1. Marubozu ๐
Example:
A trader buys 1,000 shares of Company A after a positive earnings report, and no sellers resist the price increase. The price climbs steadily, forming a bullish Marubozu with no wicks.
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2. Doji โ๏ธ
Example:
Trader A sells 10 shares of Stock X at $100, while Trader B buys the same amount at $100. The market closes near its opening price, showing indecision between supply and demand.
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3. Hammer ๐จ
Example:
A stock drops to $50 during the day due to panic selling. However, Trader C and others see value and buy aggressively, pushing the price back to $60 by the close. The long lower wick forms a hammer.
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4. Inverted Hammer ๐๐จ
Example:
A stock opens at $50, rises to $60, but closes back near $50 due to resistance. Buyers attempted to push higher but failed, forming an inverted hammer.
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5. Shooting Star ๐
Example:
A stock opens at $90 and rallies to $100 as Trader D and others buy. However, profit-taking causes it to drop back to $92, leaving a long upper wick.
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6. Bullish Engulfing ๐ข๐
Example:
On Day 1, Trader E sells 100 shares, forming a small red candle. On Day 2, buying activity outweighs selling as buyers acquire 1,000 shares, forming a large green candle that engulfs the previous dayโs red.
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7. Bearish Engulfing ๐ด๐
Example:
A stock closes with a small green candle as a few buyers hold momentum. The next day, heavy selling from Trader F and others overwhelms buyers, forming a large red candle engulfing the green one.
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8. Morning Star ๐ โจ
Example:
- Day 1: A stock drops from $100 to $90 (large red candle).
- Day 2: Traders pause as the stock closes near $90 (small neutral candle).
- Day 3: Positive news leads Trader G to buy heavily, pushing the stock back to $100 (large green candle).
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9. Evening Star ๐๐ซ
Example:
- Day 1: A stock rises from $50 to $60 as buyers dominate.
- Day 2: It closes at $60, but with little movement as both buyers and sellers are indecisive.
- Day 3: Trader H sells heavily, driving the price back to $50, forming an evening star.
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10. Three White Soldiers / Three Black Crows ๐๏ธโซ
โก๏ธThree White Soldiers Example:
Over three days, Trader I consistently buys 100 shares daily, pushing the price from $50 to $60 through three consecutive green candles.
โก๏ธThree Black Crows Example:
Trader J sells 500 shares across three days, driving the stock price from $60 to $50, forming three consecutive red candles.
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