For candlestick charting, a long day represents a large price move from open to close and “long” represents the length of the candle body and is not related to the length of the actual trade. What qualifies a candle body to be considered long? That is a question that has to be answered relative to the chart being analyzed. The recent price action of a stock will determine whether a “long” candle has been formed when candlestick charting. Analysis of the previous two or three weeks of trading should be a current representative sample of the price action.
When candlestick charting, the long day pattern is bullish or bearish and is contingent upon on whether the time period involved mainly bullish or bearish trading. The long day is one of the single candlestick patterns that opens and closes outside of the previous candlestick’s range. Therefore it completely contains the previous candlestick within its length
The long day pattern can occur in a variety of different situations. For example, when candlestick charting, a long day pattern may occur at the end of a trade, during a trend, or at the beginning of a trend. Therefore, the long day is not often used as a trade entry or exit pattern. The long day is also contained within other candlestick patterns to provide more relevance and also to offer a signal for the upcoming price movement.
Candlestick patterns are clear and easy to identify demonstrating highly accurate turns in investor sentiment. Japanese candlestick patterns consist of approximately 40 reversal and continuation patterns which all have credible probabilities of indicating correct future direction of a price move. However the twelve major candlestick patterns provide more than enough trade situations to most investors. There are only twelve major patterns that should be committed to memory but this does not mean that the remaining secondary patterns should not be considered. In fact those signals are extremely effective for producing profits. Reality however demonstrates that some of them occur very rarely when candlestick charting.
The average investor does not have to be dependent on the investment professional when candlestick charting. Professional recommendations are not always in your best interest at the forefront. Whether totally unfamiliar with investment concepts or very sophisticated in investment experience, the Japanese Candlestick trading formations are easily utilized. The signals and patterns are easy to see and their interpretations are reliable.
Continue to read about the Doji which is one the most revealing candlestick signals.
