Appendix A: Candlestick basics
Information in this appendix is taken from my book The Secret of Candlestick Charting.
Candlestick patterns fall into two broad groups, continuation patterns and reversal patterns. Continuation patterns suggest that the share will continue over the short term in a particular direction. Reversal patterns imply that a share is likely to change direction completely or simply flatten into a sideways trend (figure A.1 ).
Reversal patterns will be the focus for the following discussion.
Some common candlestick patterns
The shooting star
This pattern displays an upper tail length that is at least two times the length of the real body (figure A.2 ). When a gap (or a hole in the share price action) is present between ...