1, Rules for Using a Single Candlestick
Candlesticks were invented by a Japanese rice merchant, Homma Munenori, in 1705, marking four price levels: opening, highest, lowest, and closing.
Bullish Candlestick: Represented in red, indicates a bullish trend after a bullish candlestick, suggesting to buy long in the stock market, known as a bull market, and called appreciation in the currency market. In Hong Kong, it is referred to as 'Zha'.
Bearish Candlestick: Represented in green, indicates a bearish trend after a bearish candlestick, suggesting to sell short in the stock market, known as a bear market, and called depreciation in the currency market. In Hong Kong, it is referred to as 'Gu'.
1, Bullish Candlestick with Upper and Lower Shadows
Indicates support below and resistance above. Overall buyers are dominant. Commonly appears at market bottoms and during upward trends. The longer the upper shadow, the greater the resistance above; the longer the lower shadow, the stronger the support below; the longer the real body, the stronger the buying power.
2, Bearish Candlestick with Upper and Lower Shadows
Indicates support below and resistance above, with overall sellers being dominant. Commonly appears at market tops and during downward trends. A long upper shadow indicates significant resistance above; a long lower shadow indicates strong support below; a longer real body indicates stronger selling power.
3, Doji Star Pattern
Indicates that the opening price and closing price are the same, with buying and selling forces temporarily in balance.
4, T-shaped
Also a variation of the Doji, indicating that the opening price, closing price, and highest price are the same, while the lower shadow indicates some support below, suggesting a potential reversal.
5, Linearly Shaped
This pattern indicates that the opening price, highest price, lowest price, and closing price are at the same level, meaning there has been no change in the exchange rate during this period. It may appear in minute charts but is unlikely in longer-term candlestick charts.
6, Hammer
In a long-term downtrend, the appearance of a hammer signals that the downward trend may be ending, making it a reliable bottom pattern. It can be a bullish hammer or a bearish hammer. There is almost no upper shadow, and the lower shadow is more than twice the real body.
7, Hanging Man
A Hanging Man is a candlestick with a long lower shadow and a small real body that appears in an uptrend. It's a type of reversal signal.
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