Single Candlestick Analysis

Single Candlestick Analysis

Single candlesticks are the easiest candlesticks to analyze because we have to look for only one candlestick in a chart.

Below, we’ll name the several different types of single candlestick indicators, and how you can analyze them for trading success.

Be sure to bookmark this page (and the following candlestick analysis pages) for easy reference. Knowledge is power when it comes to analyzing the foreign exchange markets!

Spinning Tops 

Spinning tops are the easiest to recognize of all candlesticks. A spinning top has a small body of movement. Note that with a spinning top, the size of the wicks or shadows does not matter for analyzing a chart.

A spinning top is a neutral indicator, however, it may mark a point of strong support or resistance as the open and closing price for a particular timeframe are very close.

Doji

There are four types of doji candlesticks: doji, dragonfly doji, gravestone doji, and long-legged doji.

The basic doji appears when the opening and closing price for a given timeframe are the same. The price moved up and down during the period, but the currency pair failed to keep any of its gains or losses at market close. A doji marks indecision in the market.

A dragonfly doji is shaped like a dragonfly with a longer bottom shadow, and an equal open and closing price. The dragonfly doji shows that a reversal may soon come in a currency pair’s trend, especially after large up or down trends.

Gravestone doji appear when after the currency pair advances during a trading period, but closes at a price equal to the open price. This is a bearish indicator, as the price rose before finding strong resistance. The strength of the bearish indication is affected by the upper shadow—the longer the shadow, the more bearish the signal.

Long legged doji are formed when the currency pair moves wildly during a trading period, but closes at the same price as it opened. This doji marks indecision in the market, and may indicate a reversal which can be confirmed with other indicators.

Hammers

There are two different hammers: a normal hammer candlestick, and an inverted hammer.

A normal hammer is made up of a small real body, bullish or bearish. Beneath this body is the handle of the hammer, a shadow that makes the candlestick look like its namesake. After a significant downtrend, the normal hammer is a bullish indicator. If it appears after an uptrend, it is known as a “hanging man.”

The inverted hammer is the opposite of a normal hammer candlestick pattern. The inverted hammer forms when the price moves up or down from the open price, and leaves a long shadow above the body. The inverted hammer marks a bottom reversal, and a developing bullish trend.

Single candlesticks

It is important to remember the single candlesticks because they also appear in later double and triple candlestick patterns. Take some time to study the single candlesticks, and see if you can spot them in a chart.

Now that you have the basic candlesticks out of the way, let’s proceed to the double candlestick patterns. Pay special attention here, as you’ll see single candlesticks that appear in a double candlestick pattern.