The white marubozu candlestick pattern is a long white body with no shadow on either end and is an extremely strong pattern when you consider how it is formed during stock analysis. It opens on the low and immediately heads up. It continues upward until it closes, on its high. Counter to the black marubozu, used in Japanese candlesticks, it is often the first part of a bullish continuation pattern or bearish reversal pattern. It is called a Major Yang or Marubozu of Yang during stock analysis with candlestick charts.

The white marubozu candlestick pattern signifies the formation of positive sentiment which makes the price continue to rise from opening until closing. It is then that the lowest price is equivalent to the opening price and the highest price is equivalent to the closing price.

When the white marubozu occurs during stock analysis, it signifies that the day consisted of aggressive buying wherein the buyers were in control. This indicates that buying could continue to occur the following day as well. Furthermore, if over the next few days the price does not dip below the low of the marubozu that you previously used for the buy signal, then some might say that this indicates that the buy signal is indeed legitimate.

Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns used in stock analysis. All candlestick patterns have credible probabilities of indicating correct future direction of a price move. The shooting star candlestick is one of the 12 major patterns used in candlestick charting. The definition of “major” has two functions. Major in the sense that they occur in price movements often enough to be beneficial in producing a ready supply of profitable trades. They also clearly indicate price reversals with strength enough to warrant placing trades.

Continue to learn more about the major candlestick signals and read about the Inverted Hammer signal that is used in stock analysis and other types of analysis.

In Japanese, Marubozu means close cropped or close-cut and this candlestick pattern has no upper shadow and no lower shadow. The real body of this pattern could be short or long as well as black or white. Its meaning reflects the fact that there are no shadows extending from either end of the body and it exhibits a strong trend within a specific amount of time. Bald or Shaven Head are more commonly used in candlestick chart analysis. During chart analysis using candlestick charts, the marubozu is more relevant when it occurs at a breakout point and it can also occur anywhere on a chart.

As stated above, the marubozu can be a white or black candlestick and it indicates trending markets that are created when supply and demand rules the market. Again, the marubozu may appear at any time when candlestick charting, however due to the nature of this candlestick, the marubozu provides more meaning when occurring at the breakout. During chart analysis, The black marubozu candlestick is formed as a long black body that is strong during a downtrend and indicates that supply is more than demand while the white marubozu candlestick is formed as a long white body that is strong during an uptrend and indicates demand is more than supply.

The psychology built into a major candlestick signal is simple common sense investment philosophy. When you learn how to utilize the candlestick signals correctly during chart analysis you now have the knowledge to improve your trading techniques for those trading entities you want to trade. You do not have to depend on canned programs that sometimes work and sometimes don’t work and you do not have to buy or sell stock recommendations blindly based on a research analyst’s recommendations.

The candlestick signals provide guidance as to what investors are actually doing at a certain point in time. Learn the 12 major candlestick patterns as well as the secondary patterns and your investments perceptions will greatly improve.

Continue to learn about candlestick signals and chart analysis and read about the Dark Cloud Cover.

When analyzing candlestick charts, short days can be interpreted by the same analytical process as the long candles. (See candlestick charting – long days). There are a large percentage of the trading days that do not fall into either of these two categories. The short day pattern is short in length but is not necessarily named for its relation to the duration of a trade. The short day candlestick pattern consists of only one candlestick and it opens and closes inside of the preceding candlestick’s range. It is entirely contained by the previous candlestick and it is neither bullish nor bearish.

When using candlestick charts it is important to know that the short day pattern can occur in a variety of situations. For example short day patterns can occur during a trend, at the end of a trend and at the beginning of a trend as well. When alone, it only signifies a small range and that the time period was neither bullish nor bearish. Due to this, the short day pattern is not really used as a trade entry or exit pattern but instead is encompassed in other candlestick patterns. This provides those candlestick patterns with more relevance. It can also convey the upcoming price movement when using candlestick charts.

Recognizing and understanding the psychology behind candlestick charts will provide completely new insights for investors to understand optimal times to buy and sell. Japanese rice traders realized that prices do not move based on fundamentals but instead that they move based on the investor perception of those fundamentals.

The psychology built into a major candlestick signal is simple common sense investment philosophy. When you learn how to utilize the candlestick charts correctly you now have the knowledge to improve your trading techniques for those trading entities you want to trade. You do not have to depend on canned programs that sometimes work and sometimes don’t work and you do not have to buy or sell stock recommendations blindly based on a research analyst’s recommendations. The candlestick signals provide guidance as to what investors are actually doing at a certain point in time. Learn the 12 major candlestick patterns as well as the secondary patterns and your investments perceptions will greatly improve.

Continue to learn about candlestick patterns and read about the Dark Cloud Cover, the hammer signal, the bearish engulfing, and others.

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.

The matching low candlestick pattern is similar to the homing pigeon candlestick pattern. The exception is that both days of this two-day pattern’s close are at the same low level. Since both day’s black (or red) candles close at the same level, this matching low signal indicates that the bottom is hit after a long downtrend. See criteria for matching low candlestick pattern below.

Criteria for Matching Low

• The body of the first candle is black (or red) and the body of the second candle is black (or red).
• The downtrend is evident for a good period of time and a long black (or red) candle occurs at the end of the trend.
• The second day opens higher than the close of the previous day and it closes at the same close as the prior day.
• For a reversal signal, further confirmation is required to indicate that the trend is moving up in direction.

Pattern Psychology Behind the Matching Low
After a strong downtrend is in effect, and after a long black (or red) candle occurs, the bulls open the price higher than the previous day’s close. The shorts get concerned and start to cover; however, the bears still have enough control to close the price at the low of the day. Again this low is the same low as the close of the previous day. The psychological impact for the bears is that the second day couldn’t close below the previous day’s close and it causes concern that this is a support level.

Throughout his investment career, Stephen Bigalow has directed his investment acumen towards developing improved methods for extracting profits from the investment markets. His research, encompassing all fundamental and technical methods, resulted in verifying that Candlestick analysis was superior to any other method.

One of the biggest misconceptions of investors is that prices move based upon fundamental reasons when in fact prices move based upon the “perception” of fundamental reasons. The Japanese Rice traders discovered this many centuries ago. Why do prices go down when good news is announced? The answer is that the anticipation of that good news was already built into the stock price.

Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.

When witnessing a ladder bottom candlestick signal you will notice that the downtrend finishes with four consecutive black (or red) candles. Each black (or red) candle closes lower than the previous day. The fourth day is different since it opens and trades higher during the day and closes the day low. The following day opens higher than the open of the previous day, there is a gap up, and it continues to head up in direction all day. The final day of the signal closes higher than the trading range of the past three days.

Criteria for the Ladder Bottom Signal

• Similar to the three black crows pattern, the beginning of the signal has three black (or red) candle days, each with lower opens and closes than that of the previous day.
• The fourth day resembles a reverse hammer signal, which opens and then trades up during the day before it then closes on its low.
• The final day opens above the open of the previous day’s open. There is a gap up and it continues upward for the rest of the day. It finally closes above the trading range of the previous three days.

Pattern Psychology Behind the Ladder Bottom Candlestick Signal
After a strong downtrend is in effect for a period of time, there is a day when prices try to climb back up to the previous day’s high. This gets the bears attention even though it closes on the low that day. When it opens up much higher the following day, the bears start to scramble to cover, and the bulls begin to take control. If volume increases noticeably on the final day, then that is a good indication that the bulls and the bears exchanged their positions.

Candlestick patterns identify where money is flowing in and out of stocks/sectors. Being able to identify and understand the investor psychology that creates the candlestick signals produces a huge advantage. It allows an investor to participate in stock investments that have an extremely high probability of moving in the right direction.

Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.

Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.

Description
The homing pigeon is the same as the harami (see bullish harami and bearish harami signals), except for the color of the second day’s body. The homing pigeon is composed of a two-candle formation in a down trending market. Both candles are the same color as the current trend. The first body of the pattern is a long body and the second body is smaller. The open and the close of the second day occur inside the open and the close of the previous day. When a homing pigeon present itself it indicates that the trend is over.

Criteria for Homing Pigeon:

• The body of the first candle is black (or red) and the body of the second candle is black (or red).
• The downtrend is evident for a good period of time and a long black (or red) candle occurs at the end of the trend.
• The second day opens higher than the close of the previous day, and closes lower than the open, but still above the closing price of the prior day.
• Unlike the western inside day, just the body needs to remain in the previous day’s body. Please note that the inside day requires both the body and the shadows to remain inside the previous day’s body.
• For a reversal signal, further confirmation is required to indicate that the trend is moving up.

Signal Enhancements for the Homing Pigeon
The higher the second candle closes up on the first black (or red) candle, the more convincing it is that a reversal occurred.

Pattern Psychology
After a strong downtrend has been in effect and after a long black (or red) candle, the bulls open the price higher than the previous close. The shorts get concerned and start to cover. The price finishes lower for the day but not as low as the previous day. This is enough support needed so that the short sellers take notice that the trend is violated. A strong day following would convince everyone that the trend is reversing. Usually the volume is above the recent norm due to the unwinding of short positions.

Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.

Description 
The stick sandwich candlestick pattern looks somewhat like an ice cream sandwich. It consists of two black (or red) candles with a white (or green) candle in between. The closing prices of the two black (or red) candles are equal. This demonstrates an obvious support price and the probability of a reversal in the trend is high.

Criteria for Stick Sandwich Candlestick Pattern

• A downtrend is concluded with a large black (or red) candle followed by a white (or green) candle. The white (or green) candle opens above the black (or red) candle’s close, and it closes above the black (or red) candle’s open.
• The final day completely engulfs the white (or green) candle and closes at the same level as the previous black (or red) candle.

Pattern Psychology Behind the Stick Sandwich
The Bears are in control for a while. At the end of the downtrend, the last black (or red) candle is followed by a large white (or green) candle. The white (or green) candle opens higher than the close of the last black (or red) candle. It trades up for the rest of the day and closes above where the previous day opened. This action makes it clear to the Bears that the downtrend may be coming to an end. The following day opens higher but trades down for the rest of the day. It cannot close lower than the previous close of two days prior, which are low. The shorts take notice and start to cover any buying strength over the next couple of days.

Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.

Continue to learn about more candlestick patterns to see how it can greatly improve your profits! Primary candlestick patterns should be understood first (such as the doji and hanging man patterns). Once you have a basic understanding of the primary signals, move onto the secondary candlestick signals and then eventually the continuation pattern such as this upside tasuki gap pattern.

The average investor does not have to be dependent on the investment professional when utilizing candlestick patterns. 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.

Please continue to learn how to identify each different candlestick trading pattern as well as what that pattern indicates is occurring in the markets.

The upside gap three methods is a simplistic pattern, similar to the upside tasuki gap and it occurs in a strong trending market. In an up-trend, a gap occurs between two white (or green) candles, and the final day opens within the top white (or green) body. It closes in the lower white (or green) body which then fills the gap between the first two candles.

Upside Gap Three Methods Image

Criteria for Upside Gap Three Methods:

• In an up-trend two white (or green) candles form
• The second candle in the formation gaps above the first
• The third day opens lower, into the body of the top white (or green) candle and closes into the body of the first white (or green) candle.

Pattern Psychology behind the Upside Gap Three Methods
The market is moving in a direction and then a gap appears between two white (or green) candles. Keep in mind that gaps are significant in that they eventually have to be filled. The fact that the gap fills immediately leads investors to think that the pullback is just a profit-taking pullback. The trend should resume immediately after the gap is filled.

The psychology built into a major candlestick signal is simple common sense investment philosophy. When you learn how to utilize the candlestick patterns correctly you now have the knowledge to improve your trading techniques for those trading entities you want to trade. You do not have to depend on canned programs that sometimes work and sometimes don’t work and you do not have to buy or sell stock recommendations blindly based on a research analyst’s recommendation.

Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All candlestick patterns have credible probabilities of indicating correct future direction of a price move.

Candlestick signals identify where money is flowing in and out of stocks/sectors. Being able to identify and understand the investor psychology that creates the candlestick signals produces a huge advantage. It allows an investor to participate in stock investments that have an extremely high probability of moving in the right direction.

Throughout his investment career, Stephen Bigalow has directed his investment acumen towards developing improved methods for extracting profits from the investment markets. His research, encompassing all fundamental and technical methods, resulted in verifying that Candlestick analysis was superior to any other method.