We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- Remember the rules based on which candlesticks work.
- Marubozu is the only pattern that violates rule number 3, i.e. Look for the prior trend.
- A bullish marubozu indicates bullishness.
- Buy around the closing price of a bullish marubozu
- Keep the low of the marubozu as the stoploss
- A bearish marubozu indicates bearishness.
- Sell around the closing price of a bearish marubozu
- Keep the high of the marubozu as the stoploss
- An aggressive trader can place the trade on the same day as the pattern forms.
- Risk-averse traders can place the trade on the next day after ensuring that it obeys rule number 1, i.e. Buy strength, and Sell weakness.
- Abnormal candle lengths should not be traded.
- A short candle indicates subdued activity.
- Long candle indicates extreme activity; however, placing stop loss becomes an issue.
Great Lectures!!!!
A heartfelt appreciation for this much required initiative, Thank you.
Hope you continue to like the content on Varsity!
One feedback – Towards the end of these videos where the key takeaway section appears, the suggested video thumbnails cover the content making it difficult to read the key takeaways. Would it be possible to resize the suggestions videos in a way that it does not cover the video content?
We are working on this Pradeep.
Hi, loving the video lectures.
Just a comment- The spinning tops and dojis are missing from the video content.
Would appreciate if these were covered as well.
Aditi, thanks for the kind words. Let me check on this.
What should be the timeframe for the analysis?
Depends on your trading style.
Doji is missing in the video
Simply wow! I always feared technical analysis, and you made it so much simple. Thanks a lot:)
Glad you liked it Milind! Happy learning 🙂
Hi, any update on video series for Doji and Spinning Tops.
We have put up everything on the TA video series, Salil.
Hi Karthik,
Kudos to the team!Great Initiative and also a clear-cut explanation by Prateek. A great way to strengthen the Basics.
Please do cover the rest of the modules too. Also, I wouldn’t mind in-depth content for any of these topics. Looking forward to it!.
Thanks
Thanks for the kind words, we will put up the video content for 2 more modules shortly, Kumar 🙂
Dojji Star concept was not covered but referred in this video. It is not covered in all previous videos also till this video.
Ok, but you can read about it Varsity.
Dojis and Spinning tops are not in this video.It will be very helpful if these were also covered.
We skipped that bit since it is a fairly easy topic to read up.
Very confused after wating this vedio. Can you show some example from kite. How to buy a stock and how to sell, m
Which part is confusing you? Thought this was very clear 🙂
It will be really helpful if details of timeframes are included in examples…Thank you for really great videos
Can you please elaborate on this? What exactly are you looking for?
Does color matters for hanging man / Hammer?
Not really.
I’ve seen the video thrice understood evrything but only thing that is itching my mind is DOJI Candlestick ??
It is a candle with open = close, which means there is no real body. Because open = close, the bulls and bears are in equal control with no decisive directional movement.
What is repetitive intraday chart pattern and can someone explain with example of any company?
No idea about this.
Great Content, I’m thoroughly enjoying the content.
Thanks, Mrs. Karthik Rangappa.
Glad to note, happy learning 🙂
Random question, why does the market open at 9:15 am and close at 3:30 pm?
No idea 🙂
The market used to open at 9:50 AM earlier
So much of garbage on the internet regarding stocks, and then I found this GOLD.
Happy learning, Hemant 🙂
The content quality is amazing. Much better than any of the well-known Youtubers. It could get better by citing more examples and probably coming up with some small online tests; just to understand how much we as a listener have understood the concept and are able to apply it in analyzing the charts.
Noted. Will try and incorporate that 🙂
Doji’s explanation is missing.
We have covered that as well, both doji and spinning top.
Really nice content . Cleared many doubts regarding trade
Thanks Zerodha varsity for making these content free
Happy learning, Aditya 🙂
Sir,
When there is a downtrend in market and a hammer is formed(red color) so does that too indicate that the market will reverse?
It just enhances the probability of market reversing; no guarantee though.
Explained very well
Happy learning!
Hi. I’m really really confused about a couple of things:
1) does the color of the hanging man or the hammer matter? Or do we straight away just look at the trend and make a decision?
2) i understood the reasoning of the hammer where you said that after a down trent, we see the Bulls ultimately overpowering the bear. And hence it’s expected to rise.
But what about the hanging man. What is logic here? I feel the Bulls are still pushing it upwards right? So how is there a downtrend from here onwards?
Would be grateful for any assistance on this, since I’m badly stuck on these 2 parts
1) No, it does not. But I’d be happy to trade with a green hammer compared to a red.
2) In hanging man, what matters is the fact that the bears tried to break the pattern in a strong bull market.
Also, i did not really understand the purpose and the difference between the hanging man and the shooting star. Both appearing in an uptrend suggest that the market is now going to reverse and move downwards. So what exactly is the difference then between the 2
Do check my previous comment about hanging man.
How biding and offering tend to market up and down by taking more market participate..
Please refer to Module 1 for this – https://zerodha.com/varsity/module/introduction-to-stock-markets/
what it appears hanging man and Hammer in Paper Ambarella , Isn’t it available in Shooting Star?
Yes, they are all similar candles.
Spinning tops and doji’s are missing in the lecture. There is a reference to Doji in between though.
We have discussed this in the web module.
The spinning tops and dojis are missing from the video content.
Would appreciate if these were covered as well.
Yeah, in the video we only covered broad topics.
As said that when the market trend touches the lower wick in shooting stars we sell the particular shares , so what should we do in the opposite of it like if it crosses the upper wick should we purchase it??
You can still consider the shooting star as bearish 🙂
hey karthik, i didnt understood one thing where you keep telling that it depends upon trader either to trade on day 1 being the risk taker and on day 2 being the risk averse. so you mean like the next day the stock market opens or the next candle stick?
quite confused in this part
could you give an abstract regarding this?
I’m talking about taking the trade the next day, after confirming that the price is moving in the direction expected. So you are bing doubly cautious here and not willing to take on too much risk.
They are still missing
I absolutely love this approach. Just one thing, doji is not a part of the video (was missed maybe). Please have a look. Apart from this, Thank you for such great content.
Sure, thanks and I’ll check that 🙂
Your initiative to free learning is excellent thankyou so much
Happy learning, Garvit.
Hi,
Great videos and presentation sir. But Spinning tops & Doji explanation is missing in this video. Could you add on it?
Thanks. We will try and do that 🙂
It is really very helpful. Thank you for the video.
Happy learning!
Great initiative. Thanks a lot!!
Happy learning!
The spining top is not covered in the lecture
We will probably put up a video on this soon.
Are these analysis applicable for all timeframes?
Yeah, you can, Shivansh.
Wow, the importance of shooting star was well explained. Thanks a ton for such helpful content.
The Doji is missing…
Happy learning 🙂
We will do a video on this soon.
where can i find videos for DOJI and SPINNING TOP ?
Soon, please keep an eye on the channel.
i don’t understand how the psychology of reversal works in the case of hanging man, it seems bulls have overpowered the bears when they try to get price down
I’d suggest you watch this video – https://www.youtube.com/watch?v=1kQjXFL4Mfc&list=PLX2SHiKfualEyD05J9JsklEq1JFGbG6qJ&index=10
What is “Doji” mentioned during the example of Shootong star ?
I’ve explained Doji in this module, please do check that chapter.
Hey, can we also talk about cases where the hammer pattern is there but the market went down after it? Has it every happened in the past? If yes, what is the probability of going up vs down?
Of course it happens. There is no such thing as guarantee in markets, Gaurav. All the patters only enhance the odds of getting profitable.
I got my answer to the above question.
Have a follow-up question: For how many days post-hammer we should wait to trade? It could be possible the prices have not crossed the low of the hammer for so many days but you don’t know when you should trade or it could be possible that the next day, it crosses the high of the hammer but this was just for a day and the market starts falling after that. Not clear on when you should exactly trade.
Since these are short term patterns, the sooner the better, maybe like the next day. The older the pattern gets, the lower the odds of it working as expected.
Sir as the rule no 1 says buy strength and sell weakness doesn’t it lead to loss if we buy high and sell low?
No, you just ride the momentum here 🙂
Sir I want to learn about all the candlestick pattern how can I learn about those sir, as on varsity no all type of candlestick patterns are posted.
Yes, this module plus Varsity Youtube channel is what you need to check for a complete guide to Candlesticks.
Sir any book recommendation to learn all type of candlestick patterns 🙃
This is a good set of patterns to get started on Aayush. Also, there is no need to know all patterns, do check this video https://www.youtube.com/watch?v=z0Rwoz6PduM&list=PLX2SHiKfualEyD05J9JsklEq1JFGbG6qJ&index=3
Sir you have just told about candlestick patterns what about other type of patterns?
Please check my previous comment.
Sir Karthik
i was interested in trading all my life
now at the age of 76 years i have found the right way to trade
i thank 2 persons 1 siddarth Bhanushali and you Sir Karthik
I opened a zerodah account and at this age I am learning the right way ( start date August 2023 )
Till date I have studied swing Trading, intra buying and now today shorting
Till date I have not lost but made v v small profits
I will do my Trades 1 single/double candlesticks and SMA and Graduate further
slow and steady and I am going to succeed
Thanks a lot
EDWIN ALPHONSO
9820284741
Wishing you the best, please be fully aware of the risks involved in trading and tread with caution. Good luck, Sir.
A hanging man or hammer should have what colour to indicate the trend reversal. Like in an uptrend, when a hanging man appears it shows trend reversal. But should it be green or red to indicate reversal?
These candle patters don’t really need a specific color to signify the market sentiment as the open and close are close to each other.
Hi Team Zerodha
These sessions are really great. Really appreciate the support.
What should be the minimum length of the candle for us take the decision based on that. For e.g. I am able to view a bullish marubozu candle but its length is comparatively smaller, can i still infer confidence from it?
Thanks Sanjay. Regarding you query, you will find you answer here in this video –
https://www.youtube.com/watch?v=1kQjXFL4Mfc&list=PLX2SHiKfualEyD05J9JsklEq1JFGbG6qJ&index=10
Shooting Star works well in an uptrend but the same works in a downtrend?
Please confirm
YOu will have to backtest this and figure Swapnil. There is no straightforward answer to this 🙂
Thank You Karthik
Happy learning, Sanjay.
What is the difference between shooting star and hanging man?
Both indicate bearishness, but the SL for a shooting star is deeper.
appearing shooting star is bullish or bearish most of times
Its bearish candle, Naga.
It is really very helpful for beginners. Thank you for the videos.
Glad you liked it, happy learning!
If shooting star in downward trend than what happend ?
It signifies more bearishness.
Seems like hanging man and shooting star are similar, Both are in uptrend but different in shape. Please confirm
The difference is in the placement of real body. In the hanging man, real body is towards the upper end of the real body, in shooting star its at the lower end. Otherwise, the interpretation and the trader’s actions are similar.
Superb explanation on how to analyse it during trading, which is required. Thanks a ton!!
Happy learning, Pallavi.
What is the definition, Psychology of spinning top and doji?
Lot of intrday action, but opening and closing is the same.