History
Candlestick charting can be traced back to the 1700's as a tool used for rice trading. One of the great rice traders of the 1800's, Homma is widely credited for developing the candlestick charting basics used today. In the west, Candlestick Charting has grown in popularity and use, thanks to the efforts of Steve Nisson and Greg Morris. Candlestick charts are visually appealing and can be a valuable tool in the technicians toolbox as it gives insight into current investor sentiment, allowing for the determination of short term tops and bottoms.
CandleStick Patterns
| Indicator/Pattern | Description | Comments |
| Engulfing Pattern |
A reversal pattern that can be bearish or bullish depending upon whether it is in an uptrend or downtrend. The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body. |
CSEngulfing(bullish);CSBearEngulfing |
| Harami |
A two day pattern that has a small body day completely contained within the range of the previous body, and is the opposite color. |
CSBullishHarami;CSBearishHarami |
| Morning Star |
A three day bullish reversal pattern consisting of three candlesticks - a long-bodied black candle extending the current downtrend, a short middle candle that gapped down on the open, and a long-bodied white candle that gapped up on the open and closed above the midpoint of the body of the first day. |
CSMorningStar |
| Piercing Line |
A bullish two day reversal pattern. The first day, in a downtrend, is a long black day. The next day opens at a new low, then closes above the midpoint of the body of the first day. |
CSPiercingLine |
| Dark Cloud Cover |
A bearish reversal pattern that continues the uptrend with a long white body. The next day opens at a new high then closes below the midpoint of the body of the first day. |
CSDarkCloudCover |
| Evening Star |
A bearish reversal pattern that continues an uptrend with a long white body day followed by a gapped up small body day, then a down close with the close below the midpoint of the first day. |
CSEveningStar |