Hello everyone.
Hope everyone is doing good. I am a newbie and learning chart patterns. I wanted to know the difference between:
Aren’t they same?
Any insights will be helpful.
Thanks in advance.
Hammers are found in downtrends: hanging man and shooting stars are found in uptrends.
The hammer is often a reversal signal, indicating the end of the uptrend. The shooting star is often just a continuation signal.
Note that these conclusions, from Thomas Bulkowski at thepatternsite, are mostly based on stock daily charts, and bear in mind stock markets have a closed session overnight, forex does not. This means that its dangerous to apply candlestick patterns from stocks straight and literally into the forex market.
Why worry about all those types of candles? Just because the school of pipsology tell you about them? Carefully look back in history with your charts. None of these can reliably tell you what will happen. You might as well just flip a coin and you might have better chance. Go and learn what really drives the market.
Explanations from Steve Nison, the man who introduced Japanese candlesticks to the western world.
The following copy-and-paste is from Nison’s Japanese Candlestick Charting Techniques (1991).
Note that Nison frequently refers to individual candles as “lines”. (Not knowing that is sometimes confusing to readers who are not familiar with his writing.)
Pages 28-29
Page 70
What’s with the snarky tone, pal ?
Seven whole months of experience, and now you’re an expert ?
