Candlestick Charting For Dummies, 2nd Edition

Chapter 6

Single-Stick Patterns That Depend on Market Context

IN THIS CHAPTER

Identifying market environments

Digging into doji details

Understanding spinning tops

Encountering belt hold basics

Taking a look at hanging men and hammers

In Chapter 5, I cover a few of the most basic, most easily defined single-stick candlestick patterns, which are either bullish or bearish indicators regardless of their location on a chart. For those patterns, the price action that occurs during the previous few days isn’t too significant.

But not all single-stick patterns are straightforward. Some extremely useful single-stick patterns rely heavily on their location on a chart as much as the shape that they form, because the signal depends on the trading activity that occurred before the single-stick pattern appears. Being familiar with these patterns and knowing how to identify and trade based on them adds a versatile weapon to your trading arsenal. That skill is what this chapter is about.

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