CTA Candlestick Analysis & Japanese Techniques 2

Question 1

What distinguishes a 'Spinning Top' from a 'Doji' candlestick?

Accepted Answer

A Spinning Top has a larger body relative to its shadows compared to a Doji

Answer

A Doji has equal upper and lower shadows while a Spinning Top does not

Answer

Spinning Tops only appear in uptrends

Answer

A Doji always signals a reversal while a Spinning Top does not

Question 2

The 'Three White Soldiers' pattern is a bullish continuation signal when:

Accepted Answer

Three consecutive long white candles appear after a downtrend reversal or during a consolidation, each closing near the high

Answer

Three candles appear above the 200-day moving average

Answer

Three gap-up candles occur in a single week

Answer

Three candles have equal-length bodies and shadows

Question 3

A 'Dark Cloud Cover' pattern signals bearish reversal when:

Accepted Answer

The second candle opens above the prior candle's high and closes below the midpoint of the first bullish candle

Answer

A long red candle forms below a moving average

Answer

Volume declines on two consecutive down candles

Answer

A candle's close is equal to its open

Question 4

Which candlestick pattern is the inverse of the Hammer and appears at the top of an uptrend?

Accepted Answer

Hanging Man

Answer

Evening Star

Answer

Shooting Star

Answer

Inverted Hammer

Question 5

What is a 'Harami' candlestick pattern?

Accepted Answer

A two-candle pattern where a small candle's body is contained within the prior larger candle's body

Answer

A single candle with no shadows

Answer

Three candles of progressively smaller size

Answer

A gap between two consecutive candles

Question 6

In candlestick analysis, what does a 'Marubozu' candle represent?

Accepted Answer

A full-bodied candle with no upper or lower shadows, indicating strong directional conviction

Answer

A candle with no body but long shadows

Answer

A candle that gaps away from the prior close

Answer

A candle where high and low are equal