Major Candlestick Signals

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The Doji signal denotes indecision. Its significance lies predominantly in the oversold and overbought conditions of the stock. At the top of an uptrend, when prices are in overbought conditions, it cautions the trader to start locking in profits. At the bottom of a downtrend, when prices are in oversold conditions, it foretells the trader that bears are getting tired.

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The Bullish Engulfing signal is found at the bottom of a downtrend. Criteria:
1. The stock must have been in a definite downtrend before this signal occurs. This can be visually seen on the chart.
2. The second day of the signal should be a Green candle opening below the Close of the previous day and closing above the Open of the previous day’s black candle.aut perferendis doloribus asperiores ut labore.

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The Bearish Engulfing signal is found at the top of an uptrend. Criteria:
1. The stock must have been in a definite uptrend before this signal occurs. This can be visually seen on the chart.
2. The second day of the signal should be a black candle opening above the Close of the previous day and closing below the Open of the previous day’s white candle.

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The Inverted Hammer signal is found at the bottom of a downtrend. Criteria:
1. The stock must have been in a definite downtrend before this signal occurs. This can be visually seen on the chart.
2. The Upper shadow must be at least twice the size of the body.
3. The day after the Inverted Hammer is formed, one should witness continued buying.

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The Hanging Man signal is found at the top of an uptrend. Criteria:
1. The stock must have been in a definite uptrend before this signal occurs. This can be visually seen on the chart.
2.The lower shadow must be at least twice the size of the body.
3.The day after the Hanging Man is formed, one should witness continued selling.

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