Candlestick patterns

1 Dogi’s pattern

In this pattern candlesticks don’t really have a rectangular body because the closing price is equal to the opening price of a stock. It indicates extreme indecisiveness in the market. One should avoid trading during this pattern and should wait for further movements of the price because the prices are extremely volatile.

2 Engulfing pattern

Bullish engulfing pattern: In this case, a red candle is followed by a large green candle that completely engulfs or overlaps the prior red candle. The prior trend should be a downward trend which will then lead to reversal of the trend. 

Bearish engulfing pattern: In this case, a green candle is followed by a large red candle that completely engulfs or overlaps the prior green candle. The prior trend should be an upward trend which will then lead to reversal of the trend.

3 Morningstar pattern

It is a bullish trend reversal pattern. It appears at the bottom of a price trend. The prior trend of a small bodied candlestick should be a bearish trend which is then followed by a green candlestick signifying the reversal of the trend.

4 Evening star pattern

It is a bearish trend reversal pattern. It appears at the top of a price trend. The prior trend of a small-bodied candlestick should be a bullish trend which is then followed by a red candlestick signifying the reversal of the trend.