hello everyone it's iCarly K here and today we're actually going to be covering Candlestick anatomy and let's go ahead and get right into it this is going to be something that I think is going to help a lot of Traders along their Journey just by knowing the psychology behind Candlestick patterns as well as just being able to visualize what they actually represent so what we're going to focus on is going to be the left and the right hand side of the chart not so much the middle and the Sim the simple reason why we're not going to focus too much on the middle is because you know that's a neutral setup which basically means that it can go either way but what we are going to cover really quickly is going to be the ohlc or the Open high low enclosed of a candle so hopefully this helps to understand and help us to push forward and move forward with what we're learning today so very first for a bullish Candlestick pattern what you'll notice is that the open is always going to be lower than where it closed just think about pressure pushing to the upside so in order for it to be bullish it has to close above the open now there are also two other parts to a candle which is going to be the high which is going to be the highest point of that candle and then the low which is the lowest point of the candle and anytime you see a wick it basically represents you know a collapsed level of buying or selling pressure so it went this high but then it pulled back or it went this low and then it pulled back so you're open and closed is going to be the body and then you're high and low is just basically showing you where we pulled back from now on the flip side when you're looking at a bearish Candlestick pattern it's going to be the opposite everything except for the high and the low those are going to be the same but when it comes to a bearish Candlestick pattern think about falling right the open is always going to be higher than where the candle actually closed so hopefully that helps you to understand the ohlc or the Open high low and close now when it comes to the psychology behind Candlestick patterns I'm just going to run through this really simply at the very top in the middle you see that there's a miribozu candle but there's not a lot of Wick to it so let's just say the left is bullish and the right is bearish the candle open here on the bullish side and then there was nothing but buying pressure for the entire candle okay and then for the bearish candle or the candle in which you would do puts on there was nothing but selling pressure the entire candle so no Wick is present because it was just a lot of pressure that entire candle now let's actually go over to the left hand side of the chart and hopefully things will start to click now I do see that there are three candles prior to the Hammer candle and no that doesn't mean that it has to be three candles present in order to validate it or qualify it as a hammer it basically is just representing that the Candlestick is pushing to the down side right now in order for anything on this side to represent a bullish reversal the key word is to pay attention to the fact that it is a reversal so in order for it to reverse it has to at one point be moving to the opposite direction at which It reversed from so in this case it's moving to the downside and then you see this Hammer candle form very simple thing to visualize it looks just like the tool that we use in our home which is one of the reasons why I absolutely love the hammer candle and it's actually one of the main parts of my strategy now psychologically if we want to just view the hammer candle let's just say it just like this just going to grab my drawing tool here and try to make it make sense for everyone okay so at one point it went this low and then the buyers actually stepped in and pulled it upwards so that within itself is a candle that reversed on itself now in order to validate this particular pattern it's very important to understand that the next candle that follows has to break above the hammer candle and as you see that's exactly what happened so that validates this as a bullish reversal pattern it's very important to make note of that because sometimes you can see a hammer candle form but then another bearish candle forms immediately after which means that that candle was not validated now if we look directly next to it we'll see that there is an inverted Hammer candle very much the same thing it's just an upside down Hammer candle it still represents a reversal to the upside and it is validated once the candle actually breaks above it or the next candle breaks the button now if we look directly next to that we'll see that there is a dragonfly doji it looks like a t but psychologically if you look at it the same way as we looked at the hammer candle think of it like this at one point the sellers were in and they were able to push it all the way to the downside that's my little arrow representing the downside however the buyers stepped in and was able to pull it to the upside okay and that's the reason why it represents a bullish reversal pattern and again verified and validate it by the next candle breaking above now one thing that I would like to make note of is if we move over to the bearish side of things your hanging man candle which is this one right here right your hanging man candle looks very much like your Hammer candle but the difference is where they are located on your chart okay so your hanging man candle actually forms in an uptrend and you see it looks very much like a hammer candle but it signals a reversal to the downside when the next candle actually breaks below now again these two things look very much alike the hammer and the hanging man but the difference is the major difference is where they are located on the chart okay one is a bullish reversal and the other one is bearish now also with that being said the shooting star candle looks very much like the inverted Hammer candle but again the location of where they're formed on the chart actually mean quite a lot so I'm just going to remove this off of the chart hopefully everyone is following so far now we have the gravestone doji this looks like an upside down tee so one of the reasons why I like everything at the top of this particular chart is because it's so visually understandable so I'll get back into it the gravestone doji just looks like an upside down tee it's a representation of a bearish reversal pattern now when you look at these particular things let's just talk about it at one point the shooting star candle went this high and then the sellers actually stepped in and pulled it back down so psychologically that basically means there is a presence of a opposing party to the direction that it was going that's pulling it back to the opposite direction so that within itself can let you know hey there may be sellers stepping in and pushing this thing in the opposite direction so if you're in for example calls and you see this particular pattern form then you can say to yourself okay this thing may be getting ready to reverse if I'm in calls and I'm profitable it may be time for me to actually secure my profit or if you're looking to get into a trade and you see this particular setup you can say to yourself I can prepare myself for the possibility of this powder pushing to the downside now these are great things to actually have in Your Arsenal to help you along your trading Journey but outside of that one other thing that I would like to say is that make it fun make learning these particular setups on this particular chart make it fun for yourself for example with me I like to look at the bullish kicker pattern or the bearish kicker pattern like a parent right so we see and if we were to see any you know candles form on this chart on this little picture that we have here working for us we would see that it's a bearish pattern that formed first and then we kind of have like the parent that kicked the kid out of the house and then the kids said you know what Mom or Dad I'm gonna go and make something of myself and then they actually do well and move you know move out get their own place move to the upside do little tricks like that to help you to understand what you're viewing on this particular chart now I'm not going to go over every single thing on here because one of the things that I like to teach Traders is number one it's not important for you to know every pattern on this chart what's important is for you to fall in love with quite a few of these setups maybe three or four setups so that you have a few new things that you can actually you know toggle between it's important for you to know a few so that you can actually go down your watch list seek out the particular patterns that are very easy for you to understand and then prepare yourself for those particular trades on those Securities that are forming those patterns now one other one that I like at the very bottom is going to be the bullish abandoned baby and the bearish abandoned baby the reason why is because much like the bullish kicker it looks like they just kicked the baby out the house right they kick the baby out the house and then some lovely person found the child and gave them a better life I know it sounds crazy but sometimes we have to do these little things to help us to understand what we're seeing to make it fun make trading enjoyable I do love the morning star and the evening star as well the Morning Star doji the evening star doji or even just the evening star pattern or the Morning Star pattern so with the doji it's a very simple pattern so we're going to just move to the middle really quickly now a doji within itself it's just a representation of indecision if you think of it like this this candle went this High it went this low but the open and close are essentially the same so at one point the Bulls were winning one point the Bears were winning but then neither one of them could really take control right so typically the next candle that forms after a doji can kind of tell you the direction that it has a possibility of going in very simple strategy but the Morning doji Star it basically gives you indecision and then the next candle that breaks above it can kind of let you know hey we may be moving to the upside same thing on the the evening starts it's basically the same type of psychology behind it but you're just basically understanding that it is the location that matters where that candle is formed so hopefully this helps you thank you so much for watching my very first video on my channel remember to like comment and subscribe and have an amazing day