Are you using candlestick charts as your default chart type for price action analysis?
Most likely, the answer is yes. In that case, why not make the most out of it by mastering candlestick patterns?
According to Thomas Bulkowski’s Encyclopedia of Candlestick Charts, there are 103 candlestick patterns (including both bullish and bearish versions). While the encyclopedia is great for reference, there is no need to memorise the 929-page compendium.
Simply learn these 10 candlestick patterns for an illuminating foundation email database.What does it mean?
A Marubozu that closes higher signifies powerful bullish strength while one that closes lower shows extreme bearishness.
Just remember that Harami means pregnant in old Japanese. The first candlestick is the mother, and the second candlestick is the baby.
Focus on their bodies. The body of the baby bar must be entirely within the body of the mother bar.
Typically, in a bullish Harami, the first bar closes lower than it opens while the second bar closes higher. Similarly, in a bearish Harami, the first bar closes higher than it opens while the second bar closes lower.
The Marubozu is more useful as a learning tool than as a pattern for trading. Together with the Doji candlestick, they highlight the extremes of the candlestick spectrum.