Candlestick Patterns MCQs

MCQs on Candlestick Patterns

1. What does a bullish candlestick pattern indicate?
A) Price is likely to decrease
B) Price is likely to increase
C) Price is stagnant
D) Price has reached its highest point
Answer: B) Price is likely to increase

2. What does a “doji” candlestick signify?
A) Strong buying pressure
B) Strong selling pressure
C) Market indecision
D) Continuation of the trend
Answer: C) Market indecision

3. Which pattern consists of three candlesticks, where the first is a bearish candle, the second is a small body candle, and the third is a bullish candle?
A) Morning star
B) Evening star
C) Three white soldiers
D) Bearish engulfing
Answer: A) Morning star

4. In candlestick analysis, what does a “hammer” pattern indicate?
A) Potential reversal from a bullish trend
B) Potential reversal from a bearish trend
C) Continuation of a downtrend
D) Continuation of an uptrend
Answer: B) Potential reversal from a bearish trend

5. What is the significance of a “bullish engulfing” pattern?
A) Indicates a continuation of the downtrend
B) Indicates a potential reversal to an uptrend
C) Indicates market indecision
D) Indicates high volatility
Answer: B) Indicates a potential reversal to an uptrend

6. Which candlestick pattern is often seen at the end of a bullish trend and suggests a bearish reversal?
A) Bullish harami
B) Shooting star
C) Bullish engulfing
D) Morning star
Answer: B) Shooting star

7. What does a “hanging man” candlestick pattern suggest?
A) Strong bullish sentiment
B) Possible bearish reversal
C) Indecision in the market
D) Strong buying pressure
Answer: B) Possible bearish reversal

8. How is the “three black crows” pattern characterized?
A) Three bullish candlesticks
B) Three bearish candlesticks
C) A doji followed by two bearish candles
D) A bullish candle followed by two doji candles
Answer: B) Three bearish candlesticks

9. What is the meaning of the “piercing line” pattern?
A) A continuation of the bearish trend
B) A reversal from a bearish trend to a bullish trend
C) Indecision in the market
D) An indication of high volatility
Answer: B) A reversal from a bearish trend to a bullish trend

10. Which candlestick pattern consists of a large bullish candle followed by a small bearish candle and indicates a continuation of the trend?
A) Bearish engulfing
B) Bullish harami
C) Rising three methods
D) Evening star
Answer: C) Rising three methods