Essential Patterns

This chapter elaborates the essential patterns in trading period. The open refers to the price of the first trade at which a stock is traded for that day. It plays a key role in the analysis according to the candlestick system. It is found that if there is buying demand, the market will open up higher than its previous day's closing and if there is a lack of demand, the market will open lower than its previous day's closing. It is found that if the price opens higher outside the previous day's range, the buying demand is very strong and if it opens lower outside the previous day's range, there is great selling pressure. Traders have to be cautious on such days and expect greater volatility in the prices movements when it opens outside the previous day's range.