Investor Education Story

Financial Indicator

Macroaxis News
  
By Nathan Young

July 28, 2017

Candlestick patterns are a pivotal for people who are technical analysts. Identifying potential shifts in the market can give you an extra edge in the market, allowing you prepare yourself by moving positions around. The tri-star candlestick patter is made up of the candles and typically signals a reversal.

Tristar Pattern

This pattern is easy to identify as it is when three doji candles appear at the top of a trend, whether it is bullish or bears. For those who don’t know, a doji is when the open and close are essentially the same and the wicks on the candles are not very long.




Analyzing the candles, having an open and close be the same or close means the market is unable to keep pushing in the direction the market was heading and that could signal the buyers or sellers have lost steam.

It is important to look at volume to see how many people are in the market because if there is higher volume, that could mean more people are interested in the equity at the current price levels. Also, this could simply mean people are taking profits or hitting stop losses for the time being and the reversal may be short lived.

Candlestick patters are not one hundred percent accurate, but it certainly can give you an insight as to what the market may be thinking. Use this patter in conjunction with momentum indicators to further validate what the market is doing. Join a community and bounce ideas off of people to understand why they are currently doing in the market.

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