Nigel's Top 3 Forex Candlestick Reversal Patterns Cheat Sheet - Involves first identifying a preceding trend and then one of the following, Long Wick Reversal, Strong Reversal or a 2 Candle Reversal Candle

1. My Top 3 Candlestick Reversal Patterns Cheat Sheet
by Nigel Price
Author of the Price Action Swing Trading (PAST) Strategy
Details on the Long Wick Reversal, Strong Reversal and 2 Candle Reversal follow...
Preceding
Trend
Preceding
Trend
Preceding
Trend
There are many types of Candlestick Reversal Patterns. Even more so, many of
them have many definitions and names.
I simplify things by using just 3 Candlestick Reversal Patterns...

2. In some shape or form these are sometimes referred to as Pin bars, Hammers, Dojis, etc.
Call them what you like, I use the general catch all term Long Wick Reversal Candle.
The Long Wick Reversal Candle
Buyers push price up, assuming that the preceding trend
is going to continue. But for whatever reason, before the
end of the trading session, the sellers aggressively push
back, wiping out most of the earlier gains.
We are left with a long wick on the candle, and a small
body.
Rules are reversed for the bullish Long Wick Reversal.
The long wick is an indication that the immediate momentum has now switched to the
sellers and that the buyers are on the back foot.
I usually like to see that the wick is around 3 times longer than the size of the body of the
candle before being interested in trading it.
This Long Wick Reversal Candle was identified by the PAST MT4 Price Action Indicator.
Preceding
Trend

3. In some shape or form these are sometimes referred to as Key Reversals, Engulfing candles,
etc. Once again I use a general catch all term, Strong Reversal Candle.
The Strong Reversal Candle
Preceding
Trend
A bearish Strong Reversal Candle occurs when a bearish
candle closes below the open price of the previous bull
candle, like in this example identified by the PAST MT4
Price Action Indicator.
The closing price of the bearish candle is below the open
price of the previous bull candle. This tells us that the
bears have shown enough strength to completely wipe
out the gains made by the previous bullish candle.
Rules are reversed for the bullish Strong Reversal.
When sellers see this, they become bolder and more confident that they can push the
market down. The buyers are becoming uneasy at the show of bearish strength and are
considering taking profit and selling their positions.
Does this candle mean that the bears have enough strength to turn the market around
completely? We don’t know for certain yet, but a sign like this should definitely get us
interested in the possibility that the market is going to change course.

4. In many ways, this pattern is similar to the Strong Reversal Candle. The only real difference
is that it takes 2 candles for the balance of power to shift instead of one.
As usual, we should make sure that there is an existing preceding trend present before
looking for a 2 Candle Reversal.
The 2 Candle Reversal
Preceding
Trend
As we can see, with the 2 Candle Reversal the buyers
manage to generate 2 bullish candles in a row. The
second one closes above the open price of the previous
bearish candle.
Once again, this reversal has been identified by the PAST
MT4 Price Action Indicator.
Rules are reversed for the bearish 2 Candle Reversal.
Now, while this display of strength by the buyers might not be as impressive as the strong
reversal we looked at previously, the fact remains that the balance of power between the
buyers and sellers has now shifted. The buyers are in control, so we should now only be
looking for opportunities to buy.

5. The 3 Candlestick Reversal Patterns I rely on first depend on identifying a preceding trend.
This is covered in detail in my FREE Price Action Swing Trading (PAST) Strategy eBook.
It does take some time, but with a bit of practice, it is NOT very difficult to become quite
skilled at identifying these reversals. It is a very powerful skill to have as a trader, to be able
to judge whether a market is likely to reverse or not - both when you are preparing to open
a new position, and when you are considering taking your profits.
If you would like something to assist you in identifying the 3 Candlestick Reversal Patterns I
use, the PAST MT4 Price Action Indicator does it for you.
To Summarise...
I hope you enjoy identifying and using my
Top 3 Candlestick Reversal Patterns