fxtalk

Engulfing candle

Bullish:
This patterns consists of two candles: the first one is a narrow range candle that closes down. This means that the sellers still control the market but the bearish sentiment is starting to fade. The next candle "engulfs" the body of the first one, starting to develop from below the first candle and opens above it. This means a bullish sentiment is starting to develop.

Bearish:
Again, two candles, the first one, a narrow range candle that closes up followed by a descending candlestick that opens above the first one and closes below it.

Shooting Star/Hammer:
Bullish:
Hammer- a single positive candle, with a narrow range body and a long tale. This tells us that a strong bearish sentiment developed but it faded away during the time the candle developed, and, the buyers won the battle, overcoming, in the end, the sellers. Even if this candle announces a potential top, it also shows the indecision of the traders, so it should always be supported by another confirmation methods.

Bearish:
Shooting Star- a single negative candle, with a narrow range body and a long tale. This tells us that a strong bullish sentiment developed but it faded away during the time the candle developed, and, the sellers won the battle, overcoming, in the end, the buyers. Even if this candle announces a potential bottom, it also shows the indecision of the traders, so it should always be supported by another confirmation methods.