SuperForex-Lecture-10---Candlesticks-Analysis.

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In this lecture we will get acquainted with one more method of technical analysis called candlestick analysis.

We have already considered how the candlesticks are built and what parameters are used for that in one of the previous lectures.

Now we shall discuss what possibilities for market forecasts this combinations analysis gives.

The thing is that different candlestick combinations can indicate changes in market psychology and trend direction.

These combinations are called patterns and, as graphical models, they are divided into reversal patterns and continuation patterns.

Let us discuss first the reversal patterns.

Reversal Patterns – Hammer and Hanging Man

Candlesticks with long lower shadows and short bodies are shown in pictures 1 a-b.

Real bodies are placed at the top part of the daily price range.

A striking feature of these candlesticks is the fact that they can be bullish or bearish depending on what phase of the trend they appear in.

Read more of SuperForex’s Online Lecture Candlesticks Analysis here.

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