4 powerful Chart pattern....

I would like to start this new topic to discuss and understand more about from seniors and owner of this forum....
I request you all to participate and take part in discussion to understand the topic / subject more accurately....

There could be more other pattern of charts but as per my small knowledge I am more comfortable with these 4 very important chart patterns. ...

Seniors pls correct me if any thing wrong or incomplete....

Regards.

And Happy & profitable Trading..

Bhupesh

 

HAMMER-HANGING MAN - INVERTED HAMMER PATTERNS

1. HAMMER (BULLISH)




Explanation

The Hammer candlestick formation is a significant bullish reversal candlestick pattern that mainly occurs at the bottom of downtrends. This pattern appears after or during a downtrend. It is a single candlestick pattern.

The market is characterized by a prevailing downtrend.

The small real body is at the upper end of the trading range.

The color of the small body is not important but a white candle has slightly more bullish implications than the black body.

It is easily identified by the presence of a small body with a shadow at least two times greater than the body.

There should be no upper shadow, or if there is, it should be very small.

The following day needs to confirm the Hammer signal with a strong
bullish day.

Hammer pattern is a bottom reversal pattern which is highly reliable for reversing a downtrend to an uptrend.

The overall direction of the market is bearish, characterized by a downtrend.

The market opens and then sells off sharply. However, the sell-off is abated and the market returns to, or near, its high for the day with a closing price at or near to its high for the day which causes the long lower shadow.

The longer the lower shadow, the higher the potential of a reversal
occurring.

The long lower shadow now has the bears questioning whether the decline is still intact. A higher open the next day would confirm that the bulls had taken control.

Long positions can be initiated if there is a large gap up or a higher close the next day of Hammer, which is considered as a confirmation of reversal of trend.

 

Lets discuss it first then I will post 2nd pattern....