We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
Candlesticks patterns 69
4 few are commonly noted in roe
irate predictions (Thomsett, 2015).
sand ve erties on tht particular
ing period (Murphy, 1999, Thomsett, thid), It may be noted that the longer the
body of the candlestick, which reflects the difference between the open and close
prices, the greater is the breadth of trading. Again, the longer the shadows, upper
or lower, more is the volatility. A long upper or lower shadow represents efforts by
traders to take the price ia that specified direction and the failure to do so. Thus, a
candle with a very long upper shadow represents the strong effort of bulls to take
the market up and the failure of prices to move up to that level. Similarly, a candle
with a very long lower shadow represents the efforts of bears to take the market
down and the capacity of prices to bounce up from that level. Shadows therefore
speak volumes on the sentiment in the market.
While there are more than 100 candlestick patterns, all candlestick patterns
evolved out of six basic candlestick formations (Thomsett, Ibid). These are elabo-
rated in Figures 4.2a and 4.2b.
candlestick patterns that we can study, only
FIGURE 4.24
