Chapter 3: Introduction to Candlestick Patterns

Chapter 3 - Introduction to Candlesticks

As the saying goes - 

“History goes a long way in deciding the future”​

Similarly, the historical prices of the shares of a company goes a long way in deciding the futures movement of share prices​

With the help of Candlesticks, we can understand past trends and have a view of future price movements. ​

Overview:

The most sought-after and the easiest form of technical analysis tools are the candlesticks charts. 

But before learning candlesticks, let us try and understand the history associated with the development of candlesticks as technical analysis patterns.

As the name suggests, candlesticks originated from Japan. And the earliest use of this pattern can be stated back to the Japanese rice merchant (Homma Munehisa)  in the 18th century. 

But the concept of candlesticks was introduced to the world of trading in the 1980s by a trader named Steve Nison. He even went on to author the first-ever book on candlesticks titled “Japanese Candlestick Charting Techniques”

Through this course, we will be trying to understand the various candlestick patterns (Single Candlestick and Multi Candlestick)

 Following are some of the Single Candlestick Patterns covered in this course:

  • Spinning Top
  • Marubozu
  • The Doji Pattern
  • The Hammer Pattern
  • The Hanging Man
  • The Shooting Star

And few Multi Candlestick Patterns which will be covered in this course include:

  • Engulfing Pattern
  • Piercing Pattern
  • Dark Cloud Cover
  • Harami Pattern
  • Candle Gaps
  • Morning Star
  • Evening Star
  • Three White Soldiers
  • Three Black crows
  • Cup and Handle Formations
  • Tweezer Formations