Ebook on Trading Japanese Candlesticks

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INTRO
Welcome to the Bullish Bears candlesticks e-book. This e-book is meant to be a
complement to our candlesticks courses.
If you haven’t taken our candlesticks courses yet, then make sure to take them
below or you can find them on our website at BullishBears.com.
Take our Candlesticks Course. This course covers the most popular candlesticks
patterns and how to trade them.
Take our Advanced Candlesticks Course. This course covers the most popular
reversal candlestick patterns and how to trade them.
Our candlesticks courses are included with our deluxe membership. Subscribe
Here if you’re not a member of our community yet.
Also, make sure to download our custom free candlesticks desktop wall paper
backgrounds that came with our e-book download.
Our e-book and wall paper backgrounds will be helpful resources along your
trading journey.
This e-book is going to give you a summary of the most popular candlesticks
patterns and reversal patterns, where to enter the trade on each pattern, and
where to place your stop loss.

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We recommend using this e-book in conjunction with our candlesticks courses
since our courses give you several real-world video examples on all these
important patterns and how to trade them.
We don’t tell you where to take profits because that’s all a matter of your
personal preference and requires much more in-depth technical analysis and is
very specific to each trading strategy.
If you’re new to trading and want to learn more in depth about different trading
strategies such as day trading, swing trading, options trading, technical analysis,
support and resistance levels, how to get your brokerage account setup, and how
to properly manage risk then make sure to take our trading courses on our
website. ($3,000+ value)
We include all our courses in our deluxe membership package. Subscribe Here if
you’re not a member of our community yet.
We offer live day trade, swing trade, and futures trade rooms for our paid
members to help them learn how to practice trading real-time, and where we do
live mentoring and charting daily.
We highly recommend making at least a couple hundred practice trades in a
virtual account such as ThinkorSwim or Interactive Brokers first before trading
with real money.
There are courses on how to setup ThinkorSwim and Interactive Brokers on our
website to help you get started.
Trading with real money is a lot different than trading in a virtual account. The
emotions of trading can be very difficult and that’s why we can’t stress enough to
practice making hundreds of trades in a virtual account first.
After you’re comfortable and trading consistently in a virtual account then you
could start trading with real money. Start off with small positions and then scale
your way up as you become more confident.
It’s important to shoot for a 60-65% win rate and at least a 2:1 profit/loss ratio
when trading.
This means that you want to be able to have the chance to profit at least 2 times
the amount of what you risk. So, if you are risking a $0.10 stop then you need to
be able to make at least $0.20 on that trade. If you are risking a $0.50 stop then
you need to have the potential to able to make $1.00.

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If you have at least a 60-65% win rate and a 2:1 profit/loss ratio then you have a
good chance of becoming a long-term profitable trader.
It’s important to remember that trading is hard and over 90% of traders will end
up failing. We aren’t trying to discourage you. We are all about being realistic,
upfront and honest with our community.
We strive to help our members make money, however, if we can help our
members discover along the way that trading isn’t a good fit for them then that
makes us happy as well because we want to protect our members from blowing
up their brokerage accounts. It’s important you find a trading niche or edge that
suits your lifestyle. People are different, trade what works for you.
WELCOME TO THE WORLD OF CANDLESTICKS
Who doesn’t love candlesticks? Am I right?! If you’re like most new traders you’re
probably like what the heck is he talking about?! Candlesticks are hard and
confusing. They aren’t fun.
And to that…I’d saying you’re missing the big picture my friend.
Go with me for a second…remember those “magic eye” pictures back in the day?
Those crazy pictures that had a ton of dots in them and you had to stare at them
cross-eyed for hours because your friend or loved one said something like…Do
you see it? Do you see that elephant or giraffe or beach scene?
You’re like what the heck are you talking about?! I don’t see a darned thing but a
bunch of dots. And they are like…it’s right there, just focus your eyes, it will pop
right out at you. Give it time.
After countless hours of frustration one day it hits you out of the blue and you’re
like BAM! It hits you like a ton of bricks. I SEE IT! I SEE THE BIG PICTURE NOW! You
are so excited that you begin to act like your crazy loved ones showing everyone
else the dotted picture and trying to get them to drink the Kool-Aid along with
you.
You are pumped and want everyone else to see what you can now see. Welcome
to the world of CANDLESTICKS my friend!
So, let’s keep things real…at first candlesticks might beat you down. They might
not seem fun. They might frustrate the heck out of you and that’s completely
normal.

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It happens to most traders at first and that’s ok. We wish that there was an easier
way to understand candlesticks but there isn’t.
It takes looking at hundreds if not thousands of charts before candlesticks
patterns will start to pop out at you just like in those magic eye pictures but when
they do your mind will end up being blown.
You’ll be like how the heck did I not see it the whole time? It was right there in
front of me. Don’t beat yourself up. Again, this process is normal. Trading is hard
and requires a lot of studying and commitment, but the effort is very well worth
it.
If you persist as a trader and give candlesticks the respect and studying that they
deserve then you’ll learn a skill that could last you a lifetime.
Candlesticks tell a very important story between the bulls and the bears when
trading. This story forms patterns and these patterns show critical support and
resistance levels. Support and resistance is the name of the game when trading.
Candlesticks are the first and most important line of defense when trading. All the
other technical indicators do not matter unless you know support and resistance
first.
Again, in our candlesticks courses we show you several real-world patterns for the
most popular candlesticks patterns and we teach you about support and
resistance and how to trade these patterns.
Buy low and sell high. Buy at support and sell at resistance levels. Most newbies
do the opposite and that’s how they blow up their brokerage accounts.
Don’t worry, we are all about teaching you how to avoid these fatal mistakes
when trading, however it’s up to you to put in the hard work of investing into
your trading career.
It’s very important to study your tails off if you want to become a long-term
profitable trader. Trading takes hard work and only the strong will survive.
Feel free to print out this e-book, and our candlesticks wallpaper backgrounds and
keep them as a handy resource when you’re trading.
Alright friends…it’s time to begin. Welcome to the world of CANDLESTICKS! Enjoy!

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BULLISH CANDLESTICKS
Bullish candlesticks are a common part of stock charts. In fact, they make up one
of two candlesticks found. The other one is called bearish. The market is a tug of
war between buyers and sellers. This war forms candlesticks. Bullish candlesticks
are formed when buyers (bulls) have control. They’re green or white, depending
on your color preference.
In this e-book we’ve made our bullish candlesticks gold, just to look cool ha-ha.
A bullish candlestick is made up of the price action of the day. The opening price
forms the bottom of the candlestick. The close of the day forms the top of the
candlestick. Any wicks or shadows seen are the highs and lows of the day. You can
see that in the picture above. For bullish candlesticks, the closing price is higher
than the opening price. The color of the candlestick tells traders who was in
control that day.
In the picture above, when trading bullish candlesticks, you want to get an entry
when price breaks above the high of the previous day. The stop loss for a bullish
candlestick is a close below the low of the previous day.

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BEARISH CANDLESTICKS
Bearish candlesticks are formed when sellers have control of the day. Price is
driven down throughout the day. In other words, this candlestick forms when
price opened higher and then closed lower for the day. They are typically red or
black in color, depending on your color preference.
In this e-book we’ve made our bearish candlesticks blue, again just to look cool
ha-ha.
The highs and lows of the day form the wicks or shadows. The open and close of
the day forms the real body. Shorting or purchasing a put option contract are
common ways to trade a bearish candlestick. We recommend option spreads for
a higher win-rate percentage.
The picture above shows where a short would begin. You would take a short or
buy a put option after price breaks the low of the previous days candlestick. Your
stop loss would be set at a close above the high of the previous days candle. A
touch of that high is not a reason to stop out as there are fake outs along with
resistance testing.

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HAMMER (BULLISH)
Hammer candlesticks are bullish reversal candlesticks. They hammer out a base,
so price can go back up. Hammer candlesticks have a small real body with a long
wick at the bottom. This means that sellers tried to drive price down, hence the
long wick, but buyers came back in and drove price back it. It finished near where
it started and had a strong day as you can see in the picture above.
Hammer candlesticks “hammer out” a strong support level. Price then becomes
very attractive to bulls and they stop the panic selling. Look at the picture above
to see the best way to trade the hammer. You would enter a trade when price
breaks the high of the hammer. The stop loss would be set at a close below the
low of the hammer candlestick.

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INVERTED HAMMER (BULLISH)
Inverted hammer candlesticks are bullish reversal candles that form at the bottom
of downtrends. They’re just upside-down hammers as you can see in the picture
above. The hammer has a small real body with a wick that’s at least two times the
size of the real body. There’s usually a very small wick on the bottom if any forms
at all.
This pattern also looks like a shooting star pattern but tells a very different story.
We’ll discuss the shooting star pattern a bit later.
Inverted hammer candlesticks show that the bulls came in and there was buying
pressure. The bulls could not sustain it and price ended up closing near where it
opened because the bears drove price back down.
In the picture above, your entry is placed when price breaks above the high of the
inverted hammer candlestick. Your stop loss should be a candlestick close below
the low of the inverted hammer.

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DRAGONFLY DOJI (BULLISH)
Dragonfly doji candlesticks are members of the doji family which tells of
indecision. The dragonfly doji is one of the most difficult candles to find. It’s in the
shape of a T as the picture above shows. When the dragonfly doji forms, traders
see it as a bullish reversal signal if found at the bottom of a down channel.
The dragonfly doji is formed when sellers have control for most of the day but
then buyers come in and drive price back up to close where it opened. There’s no
real body because price opened and closed around the same levels. The wick is
evidence of selling pressure. There should be no upper wick.
To trade a dragonfly doji, the entry would be when price breaks the high of the
dragonfly. The stop loss is set at the low of the day as you can see in the picture.
Price needs to close below that level to be activated.

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HANGING MAN (BEARISH)
Hanging man candlesticks form at the top of an uptrend to signal a potential
bearish reversal is on the way. The hanging man has a small real body and a wick
below its bottom. This means that there was a large sell off at market open, but
buyers came in and drove price back up. It’s a red flag to buyers that they’re
losing control.
This pattern looks like a hammer, but they tell a different story. Hanging man
candles are found in uptrends rather than in downtrends like a hammer.
The picture above shows the entry for the hanging man at the break of the low of
the hanging man candle. This is where you’d take a short entry or buy a put. The
stop loss would be set at a close above the high of the hanging man candle.

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SHOOTING STAR (BEARISH)
Shooting star candlesticks are bearish candles that form at the top of an uptrend
to signal a potential reversal. Notice in the picture above that the shooting star
looks like just an inverted hammer candlestick. What makes it different is its
placement on a chart. It has a small real body with a long wick. This tells traders
that the stock started strong, but sellers took over and it closed near the opening.
Confirmation of shooting stars are important. The candle that forms after the
shooting star needs to close below it which signals that the reversal is taking
place.
In the picture above, the best entry for a short is when price drops below the base
of the shooting star. The stop loss should be a close above the high of day of the
shooting star.

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GRAVESTONE DOJI (BEARISH)
Gravestone doji candlesticks are the bearish version of the dragonfly doji. It’s
shaped like an upside-down T as seen in the picture above. The gravestone doji is
a bearish reversal candlestick. Bulls had control for a lot of the day, hence the
long wick. The bears came in and drove price back down so that it closed near its
open.
Gravestones are a member of the doji family. This means they’re indecision
candlesticks also. This is a popular reversal sign though.
An entry for a short or put position should be after a break of the close of the
gravestone candlestick as seen above. The stop loss is a close above the high of
day of the gravestone doji.

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DOJI (INDECISION)
Doji candlesticks are indecision candles. They look like a plus sign as seen above.
Buyers and sellers fought to take over but neither side won. Doji candles by
themselves are neutral. It’s when dojis are paired with other candlesticks that
they take on a different meaning, whether bullish or bearish in nature.
Doji candlesticks can be a part of continuation patterns or reversal patterns.
Hence the importance of the candlesticks surrounding a doji. An indecision
candle, such as the doji, tells a story of a shift in control also known as the age-old
war between the bulls and bears.
If you’re going long, then you want to enter a position on a break above the high
of the doji with a candlestick close below the doji as your stop. If you’re going
short on a doji then you want to enter your short when price drops below the low
of the doji using a close above the high of the doji candle as your stop.

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LONG LEGGED DOJI (INDECISION)
Long legged doji candlesticks form the shape of a cross, as seen in the picture
above. This candlestick is one of the more indecisive candlesticks of all the
indecision candles. The reason for this is the small to almost nonexistent real
body in the middle. The upper and lower wicks tell the story of buyers and sellers
trying to wrestle control from the other. It didn’t work.
The same rules apply for trading these candles as you would regular doji
candlesticks. Risk management is a bit more difficult due to the longer wicks and
shadows though so be careful.

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HIGH WAVE CANDLES (INDECISION)
The high wave candlestick in the picture above is the yellow candle in between
the two blue bearish candles. It has a small real body in the middle with a large
upper and lower wick. The high wave candle is another indecision candlestick that
has been coupled with volatility.
This candle is very similar to the long legged doji but has a larger real body.
High wave candles form because traders are confused about the direction of a
stock.
You’ll want to trade this pattern like you would a long legged doji. Risk
management is also a bit more difficult due to the longer wicks and shadows
though so be careful.

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SPINNING TOPS (INDECISION)
Spinning top candles are indecision candlesticks but also can suggest a reversal.
It’s important to see where the spinning top forms in a trend. As the picture
above shows, the spinning top has a small real body with upper and lower wicks
that aren’t long.
Spinning tops form when one side or the other is losing control. A spinning top
forming in an uptrend, means the bulls are losing their stranglehold. The opposite
is true for the bears. A spinning top at the bottom of a downtrend is good news
for buyers.

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GAP UP (BULLISH)
Gap up patterns form when price moves up substantially after hours or
premarket. Good earnings or news is typically the cause of a bullish kicker
pattern. In other words, price moves up a lot after a close so the open of the next
day is a lot higher than the close of the previous day. These gaps form really
strong support and resistance levels.
There’s a saying, all gaps must be filled so pay attention to gap patterns. Price will
fall to fill the gap. It may not happen right away, but it will more than likely
happen at some point down the road. Gap up patterns are bullish because of the
excitement surrounding the stock.

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GAP DOWN (BEARISH)
Bearish kicker aka gap down patterns form when price opens a lot lower than the
previous days close. Again, gap patterns usually occur around earnings or news. If
earnings after hours are bad, then price will typically fall. Any news after hours or
premarket that’s not good will affect the opening of a stock.
The gap then becomes support and resistance. Price will move to test that at
some point in the future. It may not fill it right away, but in the picture above,
notice that price begins to fill the gap shortly after it fell.

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THREE WHITE SOLDIERS (BULLISH)
Three white soldier’s patterns are bullish in nature. They’re made up of three
bullish candles that have long real bodies. Price is moving up like a set of stairs as
the picture above shows. It’s known as a reversal pattern as price moves up
consistently during those three days.
Notice in the picture above that price opens inside the previous day’s candle. This
pattern is a strong reversal pattern especially for swing traders.
The picture above shows the plays you can make with this pattern. Entry on the
break of the first day’s high with a stop at a close below the low of that candle.
Another entry can be seen at the break of the second days high again with a stop
loss at the second days low.

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THREE BLACK CROWS (BEARISH)
Three black crows are the bearish counterpart to the three white soldiers. This
bearish reversal pattern is a strong one. In the photo above, price falls in a series
of three bearish candlesticks.
Each candlestick opens near the close of the previous day. There typically aren’t
any wicks with these candlesticks although that may not always be the case.
To short or play put options with this pattern, get in on the break below the first
candlestick with a stop at a close above the high of the candlestick. The next play
would be a short at the break below the second candle with a stop at the high.

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BULL FLAG (BULLISH)
Bull flag patterns are bullish continuation patterns. This is a very popular chart
pattern and easy to spot. The pole is formed by bullish candles. It can be one long
candle, or a series of candles grouped together. It depends on the timeframe the
pattern is forming on.
The flag is formed by consolidation. Price can either trade sideways or down for a
period. After the formation of the flag the continuation move happens as seen
above.
The entry of a bull flag is at the break above the top of the falling trendline of the
flag. Your stop would be set at a close below the base or middle of the flag.

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RISING THREE (BULLISH)
The rising three method is made up of five candlesticks that signal a continuation.
Notice in the picture above that it looks like a bull flag. It has one long bullish
candlestick, three bearish candlesticks and lastly another bullish candle.
The three bearish candlesticks are a small consolidation period. Sellers try to take
over and they were not successful. Now the bulls are back and in control.
The entry, noted above, is the break of the high of the third bearish candlestick.
The stop is set at the low of the same candlestick.

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BEAR FLAG (BEARISH)
Bear flags are another continuation pattern that is popular and easy to spot on
charts. The flag pole forms as the stock moves down. The flag forms with
consolidation. This consolidation period is one that moves upwards. Then price
breaks down.
A short or put option would be purchased at the break below the trendline of the
flag. The best entry is a break below the low of the last flag candle. The stop is set
at the high or middle of the flag.

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FALLING THREE (BEARISH)
The falling three is a bearish continuation pattern that looks a lot like a bear flag.
It’s made up of five candlesticks. The first candlestick is a bearish candle. The next
three candlesticks are bullish candles. The last candle is another bearish candle.
The bulls try to change the trend but aren’t strong enough to overtake the bears.
The bears come back in after three consolidation days and drive price further
down.
To trade a falling three, a short would be taken after price breaks the low of the
last bullish candlestick. The stop, as seen above, is set at the top of the
consolidation period.

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BULL PENNANT (BULLISH)
Bull pennants are bullish continuation patterns that look a lot like a bull flag. The
difference is the formation of the pennant. The pennant in a bull pennant is
triangular as seen above.
Trend lines are a part of pennants. The trend lines formed during a consolidation
period. Volume is a large part of the pennant formation. The flag pole is formed
by larger volume while the pennant is formed when volume decreases.
The entry of a pennant is at the break above the upper trend line. The stop is a
close below the midway point of the base of the pennant as seen above.

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BEAR PENNANT (BEARISH)
Bear pennants are bearish continuation patterns. The flag pole down is a part of
the trend in place. The consolidation part forms a triangle which is different than
the flag formation.
The consolidation forms as buyers and sellers fight for control. The buyers looked
like they could do it, but they couldn’t. Price then continues downward.
To trade the bear pennant, you would enter a trade at the break below the lower
trend line of the pennant. The stop for this trade would be a close above the
middle of the top of the pennant.

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ASCENDING TRIANGLE (BULLISH)
Triangle patterns are found on most charts. The ascending triangle is typically a
bullish continuation pattern. Trend lines are imperative to forming triangle
patterns. Those trend lines become support and resistance as you can see above.
The horizontal trend line is a strong resistance level that needs to be broken for
the uptrend to continue.
The ascending triangle pattern forms during a consolidation period. You need at
least two highs and lows for this pattern. The more touches to the trend lines the
stronger the pattern.
To trade the ascending triangle, the entry is the candle that breaks above the
upper resistance level. Price may test that a couple times to assure the strength of
the new support level.
This would place the stop about halfway through the formation of the triangle as
seen above. Price would need to close below the halfway point for a stop loss to
trigger.

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DESCENDING TRIANGLE (BEARISH)
Descending triangle patterns are bearish in nature. They form by a downward
sloping tend line that connects with a horizonal trend line. The horizontal trend
line is critical to this formation as it’s support. Price needs to break that support
level for the pattern to be complete.
There needs to be at least two lows that hit the support level to confirm the
descending triangle pattern. This pattern tells traders that the stock is getting
ready to break down, or “spill out” as we say, so traders can be prepared to short
or buy put options.
To trade the descending triangle, a short would be placed when price breaks
below the base of the triangle. The stop loss would be placed at the middle of the
triangle formation as seen above.

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SYMMETRICAL TRIANGLE (INDECISION)
Symmetrical triangle patterns form in both bullish and bearish trends. While
considered indecision patterns, symmetrical triangles can also be a continuation
of the current trend in place. Volume plays an important role in this triangle
formation. The more volume decreases the smaller the triangle gets.
This begins the apex formation. The apex is where the breakout or breakdown
occurs. Since this is an indecision pattern, confirmation of price direction is
needed to trade it. Again, trend lines are very important for triangle patterns.
Once those trend lines break they may be tested to prove their strength.
Entry on a symmetrical triangle is a breakout above the apex point if you’re going
long or a breakdown of the apex point if you’re going short. The stop loss would
be somewhere in the middle of the sloping trendline depending if you’re going
long or short.

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FALLING WEDGE (BULLISH)
Falling wedge patterns are bullish in nature though they may not look like it. As
seen above, price begins to fall in a manner that forms a wedge when trend lines
are drawn. This is a reversal pattern because price reverses at the completion of
the pattern.
Price moves lower as the pattern begins to complete so it forms the shape of a
cone.
The entry of the falling wedge is a break out of the upper sloping trendline. The
stop is a close below the low of the wedge as seen above.

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RISING WEDGE (BEARISH)
Rising wedge patterns are bearish reversal patterns. Price moves up inside trend
lines to form the cone shape. Volume decreases near the top as buying pressure
weakens. The trend lines that form the wedge pattern also act as support and
resistance.
The break of support is imperative to this pattern. Hence the importance of trend
lines as well as support and resistance. Price should have at least two highs and
lows although three would be better as it makes the pattern stronger.
To trade a rising wedge pattern, take a short position when price breaks the lower
trendline near the top of the apex area of the wedge. The stop loss is placed at
the top of the wedge.

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HEAD AND SHOULDERS (BEARISH)
Head and shoulders patterns are bearish in nature and signal a potential trend
reversal. It gets its name from the shape of the pattern, a head, left and right
shoulder along with a neckline. The left shoulder forms a new high then falls. A
head forms as price again moves up and creates a new high. Price then falls
creating a lower high and forming the right shoulder.
The neckline is an important part of this pattern. Price needs to break below the
neckline for the pattern to be confirmed and the reversal to occur.
To trade the head and shoulders pattern, the short or put options can be
purchased at the neckline break. The stop loss is set at a close above the right
shoulder.

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INVERSE HEAD AND SHOULDERS (BULLISH)
Inverse head and shoulders patterns are bullish reversal patterns. The left
shoulder forms as price hits a low then consolidates. The head forms as price falls
again creating a new low, then consolidates. The right shoulder is either equal to
or slightly higher than the left shoulder.
The neckline of this pattern is a key resistance level. Price needs to break above
the neckline for the reversal to take place.
To trade the inverse head and shoulders, your entry would be placed at the break
above the neckline. Your stop would a close below the low of the right shoulder.

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CUP AND HANDLE (BULLISH)
Cup and handle patterns are bullish continuation patterns. The pattern is shaped
like a “U” with a handle that either trades sideways or diagonally downwards. It
looks like a cup and handle, hence the name of the pattern. The cup or “U” shape
is formed by consolidation during a bullish trend. The cup is a key support level.
The more rounded the cup, the better chance for continuation.
The handle forms during a pullback. It doesn’t take as long to form. It always
forms to the right side of the cup.
To trade the cup and handle, take an entry at the break above the top of the cup
and handle. A close below the bottom of the handle is your stop area.

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INVERTED CUP AND HANDLE (BEARISH)
Inverted cup and handle patterns are bearish continuation patterns. It’s an
upside-down cup and handle. The upside-down “U” shape forms during
consolidation. It forms a key resistance level. The more rounded the cup, the
better it is for continuation.
The handle forms during a pullback. It always forms to the right side and is both
support and resistance. The candlesticks making up the handle are important to
pay attention to.
To trade the inverted cup and handle, wait for the break below the support level
of the cup to take a short or put option. In the picture above, the stop is placed at
the high of the handle. Pay attention to where the candle closes for confirmation.

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DOUBLE BOTTOM (BULLISH)
Double bottom patterns are bullish reversal patterns commonly found on charts.
The double bottom forms two equal lows that become a key support level. It’s
shaped like a “W” which means it has two lows with a peak in between.
The first trough forms a new low as part of the trend. A correction takes place,
forming the peak. A second trough forms with a low equal to the first. Price tried
to break that low twice and failed.
An entry for the double bottom would be at the break above the middle peak
area. The stop would be triggered at a close below the low of the second bottom
area.

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DOUBLE TOP (BEARISH)
A double top pattern is a bearish reversal pattern. The bulls tried to push price up
two different times, but the bears would not allow it. The double top is shaped
like an “M”. The two highs should be equal or close together in price. This forms
key resistance levels.
The trough, which is the middle low, is a key support level that comes into play
when trading this pattern.
The entry for a short position or put option is a break below the low of the trough
as seen above. The stop loss should be a candle close above the second peak.

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TRIPLE BOTTOM (BULLISH)
The triple bottom pattern is a bullish reversal pattern. There should be three
equal, or close to equal, lows. This forms a strong support level that the bears
cannot break. Each time the bears try to push price lower, the bulls come in and
stop it.
By the second low, the bulls are gaining momentum to reverse the bearish trend
in place. Once the third low can’t break, the bears give in and allow the bulls to
take control.
To trade the triple bottom, take an entry once price breaks above the resistance
level (the three highs) as seen above. The stop is placed below the low of the third
bottom.

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TRIPLE TOP (BEARISH)
Triple top patterns are bearish reversal patterns that form during an uptrend. The
bulls try three different times to push price higher and each time they fail. The
highs that form is close to equal in price. This forms a strong resistance level that
both the bulls and bears are aware of. Each side sees that it can’t be broken.
The bears see an opportunity to reverse the trend and push price back down. The
triple top can look like a head and shoulders except for the fact that each peak is
near equal in price.
To trade the triple top pattern, take a short entry when price breaks below the
neckline area. Place your stop at the high of the third peak.

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TWEEZER TOPS (BEARISH)
Tweezer top patterns are reversal patterns that are extremely popular among
trend traders. Tweezer tops are made up of two candlesticks with highs that are
exact or close to it in price. When traders see this, they know the current trend is
changing.
The first candlestick could have a longer real body, but this isn’t always the case.
The second candlestick can be any shape or size if the high is equal to the
previous candle.
The second candle either pauses the trend or completely reverses the trend.
To trade the tweezer top, take a short when price breaks the low of the tweezers
as seen above. The stop is placed when price closes above the top of the tweezer
tops.

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TWEEZER BOTTOMS (BULLISH)
Tweezer bottom patterns are made up of two candlesticks that signal a potential
bullish reversal. There are two days with equal lows. This becomes a key support
level that can’t be broken so price turns and heads upwards. The first candle is
usually a part of the current trend.
The second candlestick can be any size or shape. Either bullish or bearish. The
thing that they have in common is their equal lows. This is a popular pattern to
trade.
To place a trade on a tweezer bottom pattern, take an entry when price breaks
above the high of the tweezer bottoms as seen above. The stop is placed when
price closes below the bottoms.

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DARK CLOUD COVER (BEARISH)
Dark cloud cover patterns are made up of two candlesticks. This pattern is a
bearish reversal pattern. This pattern is most effective on daily charts. It forms
when a bearish candlestick puts a dark cloud over the stock.
The first candlestick is a part of the current trend. The second candle opens above
the first, but the bears came in and pushed price down, forming a bearish
candlestick.
To trade a dark cloud cover, take a short position once price breaks the low of the
second candle. The stop is a close above the high of the second candle.

43. 43
PIERCING PATTERN (BULLISH)
Piercing patterns are made up of two candlesticks that signal a potential bullish
reversal. The first candlestick in the pattern is a part of the current downtrend in
place. The bulls then come in and stop the downtrend with intention of taking
over. The second candlestick opens with a new low but ends up closing at the
midway point of the first candlestick.
The second candlestick is usually bullish in nature because price moved up after
the open. It gets its name because the bulls pierce the current downtrend to try
and change it.
To trade a piercing pattern, take an entry after price breaks above the high of the
second candlestick in the pattern as seen above. The stop is a close below the low
of the second candlestick.

44. 44
BULLISH ENGULFING (BULLISH)
The bullish engulfing pattern is a reversal pattern that forms at the end of a
downtrend. It’s made up of two candlesticks. The first candlestick in the pattern is
a small bearish one. The wicks are usually small as there wasn’t a lot of
movement. This allows the second candle to completely engulf the first one.
Hence the pattern name.
The second candlestick is a long bullish candle. It opened low and moved up all
day. The bulls would not allow the continued downtrend and came in to take
over. It shows a lot of buying interest so traders who missed the first wave can
come in. Then price reverses.
To trade a bullish engulfing pattern the entry is a break above the high of the bullish
candlestick. The stop is placed at a close below the low of the bullish candlestick.

45. 45
BEARISH ENGULFING (BEARISH)
The bearish engulfing pattern is a two-candlestick pattern that signals a bearish
reversal. The first candlestick is a small bullish candle usually in keeping with the
current trend. It has a smaller real body with small wicks. This type of candle can
occur near resistance and invite the bears to come in with the next candle.
The second candle is a long bearish candle that completely engulfs the first
candle. That’s how the pattern gets its name. The selling pressure is noticeable,
and the bulls will jump ship allowing the bears to gain control.
To trade the bearish engulfing pattern, take a short position or put option when
price breaks the low of the bearish candlestick. The stop is a close above the
bearish candle high as seen above.

46. 46
BULLISH HARAMI (BULLISH)
The bullish harami pattern is a bullish two candlestick pattern. It signals a
potential reversal. The first candlestick is a long bearish candle. The second
candlestick is a small bullish one that forms inside the first candle. This is how the
pattern gets its name.
Harami is the Japanese word for pregnant. The outline of the pattern looks like a
pregnant silhouette.
To trade the bullish harami, an entry is made when price breaks above the high of
the second candlestick. The stop is placed below the low of the second
candlestick.

47. 47
BEARISH HARAMI (BEARISH)
The bearish harami is a reversal pattern that’s made up of two candlesticks. The
first candlestick is a long bullish candle in keeping with the trend.
The second candlestick is a small bearish candle. It’s small enough to form inside
the first candlestick. This is a signal to traders that sellers are gaining the
momentum.
A short entry or put option would be placed at the break below the low of the
second candlestick. The high of that candle is where the stop is placed.

48. 48
BULLISH HOMING PIGEON (BULLISH)
The bullish homing pigeon is a bullish reversal pattern made up of two bearish
candlesticks. The first candlestick is a long bearish candle. The second candle is a
small bearish candle. The coupling of two bearish candlesticks to signal a bullish
move might seem confusing.
The bullish homing pigeon tells traders that sellers are losing interest in the stock.
To trade the bullish homing pigeon, take a position when price breaks above the
second candles high. The stop is placed below the low of the second candlestick.

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THREE LINE STRIKE (BULLISH)
The three-line strike pattern is made up of four candlesticks. This is a rare pattern
and is harder to find on large timeframes. The first three candlesticks are known
as the strikes. Depending on the trend, they can be bullish or bearish. The last
candlestick in the pattern is a large candlestick that can be bullish or bearish in
nature.
If the three-line strike is bullish, there would be three bearish strike candles and a
long bullish candle as seen above. If bearish, the strike candles would be bullish
with a long bearish candle.
To trade the three-line strike pattern shown above, the entry would be a break
above the high of the third strike candle. The stop is placed below the low of the
third strike candle.

50. 50
MORNING STAR (BULLISH)
The morning star pattern is a bullish reversal pattern made up of three
candlesticks. The first candlestick in the pattern is bearish, in keeping with the
current trend. The second candle is a small candlestick, usually a doji of some
kind. This shows indecision and gives a clue to a potential upcoming reversal.
The last candlestick in the pattern is a large bullish candle. The story this pattern
tells is that the first day the bears were in control. The second day both sides
battled hard, but no decision was made. Hence the indecision. The third
candlestick shows the bulls took full control and sent the bears home.
To trade a morning star, the entry is made after price breaks above the high of the
third candlestick. The stop is placed below the low of the third candlestick.

51. 51
EVENING STAR (BEARISH)
The evening star pattern is a three-candlestick pattern telling of a bearish
reversal. The first candlestick in the pattern is a long bullish candle in keeping with
the uptrend in place. The second candle is a small doji or spinning top candle
which usually trades above the first candlestick. This shows indecision among
traders as neither side gained control that day.
The last candlestick to form the pattern is a long bearish one. The bears finally
took over. This causes a change in direction of price movement.
To trade an evening star, shorts are taken when price breaks below the low of the
third candlestick. The stop is placed above the high of the third candle and
triggered when a close above occurs.

52. 52
THREE INSIDE UP (BULLISH)
The three inside up pattern is made up of three candlesticks. It’s a bullish reversal
pattern. The first candlestick is a long bearish candle in keeping the with the
trend.
The second candle is a small bullish candlestick housed inside the first candle.
Does this look familiar? This is a bullish harami pattern. What makes it a different
pattern is the formation of the third candle.
This should also be a bullish candlestick which confirms the trend. Traders may
trust the three inside up pattern more because of the confirmation candle that
forms.
Take an entry when price breaks above the confirmation candlestick. The stop is
placed below the low of the confirmation candle.

53. 53
THREE INSIDE DOWN (BEARISH)
Three inside down patterns are bearish reversal patterns. Three candlesticks
make up this pattern.
The first candle is a large bullish candle that continues the current trend. The
second candle is a small bearish candlestick engulfed inside the first. A bearish
harami forms.
The third candlestick is the confirmation candle. It is another bearish candlestick
that makes the chances of a reversal even stronger. The confirmation of the trend
reversal is why traders like the three inside down. It gives extra assurance.
To trade the three inside down, the short entry is placed when price breaks below
the low of the confirmation candle. The stop is placed at the high of the
confirmation candle.

54. 54
THREE OUTSIDE UP (BULLISH)
The three outside up pattern is a bullish reversal pattern made up of three
candlesticks. The first candlestick is a smaller bearish candle. This shows
indecision among traders as to the continuation of the current trend.
The second candlestick that forms is a long bullish candle that engulfs the first
candle. Recognize that pattern? It’s a bullish engulfing pattern.
The strength of the three outside up is the formation of a third candle. The first
two form a bullish engulfing pattern but the third candle confirms it. Traders like
that confirmation candle.
Trading the three outside up places the entry at the break above the confirmation
candle. The stop is placed at the low of that candle.

55. 55
THREE OUTSIDE DOWN (BEARISH)
The three outside down pattern is a bearish reversal pattern. Three candlesticks
make up this pattern and house another reversal pattern. The first candlestick is a
small bullish candle in keeping with the trend. It also signals indecision.
The second candlestick that forms is a long bearish candle that engulfs the first.
Hence the formation of the bearish engulfing.
The third candlestick that forms is another bearish candle. This confirms the
reversal of the bullish trend. With the third candle confirmation, a new bearish
trend is in place.
To trade the three outside down, short positions or put option entries are placed
at the break below the low of the confirmation candle. The stop is placed above
the high of the confirmation candle.

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LOOKING FOR MORE?
Sadly friends, our candlesticks e-book has now come to an end. I’m sure you’re
probably like darn…I wish there were a hundred more patterns to learn ha-ha.
We know that there are a ton of patterns to learn and they can seem
overwhelming. You might be wondering how the heck am I going to learn all these
patterns?
Remember our analogy about the magic eye pictures from the beginning of our
ebook? It’s going to take some time to really learn and grasp these patterns.
You may have to look at hundreds if not thousands of charts for them to make
sense. The path to becoming a successful trader is a very narrow road that takes a
lot of hard work and effort.
If you’re willing to put in the effort and time that trading deserves then one day
when you least expect it these patterns are going to start popping right out at
you. You’ll start seeing patterns everywhere, even in everyday life.
You’ll be like…how did I miss it this whole time?! It was right there in front of me.
It’s okay, join the club. It happens to many of us so don’t worry. These patterns
will make sense over time so make sure you’re in it for the long haul.
Again, if you need more help then feel free to take our stock market courses on
our website.
Also, make sure to download our free desktop wall paper backgrounds as well.
These wall paper backgrounds will be very helpful guides for you along your
trading journey. It might also help to print them down and have them handy as
well.

57. 57
IT’S UP TO YOU
The good news and the bad news as a trader is that our successes and failures
when trading rely solely on our own shoulders. Trading is a mental game and we
are in full control of that process.
If you make or lose money in the stock market it has nothing to do with the
markets or other traders. It’s based on your decisions. Every single decision that
you make when trading is your full responsibility.
Never blame the markets or other traders. The market doesn’t care about your
feelings. It’s not out to get you. It has a mind of its own and you must take
responsibility as a trader and accept this fact.
Believe it or not, learning the technical aspects of trading is the easy part. It’s the
emotional aspect of trading that’s the hard part. The reason that most traders fail
is because they can’t overcome the emotional ups and downs of trading.
Trading is hard and only the mentally strong will survive. Do you need to study a
lot and learn the technical aspects of trading? For sure, but like anything in life
you can learn pretty much anything if you put in the time and effort to study.
The emotional aspect to trading is much harder to teach. We are emotional
beings and our emotions can work to our benefit or detriment. If you want to
become a successful trader, then you need to be able to learn how to control your
emotions and fully accept all the risks as a trader.
If you’re not able to fully accept the risks as a trader, then you are going to have a
very difficult time being a consistent and profitable trader. Trading is risky, and
the markets are very unpredictable so it’s incredibly important to accept this fact.
Except the risk, embrace it, and realize that all traders deal in managing risk and
probabilities. Meaning we seek a greater probability for a successful trade
outcome and can increase that probability with experience and skill!
So, what’s it going to be friend? Are you going to fully accept the risks of trading
and put in the study time and give the markets the respect that they deserve?
If you’re ready to get started, then come and Join the Bullish Bears Community.
We’re here to help!

58. 58
BULLISH BEARS COMMUNITY
Who the heck are the Bullish Bears and why should you come and join our
community?
The Bullish Bears team is all about giving back and helping our community
members learn the stock market with a no non-sense approach. We tell it like it is
and don’t sugar coat things.
We aren’t the best traders in the world. We aren’t the best teachers. We aren’t
the best gurus. We aren’t the best looking or the most polished. We could go on
and on…
But here’s what we are…we are a community that cares. We care about your
wellbeing and that you traverse this journey in a safe way. We care about helping
you succeed as a trader or investor, no matter what kind of trader or investor you
wish to be.
We are a community that works hard, is ethical, and knows our stuff. We are
proud of the hard work and knowledge that is a result of that hard work. We want
to share it with others and see you experience success. Why? Because it feels
good to help others!
Do we want everyone to become millionaires and successful traders? Of course,
but that’s not realistic. We are equally as happy helping people protect their
brokerage accounts by telling what they are doing is high-risk and cautioning
them on the dangers of trading. We are here to teach but also here to remind you
to be cautious with your hard-earned money.
That said, we do our best to make learning how to trade affordable for almost
everyone. We are constantly teaching and giving people the knowledge that they
would have to pay thousands elsewhere to receive.
Again, we are all about giving back to our community and that vision is always at
the forefront for us.
Money isn’t our motivator. YOU ARE! Our community is our number one priority.

59. 59
Well friend…this is who we are and what we’re all about. If you like what you hear
then come and join our community. We’d love to have you! If you’re a current
member, then YOU ROCK! We love you and are super appreciative to have you as
a member.
JOIN OUR COMMUNITY
If you’re ready to roll up your sleeves and get to work, then come and join our
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We could go on and on about everything that we offer to our community mem-
bers. The list is quite long, and we always seem to keep finding more ways to give
back and do more along the way.
Our website explains all the goodies that we give away and what’s offered in your
membership. So, if you want to find out more about us or would like to join our
community then feel free to check out our website at BullishBears.com.
Love ya peeps,
Tim, Dan & Lucien
“The Bullish Bears Team"