Glossary

Bearish Engulfing Pattern

A Bearish Engulfing Pattern is a two-candle candlestick reversal pattern that appears at the end of an uptrend, signalling a potential shift from bullish to bearish momentum. It is considered one of technical analysis' most reliable bearish reversal signals.

Candlestick Patterns

Candlestick patterns are formations created by one or more candlesticks that help traders understand market behaviour and predict possible price movements. These patterns are formed using the open, close, high, and low prices over a specific period.

Candlestick Timeframe

A candlestick timeframe refers to the duration or time interval that each individual candlestick on a chart represents. It defines how much market price action is displayed in each candle.

Candlesticks

Candlesticks are a type of chart used in trading that show the price movement of a stock or asset over a specific time period, such as 1 minute, 1 hour, or 1 day. Each candlestick displays the opening, closing, highest, and lowest prices, helping traders understand price action and market sentiment.

Dark Cloud Cover Pattern

The Dark Cloud Cover pattern is a bearish reversal candlestick pattern that typically appears at the top of an uptrend. It signals that the upward momentum might be slowing down and that a potential trend reversal to the downside could be coming.

Doji Candlestick Pattern

A Doji candlestick pattern is a type of candlestick that represents market indecision. It forms when a security’s opening and closing prices are nearly equal, resulting in a candle with a very small or non-existent body and long or short wicks (shadows) on either side.

Evening Star Pattern

The Evening Star is a bearish reversal candlestick pattern that typically appears at the top of an uptrend. It signals that the bullish momentum may be weakening, and a potential downtrend could begin.

Gravestone Doji

A Gravestone Doji is a bearish reversal candlestick pattern used in technical analysis. It forms when the open, low, and close prices are nearly identical, with a long upper shadow and little to no lower shadow.

Hammer Candlestick Pattern

A Hammer is a single-candle bullish reversal pattern that forms after a downtrend. It has a small real body near the top of the candle and a long lower shadow, with little or no upper shadow.

Hanging Man Pattern

The hanging man is a single candlestick pattern that appears after an uptrend and signals a possible reversal of a prevailing uptrend.

Inverted Hammer Candlestick Pattern

The Inverted Hammer is a single-candle bullish reversal pattern that typically forms after a downtrend. It features a small real body at the lower end of the candle and a long upper shadow, with little to no lower shadow.

Marubozu

Marubozu is a Japanese term meaning ‘bald.’ A perfect marubozu is a candlestick pattern with no upper and lower shadows (therefore appearing bald) represented by just the opening and closing prices, equal to the low and high prices.

Morning Star Pattern

The Morning Star pattern is a bullish reversal candlestick pattern that typically appears at the bottom of a downtrend. It signals that the downtrend may be coming to an end and a new uptrend could begin.

Piercing Line Pattern

The Piercing Line is a bullish two-candle reversal pattern that appears after a downtrend, where the second candle closes above the midpoint of the first bearish candle, indicating potential trend reversal.

Spinning Top Candlestick Pattern

A Spinning Top is a candlestick pattern characterised by a small real body and long upper and lower shadows. It indicates indecision in the market, where neither buyers nor sellers gain control.

Tweezers Patterns

Tweezers are a candlestick pattern that signals a possible reversal in trend. It forms when two candles have almost the same high (tweezer top) or the same low (tweezer bottom), showing that the price failed to move beyond a certain level.