the hAnDbook of technIcAl AnAlysIsfigure 14.5 Dark Cloud Cover Formation on the Daily Chart of Icahn Enterprises.
Courtesy of Stockcharts.com
figure 14.4 Dark Cloud Cover Formation on the Hourly Chart of Icahn Enterprises.
Courtesy of Stockcharts.com
■ (^) Candlestick patterns are easy to learn and understand.
■ (^) Candlestick patterns provide clear and objective entry and exit price levels.
■ (^) Candlestick charting may be combined with other technical studies for more
effective forecasting of potential reversals and breakouts in the market.
■ (^) Candlestick charting is a form of constant‐time charting and as such allows
for the accurate plotting of trendlines, channels, and chart patterns (since the
time axis is scaled in a linear fashion).
The weaknesses of candlestick charting include the following:
■ (^) Higher timeframe candlesticks do not provide information regarding the
lower timeframe price activity which may be relevant for effective forecasting
of more reliable breakouts on the higher timeframe candlesticks.
■ (^) It is impossible to tell whether the high or low was created first.