What is the recommended approach when encountering minor variations in candlestick patterns compared to their textbook definitions? Option: Be flexible within reasonable limits and quantify the variation., Assume the pattern is a new, undiscovered type., Strictly adhere to the textbook definition., Disregard the pattern as invalid.

<< Back

Hi

Show Ans

i

What is the recommended approach when encountering minor variations in candlestick patterns compared to their textbook definitions?

Be flexible within reasonable limits and quantify the variation.

Assume the pattern is a new, undiscovered type.

Strictly adhere to the textbook definition.

Disregard the pattern as invalid.

<< Back

Hi

Show Ans

i

What is the recommended approach to using the 'Candlestick Pattern' study effectively?

Focus only on patterns that occur during periods of high trading volume.

Use it as a starting point for further analysis and confirmation.

Ignore the patterns if they contradict other technical indicators.

Rely solely on the identified patterns to make trading decisions.

<< Back

Hi

Show Ans

i

What are the two main categories of candlestick patterns discussed in the text?

Bullish and bearish patterns

Simple and complex patterns

Reversal and continuation patterns

Single and multiple candlestick patterns

<< Back

Hi

Show Ans

i

What is the fundamental assumption in technical analysis that candlestick patterns heavily rely on?

Economic indicators drive stock prices.

Market volatility is predictable.

History tends to repeat itself.

Fundamental analysis is unreliable.

<< Back

Hi

Show Ans

i

What is the recommended approach for risk-averse traders when encountering a star formation pattern?

Disregard the pattern as it carries no significant trading signals

Wait for confirmation on the subsequent trading day before entering a trade

Initiate a trade immediately upon pattern recognition

Adopt a contrarian approach and trade against the pattern's indication

<< Back

Hi

Show Ans

i

Why should traders avoid trading based on candlesticks with abnormally small real bodies?

They are unreliable for technical analysis

They indicate subdued trading activity and lack of clear direction

They indicate extreme market volatility

They suggest a potential trend reversal