CTA Candlestick Analysis & Japanese Techniques

Question 1

A 'Doji' candlestick is significant because it indicates:

Accepted Answer

A period where opening and closing prices are nearly equal, reflecting market indecision

Answer

Strong buying pressure

Answer

A confirmed downtrend reversal

Answer

An upcoming gap in price

Question 2

What is a 'Hammer' candlestick pattern and what does it signal?

Accepted Answer

A candle with a long lower shadow and small body near the top of its range, appearing at a low and signaling bullish reversal

Answer

A long upper shadow at a market high signaling continuation

Answer

Two consecutive down candles at support

Answer

A wide-body candle with no shadows

Question 3

The 'Engulfing' candlestick pattern requires that:

Accepted Answer

The second candle's body completely engulfs the first candle's body in the opposite direction

Answer

Both candles have the same color

Answer

Volume must be equal on both candles

Answer

The pattern must appear at a resistance level

Question 4

What does the 'Morning Star' three-candle pattern signal?

Accepted Answer

A potential bullish reversal, consisting of a long down candle, a small-body candle, then a strong up candle

Answer

Bearish continuation after a pullback

Answer

A midtrend consolidation before further decline

Answer

A breakout from a long-term base

Question 5

A 'Shooting Star' candlestick is characterized by:

Accepted Answer

A long upper shadow and small body at the lower end of the range, appearing after an uptrend

Answer

A long lower shadow appearing in a downtrend

Answer

Two consecutive up candles with no shadows

Answer

An open and close at the same price level

Question 6

In Japanese candlestick analysis, what is an 'Abandoned Baby' pattern?

Accepted Answer

A three-candle reversal pattern with a gap on both sides of a doji star

Answer

A single doji at the peak of a trend

Answer

Two candles with bodies of equal length

Answer

A pattern requiring five consecutive down candles