Answers to the Quiz Questions

Question 1:  At the RedArrow on this chart, you will see a Shooting Star. A bearish candlestick pattern with a long upper shadow, lit­tle or no lower shadow, and a small real body near the lows of the session that arises after an uptrend.

Question 2:  At the Blue Arrow, you will see when the candle closed, it confirmed 2 different candle patterns.  First it was a Falling Window:  The same as a Western gap. Windows are continuation candlestick patterns. If a window opens in a sell­off, it is a falling window. This is a bearish signal. The falling window is resistance. The candle close also confirmed it to be a Three Black Crows:  Three relatively long consecutive black candles that close near or on their lows. It is a top candlestick reversal pattern at a high-price level or after an extended rally.

Question 3:  At the Black Arrow on this chart, you will see a Piercing Pattern. A Japanese candlestick bottom reversal signal. In a downtrend, a long black candlestick is followed by a gap lower open during the next session. This session finishes as a strong white candlestick that closes more than halfway into the prior black candlestick’s real body. Compare to the on-neck line, the in-neck line, and the thrusting line.

Question 4:  At the Orange Arrow on this chart, you will see an Inverted Hammer Pattern. Following a downtrend, this is a Japanese candlestick line that has a long upper shadow and a small real body at the lower end of the session. There should be no, or very little, lower shadow. It has the same shape as the bearish shooting star, but when this line occurs in a downtrend, it is a bullish bottom reversal signal with confirmation the next session when candlestick trading (i.e., a candlestick with a higher open and especially a higher close compared to the inverted hammer’s close).

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