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 • Types of analysis

CLASS-II • Candlestick
CANDLSTICKS • Single candlesticks

• Double Candlesticks

• Tripple Candlesticks

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TYPES OF ANALYSIS
There are three types of analysis:
i. Technical analysis:
Technical analysis is the framework in which traders study price movement using different types of chart. The theory is that
a person can look at historical price movements and determine the current trading conditions and potential
price movement. Now, have you ever heard the old adage, “History tends to repeat itself“?
Well, that’s basically what technical analysis is all about! Technical analysts look for similar patterns that have formed in the
past and will form trade ideas believing that price could possibly act the same way that it did before.
Technical analysis is NOT so much about prediction as it is about POSSIBILITY.

i. Fundamental analysis:
Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect
currency prices. For example, let’s say that the U.S. dollar has been gaining strength because the U.S. economy is improving.
As the economy gets better, raising interest rates may be needed to control growth and inflation.Higher interest rates make dollar-
denominated financial assets more attractive. In order to get their hands on these lovely assets, traders and investors have to buy
some U.S. dollars first. This increases demand for the currency. As a result, the value of the U.S. dollar will likely increase against
other currencies Due to its demand This requires a good understanding of macroeconomics and geopolitics.

iii. Sentemental analysis:

Sentiment analysis is used to gauge how other traders feel, whether it’s about the overall currency market or about a particular
currency pair. Each trader has his or her own thoughts and opinions, which are expressed through whatever position they take, helps
form the overall sentiment of the market regardless of what information is out there. It’s up to you to gauge how the market is feeling,
whether it is bullish or bearish.Then you have to decide how you want to incorporate your perception of market sentiment into
your trading strategy.
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INTRO OF CANDLESTICK
Candlesticks Charts
The candlestick chart is a variation of the bar chart.
A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and
closing prices of a security for a specific period
Many traders like this chart because not only is it prettier, but it’s easier to read.

There are 5 basic infos you are getting by watching a single

candlestick:

• COLOUR:It represents Either prices moved up or down

• OPEN: The little horizontal line on the left is the opening price
• HIGH: The top of the vertical line defines the highest price of the time
period
• LOW: The bottom of the vertical line defines the lowest price of the time
period
• CLOSE: The little horizontal line on the right is the closing price(Most
Important Part)

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 SINGLE CANDLESTICKS
What is Doji
Doji candlesticks have the same open and close price or at least their bodies are extremely short. A Doji should have
a very small body that appears as a thin line.
Doji candles suggest indecision or a struggle for turf positioning between buyers and sellers.
Dragonfly Doji is a Bullish Reversal candle appears at the Bottom of the Down trend
Gravestone Doji is a Bearish Revesal pattren appears at the Top of the Up trend.

How to trade Doji

As told abve it is an indicision candle so better to trade it along with different
comfirmations like near trendline or with an oscilator or just by price action its
ENTRY would be at closing of its next opposite candle and SL would be at Low
of the doji in case of Bulish reversal and at high of doji in casse of bearish
reversal.

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SINGLE CANDLESTICKS
What is Spinning Top/Bottom
A spinning top is a candlestick formation that signals indecision regarding the future trend
direction.
Similar to a doji pattern, a spinning top is considered a neutral pattern, although many do
end in reversals.
This candlestick formation signals indecisiveness amongst buyers and sellers, as neither
of these sides has the upper hand, which is why it is classified as a neutral pattern.
Key takeaways for trading the Spinning Top candlestick pattern:
• Locate candle with a short body and long wicks on both sides
• Identify market trend by using trend lines or technical indicators
• Wait for confirmation prior to entering trade
• If confirmed, place trade in desired direction

How to trade Spinning Top/Bottom

It is a Indecision pattren just like Doji but used for trend reversal for most of
the time so that its better to search it near Overbought & Oversold levels of
an oscilator or with a bigger opposite candles closing, ENTRY would be at
closing of the next candle and SL would be right Blow for spinning bottom &
above the shadow for the spinning top candle.

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SINGLE CANDLESTICKS
What is Marubozu
The word “marubozu ” translates to “bald head” or “shaved head” in Japanese.
So a Marubozu candlestick is a bald candle or shaved candle means it has no shadow or wick which shows an
Aggressive bullish or bearish momentum.
Depending on whether the candlestick’s body is filled or hollow, the high and low are the same as its open or close.
Check out the two types of Marubozus in the picture below.

How to trade Marubozu

It Shows aggressive move wether bullish or bearish so its best way is to use it
with further comfirmation of Trendline break which will show the validation of
the breakout Its Entry would be at closing out side of a Zone or POI and SL
would be at last swing

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SINGLE CANDLESTICKS
What is Hammer & Shooting star
A Hammer is a bullish reversal pattern that forms after a decline in price.
Here’s how to recognize it:
• Little to no upper shadow
• The price closes at the top ¼ of the range
• The lower shadow is about 2 or 3 times the length of the body
While a Shooting star is a Bearish reversal pattern that forms also after a decline in price
Here’s how to recognize it:
• Little to no Lower shadow
• The price closes at the below ¼ of the range
• The upper shadow is about 2 or 3 times the length of the body

How to trade Hammer & Shooting star

It is a Bullish Reversal pattern so you will only search for it in a down trend
And would trade it with confirmation of next candle ENTRY would be at
closing of the next candle and SL would be right below the Low of the
Hammerhead candle
VISE VERSA FOR SHOOTING STAR

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 DOUBLE CANDLSTICKS

What is Bullish/Bearish Engulfing

The bullish engulfing candlestick pattern is a two-candle formation
The first candle (A) must be a down candle, colored red on most charting packages (or black if
using a white/black color scheme). The size of the red candle can be large or small. The key to
the pattern is the size of the second candle.
The second candle (B) will need to engulf or overlap the first candle. Technically, this means
the opening price for the second candle must be lower than the closing price of the first candle.
VISE VESRA for Bearish Engulfing..

How to trade Engulfing Candles

Its formation clearly shows a momentum shift when a bigbody candle
eats last small body candle,its still better to not rely only on the
pattren but its better to search for oversold or overbought conditions
beforing trading engulfing as a comfirmation or any POI near engulfing
candles ENTRY the closing of next candle & SL below the low of both
candles in case of bullish engulfing and vise versa for bearish
engulfing.

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 DOUBLE CANDLSTICKS

What are Tweezer Tops/Bottom

A Tweezer Top is a bearish reversal pattern seen at the top of uptrends and consists of two
Japanese candlesticks with matching tops.
The matching tops are usually composed of shadows (or wicks) but can be the candle’s
bodies as well.
A Tweezer Top occurs during an uptrend when buyers push prices higher, often ending the
session near the highs, but were not able to push the top any further.
VISE VERSA FOR TWEEZER BOTTOM

How to trade Tweezer Tops/Bottom

Its formation clearly shows a momentum loss by making bigger
rejections from same level So its imp to have a POI near for the valid
comfirmation of rejection.
ENTRY at the closing of next candle & SL below the low of both candles
in case of bullish engulfing and vise versa for bearish engulfing.

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TRIPPLE CANDLESTICKS
What are Evening/Morning star pattren
A morning star is a visual pattern consisting of three candlesticks that are
interpreted as bullish signs by technical analysts. A morning star forms following a
downward trend and it indicates the start of an upward climb. It is a sign of
a reversal in the previous price trend. Traders watch for the formation of a morning
star and then seek confirmation that a reversal is indeed occurring using additional
indicators.
• The first candle should be a bearish candle, preferably longer
• The second candle should be indecisive as the bulls and bears start to balance out over the
session
• The third candle should be a strong bullish candle, which practically all but confirms the
reversal
VISE VERSA FOR EVENING STAR.

How to trade Evening/Morning star pattren

This formation is a complete momentum shift by it self but in this
pattren third candle shows intensity of the momentum shift if third candle
totaly engulfs the first candle that means momentum shift is at its best if its
just engulfing the middle one only then pettren is still valid but with a bit
low probability after all you still need a comfirmation from any oscilator
ENTRY at the closing of third candle & SL below the low of the middle
candle in case of Morning star and VISE VERSA FOR EVENING STAR.

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TRIPPLE CANDLESTICKS
What are Three White Soldiers/Black Crows
Three white soldiers is a bullish candlestick pattern that is used to predict the
reversal of the current downtrend in a pricing chart. The pattern consists of three
consecutive long-bodied candlesticks that open within the previous candle's real
body and a close that exceeds the previous candle's high. These candlesticks should
not have very long shadows and ideally open within the real body of the preceding
candle in the pattern.
The opposite pattern of three white soldiers is three black crows, which indicates a
reversal of an uptrend.

How To Trade Three white Soldiers/Black Crows

This formation is also a complete momentum shift by it self because three
consecutive Solid body big candles Shows dominence of the buyers and
shift in Momentum But its still a better option to use Osciltor like RSI with it
for better results ENTRY would be at the closing of third candle & SL below
the recent swing low in case of Three white soldiers and VISE VERSA FOR
THREE BLACK CROWS.

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TRIPPLE CANDLESTICKS
What are Three Inside Up & Down
Similar to the Morning Star, the pattern has a bullish reversal implication
that is even stronger than the Morning Star pattern, as the overall closing
price of the pattern is above the opening price. So if the entire pattern is
analyzed as one trading session, the pattern will appear like a bullish pin
bar with a bullish body.
• The first candlestick long and bearish, in line with the downward price
swing
• The second is a smaller bullish inside bar that passes at least the
halfway point of the first bearish candlestick
• The third is another bullish candlestick, which closes above the high of
the first candlestick
VISE VERSA FOR THREE INSIDE DOWN
How To Trade Three Inside Up & Down
This formation is also a complete momentum shift by itself just like bullish
engulfing pattren but with tow candles Shows dominance of the buyers and
shift in Momentum But it's still a better option to use Oscilator like RSI with
it for better results ENTRY would be at the closing of third candle & SL below
the recent swing low in case of Three inside up and VISE VERSA FOR THREE
INSIDE DOWN.

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 SUMMARY
• All candle stick pattrens are not enough to be trusted solely so there should be atleast one comfirmation like
• Oversold/Overbought Oscilators or Any POI present, near those pattrens to get a higher accuracy out of them..

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 SHAHBAZ ASHRAF
THANK YOU

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