Two Candlesticks Which can Change The Way You Look At The Stock Charts

Two Candlesticks Are Enough To Change The Way You Look At The Market | Psychology behind Hammer and Shooting star

These candlesticks we are mentioning here because these two are very important to understand. If you understand these two candlesticks properly then how you look at the chart will change forever. You already have seen these two candlesticks but we know that only a few people understand the psychology behind these two candlesticks and once you understand the psychology of the candlesticks. Your trading decisions, your trading analysis, and your perspective of the chart will change forever. If you already understand the psychology behind the candlesticks then you should feel lucky because you are only a few of the people who know this psychology. 

Let's discuss the candlesticks now without wasting any time. The candlesticks we are going to discuss in this article are hammer and shooting star. They are very important and we will be explaining the psychology behind the candlestick. We will also tell you how you should use these in your analysis and how these candlesticks can give you the signals. 

Hammer and Shooting Star Candlesticks

Hammer and shooting star has a basic nature and is just opposite of each other, to understand these candlesticks you need to understand the basics of candlesticks which means you need to understand the open, close high, and low of the candlesticks, Once this is clear to you, then you will be able to understand these two candlesticks. 

Look here in the above image, in bullish candle Candle open from the bottom of the candle, and closes below and makes the high and lower and Bearish candle is opposite of it. It starts from the top and comes down, similarly making the high and low. The color of candles shows the nature of candles here. And what is between the color is called the body. Suppose if a candle opens and then closes at a point then whatever the price will be covered, that will denote buy a color and that area is called Body in a candle. 

Now first look at the hammer candle and then look at its body. The body is very small in the hammer and shooting star both. Hammer appears in a downtrend and when it comes then one should know that there might come a change in trend now, Now the question is why? See the wick, a tail, or shadow. that line after and before the body in a candle. What does it denote? It tells us that price went up to this point. How can this help us? Just visualize and think. If you are seeing a wick in a candle a long one. What does it say? you have to think about that. It tell us that price went up to this point. Now lets us bullish the example that means hammer. In hammer you see a small body of green color and a tail or wick, so what happened in the candle. Price open at the bottom of the green candle and then the price went down. Sellers took it down, but you see a green candle or a hammer. which tells us that sellers were overtaken by the buyers. Means buyers did not allow sellers to go further down instead they took the price up. This is how the hammer forms. Now, whenever you see a hammer just don't think the price will go down. Look at the candle before and hammer and after hammer.

You will notice that how your perspective has changed. This time you are not just seeing hammer and assuming that the market will go up. You will be thinking and analyzing the context of the market. What should be the next you will think about that. This is the power of market psychology. Once you understood. what is happening and why everything changes at the same moment.

A shooting star is just the opposite of this. Shooting star comes in an uptrend indicating a reversal might come but now you know how and why it will come. You don't have to blindly trust the candlestick. Think about why this is forming and where. If the price has more strong buyers then a single shooting star can not take the market down. This is practical knowledge. This you won’t be told anywhere else so keep sticking to Thestockjournals. 

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