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Detailed Explanation of Various Candlestick Patterns
1. Doji and Hammer Candlesticks
Doji: No upper or lower shadow, closing price equals the high or low, indicating market indecision.
Hammer: No upper shadow, closing price equals the low, signaling potential bullish reversal.
2. Large and Medium Bullish and Bearish Candlesticks
Features: Price change exceeds three points, with a long real body.
Significance: Large and medium bullish candlesticks indicate dominance by buyers; large and medium bearish candlesticks indicate dominance by sellers.
3. Long Upper and Lower Shadows
Features: Shadows longer than twice the length of the real body.
Long upper shadow: Price surged but was pushed down, indicating selling pressure after a rally, with a tug-of-war between bulls and bears.
Long lower shadow: Bears were pushed back by bulls, indicating strong support, often appearing near support levels.
4. Small Bullish and Bearish Candlesticks
Features: Price change within one point, with a short real body.
Significance: Indicates only slight advantage for bulls or bears; the market is observing.
5. Doji Star
Features: Very small real body with long upper and lower shadows.
Significance: Short-term balance of power between bulls and bears; trend may reverse at any time.