Candlesticks Flashcards
(25 cards)
What is a candlestick in stock market terminology?
A candlestick is a graphical representation of price movements for a specific time period, showing open, high, low, and close prices.
True or False: A green candlestick indicates that the closing price was lower than the opening price.
False
Fill in the blank: The upper shadow of a candlestick represents the ______.
highest price during the period
What do the colors of candlesticks typically represent?
Green usually indicates a price increase, while red indicates a price decrease.
What is the body of a candlestick?
The body of a candlestick represents the range between the opening and closing prices.
Multiple choice: Which of the following describes a doji candlestick?
A candlestick where the opening and closing prices are very close or equal.
What does a long body in a candlestick indicate?
A strong price movement in the direction of the body.
True or False: A candlestick pattern can indicate potential market reversals.
True
What is a bullish engulfing pattern?
A bullish engulfing pattern occurs when a small bearish candle is followed by a larger bullish candle that completely engulfs it.
Fill in the blank: The lower shadow of a candlestick represents the ______.
lowest price during the period
What does a hammer candlestick indicate?
A potential reversal in a downtrend, characterized by a small body at the top and a long lower shadow.
Multiple choice: What does a shooting star candlestick pattern signify?
A potential reversal at the top of an uptrend.
What is the significance of the candlestick’s closing price?
The closing price is often seen as the most important price, indicating where the market settled at the end of the period.
True or False: Candlestick patterns can be used in isolation for trading decisions.
False
What does a series of consecutive green candlesticks typically indicate?
A strong bullish trend.
Fill in the blank: A bearish engulfing pattern occurs when a bullish candle is followed by a ______.
larger bearish candle that engulfs it
What does the term ‘candlestick chart’ refer to?
A type of financial chart that displays candlestick patterns over a specified time frame.
Multiple choice: Which pattern suggests indecision in the market?
Doji
What is the purpose of using candlestick patterns in trading?
To identify potential market trends and reversals.
True or False: The length of the shadows can indicate the volatility of the market.
True
What is a tweezer top pattern?
A reversal pattern that occurs at the top of an uptrend, characterized by two consecutive candles with similar highs.
Fill in the blank: An inverted hammer appears in a downtrend and signals a potential ______.
reversal
What does a candlestick with no shadows indicate?
That the opening and closing prices were at the high or low for that period.
Multiple choice: Which candlestick pattern indicates a strong bullish sentiment?
Bullish engulfing
