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ABSTRACT
Candlesticks are one of the most powerful technical analysis tools in the trader's toolkit. Candlestick Charting originates back to Japan from centuries ago. It is a method of looking at data differently than has been developed in western cultures. The advantage of using candlestick charting in place of Bar charts is that you have the ability to use same techniques and analysis that bar charts offer plus the diversity and unique signals that candlesticks generate. The study on the formation of candlestick pattern was done to find out the different candlestick patterns and identifyi its accuracy. It will help the investors to check whether the candlestick patterns are dependable for trading decision. This study is conducted based on the past five years Nifty index.The main findings from this study are candlestick patterns are not 100% accurate as per the past five year Nifty index.And these patterns are not very much supported by technical indicators.From this study we can conclude that investors should consider other factors along with candlestick patterns. It helps to improve the accuracy level.
Keywords: Technical Analysis, Technical Indicators, Candlestick Patterns, Bullish Patterns, Bearish Patterns.
INTRODUCTION
The study on the formation of candlestick pattern is done to finding out the different candlestick patterns and identifying its accuracy. It will help the investors to check whether the candlestick patterns are dependable for trading decision. This study is conducted based on the past five years Nifty index. The study is actually conducted at 'THE STRATEGIST', a stock broking firm at Ernakulam for a period of one month.
Candlestick charts are one of the important charting technique used in technical analysis. Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume. It is a process of identifying trend reversals at an earlier stage to formulate the buying and selling strategy. A candlestick chart is a style of bar-chart used primarily to describe price movements of a security, derivative, or currency for a designated span of time. It is a combination of a linechart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in technical analysis...