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Charting Secrets: Trade Like a Machine and Finally Beat the Markets Using These Bulletproof Strategies, 2nd Edition by Louise Bedford

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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 ...

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