selena1
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Japanese candlesticks are a popular type of chart used in technical analysis by traders. They can provide insights into market sentiment and potential price movements based on the patterns they form. Here are some of the most powerful types of Japanese candles:
- Bullish engulfing pattern: This candlestick pattern consists of a small bearish candlestick followed by a larger bullish candlestick that completely engulfs the previous candle. This pattern is considered a strong bullish signal as it suggests a shift in momentum from bearish to bullish.
- Bearish engulfing pattern: The opposite of the bullish engulfing pattern, the bearish engulfing pattern consists of a small bullish candlestick followed by a larger bearish candlestick that completely engulfs the previous candle. This pattern is considered a strong bearish signal as it suggests a shift in momentum from bullish to bearish.
- Hammer: A hammer is a bullish reversal pattern that consists of a small real body with a long lower shadow and little to no upper shadow. It suggests that buyers have stepped in after a period of selling pressure and may be an indication of a potential reversal.
- Shooting star: The shooting star is the opposite of the hammer and is a bearish reversal pattern. It consists of a small real body with a long upper shadow and little to no lower shadow. It suggests that sellers have stepped in after a period of buying pressure and may be an indication of a potential reversal.
- Doji: A doji candlestick has a small real body with upper and lower shadows of similar length. It suggests that the market is indecisive and could potentially be in a state of flux. It is often used as a signal for a potential trend reversal or as an indication of market indecision.