Burning at Both Ends part 3: Types of Candlesticks

In our last post, we learned about reading candlesticks to understand market behavior and predict trend momentum. As you become more familiar with with these symbols, you’ll notice that they work together to form distinct patterns that can act as signals of market behavior. In this post, we’re going to go over a three of these patterns and how they should be interpreted.

Boxcars are signals of reversalThese are called boxcars. They are signals of a reversal. The candles leading into the boxcars are relatively small, and the two large ones should have virtually no wicks. The moment following the close of the bearish candle is a great place to go in short. The inverse is true at the end of a downtrend.




Doji candles signal market indecisionThese are doji candles. After you’ve seen a significant expansion in the market, you might run into one of these. These candles signal total market indecision. They represent a price that pushed in either one direction, the other direction, or both, then finished right back where it started.






Spinning tops denote market indecision

Like the doji, the spinning top denotes general market indecision. It’s not hard to tell why it’s called the
spinning top; its narrow price range combined with short high and low resemble the child’s toy.



There are many of these patterns, and they all go by many names. Don’t get too caught up in the terminology—the important thing is that you understand what the symbols and patterns are signaling. Clue in to these patterns; they can tell you a lot!


About Tom

Tom Lund is the Content Manager at Apiary Fund where he began his career in 2012. He creates and edits the educational material that Apiary Fund uses to train new foreign exchange traders. Lund researches and writes the investing news and tips for the Apiary Fund blog and website. He graduated from Brigham Young University-Idaho with a bachelor’s degree in English.

Like this Article?

Check out our newsletter for regular forex trading tips and advice!

Or you can visit our website to see what our unique business model is all about ...and how you can participate!

, , , , ,

Comments are closed.