A candlestick depicts the battle between Bulls (buyers) and Bears (sellers) over a given period of your time. All known information is reflected in the price. The connection between the open and shut is taken into account vital information and forms the essence of candlesticks.
Candlesticks are so named because the rectangular shape and lines on either end resemble a candle with wicks; and we will be studying most relevant double candle stick reversal pattern. Each candlestick usually represents one day’s worth of price data about a stock. Double Candlestick Pattern involves two consecutive candlesticks and these two consecutive candlesticks if interpreted correctly give excellent trading insight.
The trading signal is generated based on two day’s trading action. The length signifies the range for the trading day; however trades have to be qualified based on the length of the second day’s candle and formations of two candles as well. One should avoid trading based on subdued short candles without confirmation candle.
Candlestick patterns are often made from one candle or multiple candlesticks, and may form reversal or continuation patterns. A number of the foremost useful & popular double candlestick patterns are mentioned below:
1. Bullish Engulfing
2. Bearish Engulfing
3. Bullish Harami
4. Bearish Harami
5. Tweezer Top
6. Tweezer Bottom
7. Dark cloudiness
8. Piercing Line
Double Candlestick patterns are depicted within the section above; there are more complex and difficult patterns of quite two candlesticks which are identified since the candlestick charting method’s inception.