The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis may have been different from the US version initiated by Charles Dow around 1900, many of the guiding principles were very similar.
The "what" (price action) is more important than the "why" (news, earnings, and so on). All known information is reflected in the price. Buyers and sellers move markets based on expectations and emotions (fear and greed). Markets fluctuate. The actual price may not reflect the underlying value.
Falling Three Methods A long black body is followed by three small body days, each fully contained within the range of the high and low of the first day.Rising Three Methods A long white body is followed by three small body days, each fully contained within the range of the high and low of the first day.
Doji Dragon fly doji (Dragongly)Gravestone doji (Pagoda)Long-legged doji
Engulfing PatternsBearish engulfing lines Bullish engulfing lines
Hammer A candlestick with a long lower shadow and small real body. The shadow should be at least twice the length of the real body, and there should be no or very little upper shadow. The body may be either black or white, but the key is that this candlestick must occur within the context of a downtrend to be considered a hammer.
Harami A candlestick that forms within the real body of the previous candlestick is in Harami position. Harami means pregnant in Japanese and the second candlestick is nestled inside the first. The first candlestick usually has a large real body and the second a smaller real body than the first. The shadows (high/low) of the second candlestick do not have to be contained within the first, though it's preferable if they are.
Doji Doji are important candlesticks that provide information on their own and also feature in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.
Bullish doji star.
Bearish doji star.
Others configurations
Three Black Crows
Three White Soldiers
Candlestick
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