The Candlestick Trading Bible

These flashcards cover critical terminology and concepts from the Candlestick Trading Bible, focusing on key candlestick patterns, trading strategies, and money management techniques.

Munehisa Homma

The most successful trader in history, credited with inventing candlestick chart patterns.

Bullish Engulfing Pattern

A two-candle pattern indicating that buying pressure has overwhelmed selling pressure, typically forms at the end of a downtrend.

Bearish Engulfing Pattern

A two-candle pattern indicating that selling pressure has overwhelmed buying pressure, typically forms at the end of an uptrend.

Doji Candlestick

A candlestick pattern that signifies indecision in the market, where the open and close prices are virtually the same.

Dragonfly Doji

A bullish candlestick pattern characterized by a long lower shadow and little to no upper shadow, indicating buying pressure.

Gravestone Doji

A bearish candlestick pattern characterized by a long upper shadow and little to no lower shadow, indicating selling pressure.

Morning Star Pattern

A bullish reversal pattern consisting of three candles: a bearish candle followed by a small candle and a bullish candle that closes above the midpoint of the first candle.

Evening Star Pattern

A bearish reversal pattern consisting of three candles: a bullish candle followed by a small candle and a bearish candle that closes below the midpoint of the first candle.

Hammer Candlestick

A bullish reversal pattern that forms when the open, high, and close are roughly the same price, characterized by a long lower shadow.

Shooting Star

A bearish reversal pattern that forms in an uptrend, characterized by a small body and a long upper shadow.

Harami Pattern

A two-candle pattern where a smaller candle is contained within the body of a larger candle, indicating potential reversal or consolidation.

Tweezers Tops and Bottoms

Reversal patterns characterized by two candlesticks with matching highs (tweezers top) or lows (tweezers bottom), indicating potential trend reversals.

Support and Resistance Levels

Key price levels where the market typically reverses; support is where buying interest may emerge, and resistance is where selling interest may emerge.

Trendlines

Lines drawn on a chart to indicate the direction of price movements; connecting swing highs in a downtrend or swing lows in an uptrend.

Pin Bar

A candlestick pattern characterized by a long tail, indicating rejection and potential reversal at key price levels.

Fibonacci Retracement Levels

Horizontal lines that indicate potential support and resistance levels based on the Fibonacci sequence, commonly used for identifying reversal points.

Money Management

Strategies used to manage trading capital effectively, including position sizing and risk-reward ratio considerations to minimize losses.

Psychology of Trading

The mental and emotional factors that affect trading decisions; understanding market psychology can improve trading outcomes.