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AXIOM Business Books Awards, bronze medal. 11: A bar chart has limited information. Note the triangle formation in the bar chart of figure 6. A triangle formation often is a continuation pattern, but sometimes it can be a reversal pattern.

The bar chart does not give any clue about which side of the triangle pattern will be broken. 12: The candle chart tells you more. But in the candle chart in figure 6. 12, you see only candles with rising power in the last couple of weeks. The break to the upper side was, therefore, no big surprise, and you got a continuation of the uptrend. Basic Patterns Different basic patterns offer an indication about what kind of price evolution can be expected. The closing price closed higher than the opening price.

The white body has a normal average size compared to recent prices. The closing price closed below the opening price. The black body has a normal average size compared to recent prices. A long white body with little or no shadows compared to recent prices. High price and closing price are close together, and low price and opening price are also close together. If there is no other support nearby, you can use the midpoint of the white body as a support level.

A long black body with little or no shadows compared to recent prices. High price and opening price are close together, and low price and closing price are also close together. If there is no other resistance nearby, you can use the midpoint of the black body as a resistance level. Opening price and closing price are very close together with upper and lower shadows. Doji’s are part of many candlestick patterns. A doji with bigger shadows is more important.