
while appearing in an uptrend implies possible trend reversal.
Let’s have a Real Example of Marubozu

Bullish Example:

You can see after a Bullish Marubozu Price moves higher and higher about 35%.
Bearish Example:

Check this a massive drop of 50% after Bearish Marubozu.

Note: Always Trade candlesticks patterns wisely with proper risk management else
your trading funds will always at high risk.