Candlestick is one of the most reliable indicators that both traders and investors always use for decision making when they want to enter the position.
It is because when market opens, candlestick is the only indicator that follows the movement of one particular stock.
It will create one candle when the price is closed in certain period of time.
Other indicators are just waiting until the candle is created to be one and then they follow the trend.
Here are some terminologies of Candlestick Candles that we usually see it in the chart.
Bullish engulfing: bullish (white) candle is covering bearish (Red) candle.
This is what happens when the market is opened; the candle opens the same or lower than previous closing candle and when the market is closed, the candle close higher than previous closing Candle.
Every time we see this pattern on the uptrend, it is confirmation for entry.
Bearish Engulfing is the opposite from the pattern of Bullish Engulfing.
Doji is Indecisive, meaning to say the candle is opened and closed at the same position.
Every time, we see this type of pattern, we need to wait because there is no confirmation.
Bullish Harami is bullish (White) candle is shorter than bearish (Red) candle.
All you need to do is you need to wait for the next candle if the next candle shows gaping up on the opening candle and closing is higher than the previous closing candle on the uptrend.
It is confirmation for entry for uptrend position.
Bearish Harami is the opposite from the pattern of Bullish Harami.
Actually, there are more patterns that I don't discuss in candlestick Chart.
It is because the patterns that I mention above are the most reliable pattern for entry in option trading.