Purpose of Candlestick Pattern in the Stock Market

By | August 20, 2021

We Know prices fluctuate every second in the stock market. These Candlestick charts give a better understanding of price flow aa high, low, opening time, and closing time.

After launch of stocks in primary market, you may start IPO trading process. Also when stocks are listed in Future and Options you get good momentum to make a trade and there it became very important to learn about candlestick patterns.. With these patterns, you can make predictions and trade effortlessly. Trade experts advise the investor about the rocking, foreign exchange, commodity, and equity price flow by analyzing the candlestick patterns.

The candlestick body color gives you a better understanding of closing price and opening price.

  • Black and full candlestick- closing price
  • Real body-color candlestick- opening price

What is Bullish Pattern in Candlestick charts?

If the closing price period is greater than the opening price it is considered a bullish pattern. If you are noticing the buying pressure it is also considered a bullish pattern.

If the opening price period is comparatively less than the closing price it is a bearish pattern.

What is Bearish Pattern in Candlestick charts?

The selling pressure is considered a bearish pattern.

Bullish engulfing pattern is the most powerful and trending candlestick pattern to simplify the movement of price. 

The low to high price action range can be understood by the shadows that are displayed at the end of the candlestick.

  • Upper shadow-high price
  • Low shadow- low price 

There are different types of candlestick patterns available for different types of trading. Bullish and Bearish patterns are divided into subcategories. Traders plan their strategies by analyzing these patterns.

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