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Some bullish patterns
There are many candlestick patterns but only a few are actually worth knowing. The main
important patterns are the one that can help traders to know about the trend or the time
of trend change in the market. Here are some bullish patterns traders need to know about:
Engulfing Engulfing pattern consists of two candles.
The first day is a narrow range candle that closes down for the day. The second day is
a wide range candle that "engulfs" the body of the first candle and closes near the top
of the range. This means buyers are ready to take control of this stock.
Hammer Hammers can develop after a downtrend which
states the buyers are taking control of the market. It is a candle with short body and
long wick under the body. This is a very common buy sign for the traders.
Harami This pattern needs two candles. On the first
day you see a wide range candle that closes near the bottom of the range. The sellers
are still in control of this stock. Then on the second day, there is only a narrow range
candle that closes up for the day Piercing
This is also a two-candle reversal pattern where on the first day you see a wide range
candle that closes near the bottom of the range. The sellers are in control. On the
second day you see a wide range candle that has to close at least halfway into the prior
candle. This indicates a powerful reversal of the market trend.
Doji The doji is one of the most popular candlestick
patterns. The stock opens up and goes nowhere throughout the day and closes right at or
near the opening price. Quite simply, it represents indecision and causes traders to question
the current trend. This can often trigger reversals in the opposite direction. Dojis
inside complex patterns can indicate trend change of the market.