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Basic candlestick patterns
This section will cover some basic candlestick patterns, but first you should become familiar with some basic candlestick terms.
A long candle is a very long body when compared to other most recent candles.
A short candle is of course, just the opposite and usually indicates consolidation. It occurs when trading was confined to a narrow range during the period. The term white bodies refer to periods of extreme buying pressure.
Black bodies refer to just the opposite, period of extreme selling pressures.
Long Days Pattern
Candlesticks in a long days pattern are shorter than the actual body. They indicate the large differences between the price at the time the market opened for the day and the price at which is closed.
Short Days Pattern
Candlesticks in short day patterns will be short lines within a short body. These lines represent the minimal changes between prices at the time the market opened for the day and the price at closing.
A Marubozu pattern indicates that there are no shadows present in the bodies.
A White Marubozu is represented by a long white body that doesn't contain any shadows. It's usually the first indication of a bullish trend, but can indicate the trend will continue or reverse.
A Black Marubozu is represented with a long black body and generally indicates a bearish continuation period or reversal pattern.
Spinning Tops Pattern
When the shadows are longer than the body itself, it's referred to as a Spinning Tops pattern. In this type of market pattern, the color of the body isn't actually important. The pattern is an indication that there is a lot of indecision between the bearish and bullish market trends.
Stars and Rain Drops Patterns, along with reversal patterns are some of the more complicated patterns in the market.
A Star pattern forms whenever a small body peaks above the long body of the previous market day.
A Rain Drop pattern depicts a drop; it appears when small bodies fall just below the lowest peaks on the long body of the previous day.