Single Candlestick Patterns - Technical Analysis - 1

Marubozu :

Marubozu is a Japanese word which means "bald". It can appear anywhere in the chart.
Marubozu is either bullish or bearish.
Identification: It has no or very little upper and lower shadow.

• Bullish Maruzobu in uptrend shows trend continuation.
• Bullish Maruzobu in downtrend shows trend reversal.
• Bearish Maruzobu in downtrend shows trend continuation.
• Bearish Maruzobu in uptrend shows trend reversal.

Points to remember:

-  Stop loss is other end of the candle. Like:  In bearish candle stop loss will be open price.
-  If Maruzobu is extremely small or extremely large then one should avoid trading.

The Spinning Top:

Identification: Unlike Marubozu it has good upper and lower shadow with a small real body. Like below image -

At any particular time it convey indecision in the market. Both bulls and bears are equal in the strength.

If market is uptrend and spinning top appears it means uptrend either could be about to end or it will just taking rest and continue after this. same with downtrend.

Since chances of both the events 50-50, we can invest 50% of amount in the market and after confirmation invest rest 50%.

Points to remember:

Upper and lower shadow should be almost equal.

The Dojis:

Identification: Dojis are almost same as Spinning tops only with one difference that it has almost no real body. Open price should be almost equal to close price. (Below Image)

There are three types of Doji. All of them have vital information about wherever they appear.
Doji:  Just like spinning top it also shows indecision in the market. Generally it appears along with Spinning Top. If it appears along with Spinning Top at any trend then it shows the tendency of trend reversal.

Rest will be explained with the below pattern.

Paper Umbrella: 

Identification: Paper Umbrella have long shadow at one side and other side with almost no shadow. Look at the below image:

Body should be small and color does not matter with this pattern.

It has two different names based upon where it appears. If it appears during bullish trend it is called Hanging man and if it appears during bearish trend it is called Hammer.

So if you find a hammer in a bearish trend it shows that trend is about to end and bulls are entering in the market.

And if you find a Hanging man in a bullish trend then it shows that bullish trend is about to end and soon there will be trend reversal.

I would prefer Hammer over Hanging man while treading.

Points to remember: 

Body should be small and shadow must be more than 2x of body. 

The shooting star: 

Identification:  It looks like opposite Paper Umbrella. It gives a powerful reversal sign. Since Shooting star is a bearish trend so prior trend should be a bullish one.

Points to remember:

In this also Body should be small. and shadow must be more than 2x of the body.

---------This Will be all about Single Candlestick pattern--------