Japanese Candle Sticks

Question 1

Doji candles

Answer 1

Represents balance between buyers and sellers-neither has gained control

Shows indecision in the market

The market has tried to push away but always taken back to the same spot

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Cross like candlestick

Question 2

The dragonfly doji

Answer 2

The letter T candlestick

Market opens and closes at the same level sellers initially have control and made a new low

Towards the end buyers take control and ends in balance where neither take control

Opposite of gravestone doji

Question 3

Gravestone doji

Answer 3

Opposite to dragonfly doji

Upside down T

Opens and closes at same level

Start buyers in control made a new high

Towards the end sellers gain control and candle closes at same level it opened

Question 4

Bullish marubozu

Answer 4

The opening was the lowest point

Buyers had full control over the period of time

Closed in favour of bulls

Long body small to no wicks

Indicates a bullish continuation or bullish reversal

Question 5

Bearish marubozu

Answer 5

Opening was the high of the candle

Sellers had full control over the period of time

Closed bearish

Candle with no wick

Indicates a bearish continuation or bearish reversal

Question 6

Long wicks vs short wicks

Answer 6

Wicks provide a story of what happened during the session

Lower wick represents the lows higher reps highs

If the longest wick is facing down the sellers initially had control but there was a change and closed a strong bullish candle

If the longest wick is facing up buyers originally had control but lost out to sellers in the end

Question 7

Short bodies vs long bodies

Answer 7

The longer the body the stronger force of either buyers or sellers

A bigger bodied green candle after a series of red can mean 2 things:

1. Pull back/retrace
2. Could see a reversal

Describes how much momentum there is in the market

Question 8

Spinning tops / tweezer toos

Answer 8

Represents indecision

Small bodied candles with small wicks

Neither buyers or sellers have control

Price could go either way
This could be a story of a trend or a continuation

Usually followed by strong movements

Question 9

The hanging man

Answer 9

Usually Forms at the end of an uptrend

Created when big sell off

Buyers regain control creating a big wick downwards

Early indication of buyers losing control

Look for this candle around key areas of resistance/ followed by a sell off