Candlestick patterns

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  • In the 18th century a wealthy Japanese businessman, Munehisa Homma (a.k.a. Sakata) developed a technical analysis method to analyze the price of rice contracts. Today this technique is called candlestick charting and is widely used when drawing stock charts. Sakata began trading at the local rice exchange around 1750. He kept records of the market psychology learning to boost his profits by carefully monitoring prices and not to rushing into trades. Sakata is regarded as the Grandfather of candlesticks. Candlestick charts use the same price data as bar charts (open, high, low, close). However, candlestick charts are drawn in a much more visually identifiable way typically resembling a candle with wicks on both ends. The high and low are described as shadows and plotted as a single line.Learning how to read candlestick charts is easy. The price range between the open and close is plotted as a rectangle on the single line. If the close is above the open, the body of the rectangle is white. If the close of the day is below the open, the body of the rectangle is red. At HotCandlestick.com we use red to represent blood as in Sakata's references to the battle between the buyers and sellers being analogous to wars waged in ancient Japanese times. More recently in the Western world we refer to the war between bulls and bears. When the bears are winning the war sometimes we hear analysts talk about blood on the street.
  • 1Long white candlesticks indicate that the Bulls controlled the ball (trading) for most of the game. 2Long black candlesticks indicate that the Bears controlled the ball (trading) for most of the game.3Small candlesticks indicate that neither team could move the ball and prices finished about where they started.4A long lower shadow indicates that the Bears controlled the ball for part of the game, but lost control by the end and the Bulls made an impressive comeback.5A long upper shadow indicates that the Bulls controlled the ball for part of the game, but lost control by the end and the Bears made an impressive comeback.6A long upper and lower shadow indicates that the both the Bears and the Bulls had their moments during the game, but neither could put the other away, resulting in a standoff.
  • The Hammer and Hanging Man look exactly alike, but have different implications based on the preceding price action. Both have small real bodies (black or white), long lower shadows and short or non-existent upper shadows. As with most single and double candlestick formations, the Hammer and Hanging Man require confirmation before action.
  • The Hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session. However, the strong finish indicates that buyers regained their footing to end the session on a strong note. While this may seem enough to act on, hammers require further bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further buying pressure, and preferably on expanding volume, is needed before acting. Such confirmation could come from a gap up or long white candlestick. Hammers are similar to selling climaxes, and heavy volume can serve to reinforce the validity of the reversal. The Hanging Man is a bearish reversal pattern that can also mark a top or resistance level. Forming after an advance, a Hanging Man signals that selling pressure is starting to increase. The low of the long lower shadow confirms that sellers pushed prices lower during the session. Even though the bulls regained their footing and drove prices higher by the finish, the appearance of selling pressure raises the yellow flag. As with the Hammer, a Hanging Man requires bearish confirmation before action. Such confirmation can come as a gap down or long black candlestick on heavy volume.
  • The Inverted Hammer and Shooting Star look exactly alike, but have different implications based on previous price action. Both candlesticks have small real bodies (black or white), long upper shadows and small or nonexistent lower shadows. These candlesticks mark potential trend reversals, but require confirmation before action.
  • The Shooting Star is a bearish reversal pattern that forms after an advance and in the star position, hence its name. A Shooting Star can mark a potential trend reversal or resistance level. The candlestick forms when prices gap higher on the open, advance during the session and close well off their highs. The resulting candlestick has a long upper shadow and small black or white body. After a large advance (the upper shadow), the ability of the bears to force prices down raises the yellow flag. To indicate a substantial reversal, the upper shadow should relatively long and at least 2 times the length of the body. Bearish confirmation is required after the Shooting Star and can take the form of a gap down or long black candlestick on heavy volume. The Inverted Hammer looks exactly like a Shooting Star, but forms after a decline or downtrend. Inverted Hammers represent a potential trend reversal or support levels. After a decline, the long upper shadow indicates buying pressure during the session. However, the bulls were not able to sustain this buying pressure and prices closed well off of their highs to create the long upper shadow. Because of this failure, bullish confirmation is required before action. An Inverted Hammer followed by a gap up or long white candlestick with heavy volume could act as bullish confirmation.
  • Dragon fly doji form when the open, high and close are equal and the low creates a long lower shadow. The resulting candlestick looks like a "T" with a long lower shadow and no upper shadow. Dragon fly doji indicate that sellers dominated trading and drove prices lower during the session. By the end of the session, buyers resurfaced and pushed prices back to the opening level and the session high. The reversal implications of a dragon fly doji depend on previous price action and future confirmation. The long lower shadow provides evidence of buying pressure, but the low indicates that plenty of sellers still loom. After a long downtrend, long black candlestick, or at support, a dragon fly doji could signal a potential bullish reversal or bottom. After a long uptrend, long white candlestick or at resistance, the long lower shadow could foreshadow a potential bearish reversal or top. Bearish or bullish confirmation is required for both situations. Gravestone DojiGravestone doji form when the open, low and close are equal and the high creates a long upper shadow. The resulting candlestick looks like an upside down "T" with a long upper shadow and no lower shadow. Gravestone doji indicate that buyers dominated trading and drove prices higher during the session. However, by the end of the session, sellers resurfaced and pushed prices back to the opening level and the session low. As with the dragon fly doji and other candlesticks, the reversal implications of gravestone doji depend on previous price action and future confirmation. Even though the long upper shadow indicates a failed rally, the intraday high provides evidence of some buying pressure. After a long downtrend, long black candlestick, or at support, focus turns to the evidence of buying pressure and a potential bullish reversal. After a long uptrend, long white candlestick or at resistance, focus turns to the failed rally and a potential bearish reversal. Bearish or bullish confirmation is required for both situations. Before turning to the single and multiple candlestick patterns, there are a few general guidelines to cover
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long black day.Three small body candlesticks follow the 1st day. Each trends upward and closes within the range of the 1st day.The last day is a long black day and closes below the 1st day's close.nonePsychology...This is a formation which shows the market taking a breather before continuing it's downtrend. Notice that a new high is not seen during the 4 remaining days of this formation. This gives little confidence to the bulls, making way for the short sellers.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is a white day whose body gaps up.3rd & 4th days close higher each day.5th day is a long black day that closes inside the gap created by the 1st and 2nd days.nonePsychology...The up trend is accelerated by a gap up. The next few days trend up, however start to run out of steam. The last day of the formation shows a breakdown and close below the previous 3 days, however the gap created on the 1st day remains unfilled. Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st three days make up the Three Black Crows formation.The last day is a white day that opens below the 3rd day and closes above the 1st day's open.Bearish Three Black Crows Psychology...The 4th day is a powerful move up which could represent a lot of short covering. Since the reversal has already played out in a matter of one day, the risk is now higher for those who wish to bet on a reversal. The downtrend should resume.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st two day are long black days with a gap between them.3rd day is a white day that fills the gap of the 1st two days.Bearish Downside Tasuki Gap Psychology...The gap down on the 2nd day gets filled by the 3rd day. More investigation of the previous weeks is recommended in order to see if this is the first gap. If so, then this pattern is probably displaying short covering to 'close the gap' created and the bearish trend should continue.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st two days are black days with a down gap between the 1st and 2nd day.3rd day is a white day which opens within the body of the 2nd day and closes within the gap between the 1st and 2nd days.3rd day should not fully close the gap.Bearish Downside Gap Three Methods Psychology...The gap down on the 2nd day does not get filled by the 3rd day. This suggests that the downtrend will continue.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a black day.2nd day is a white day which gaps below the 1st day's open.3rd day is a white day about the same size as the 2nd day, opening at about the same price.nonePsychology...The 2nd and 3rd days are a failed attempt to rally. Shorts are basically taking profit here. The downtrend remains intact.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a white day.2nd day is a doji whose shadows gaps above the 1st day's close.3rd day is a black day that gaps down and contains no overlapping shadows.Special case of the Bearish Doji Star Psychology...The gap up on the second day encourages the bulls, however the close on the second day is nearly the same as the open on the second day. This could be a sign of temporary profit taking by the longs, however the third day reveals that the more likely scenario is indecision on the second day. Watch for additional downside price action in the next few days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThree consecutive white days with higher closes each day.Each day opens within the previous body.Each day displays deterioration of the upward move as shown with the long upper shadows on the 2nd and 3rd days.Bullish Three White Soldiers Deliberation Psychology...This formation is similar to the Bullish Three White Soldiers formation. However, the Bearish Advance Block chart alerts traders to the weakness of the upside price action since the close of the second and third days are significantly less than their highs.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThree consecutive up days (1st two long days) with higher opens and closes each day.3rd day gaps above the 2nd day's close. Some texts show the 3rd day as closing near the 2nd day. HotCandlestick.com diverges from this philosophy since any small body candlestick on the 3rd day shows weakness. Some might argue that the greater the gap above the 2nd day, the more likely a short term pullback is in order. Granted, a large gap may signal a continuation of the uptrend, but the opportunity to capitalize on a profit for an immediate pullback prior to the return of the uptrend should not be ignored. Stops should be in place when trading in order to minimize potential losses.3rd day is usually a spinning top or star (small body).Three White Soldiers Bearish Advance Block Bearish Evening Star Psychology...This formation is very similar to the Bearish Advance Block. The key difference is that all of the weakness shows up on the 3rd day. The first two days have powerful upward moves. The quick change in sentiment opens the window for daytraders to initiate shorts or capture profits.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is a doji which gaps above the 1st day's close.3rd day is a black day.Bearish Doji Star Psychology...The bearishness of the doji star created on the 1st two days is confirmed with the 3rd day. If the penetration of the 3rd day is more than 50 percent, then this formation has a much better chance to succeed for the trader.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day gaps above the 1st day's close.3rd day is a long black day.Bearish Evening Doji Star Bearish Abandoned Baby Bearish Tri-Star Psychology...The 2nd day gaps higher, but trades in a small range. The bearishness of this indecision is confirmed by the lower close of the 3rd day. Look for lower prices.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThree consecutive long black days with lower closes each day.Each day opens at the previous day's close.Bearish Three Black Crows Psychology...This formation could represent panic selling. Each closing price establishes the opening price for the next trading day. Additional downside price action should follow.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThree consecutive black days with lower closes each day.Each day opens within the body of the previous day.Bearish Identical Three Crows Psychology...Pervasive profit taking takes its toll on those who remain long. This induces a snowball selling effect in the coming days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st two days form a bearish harami.3rd day closes lower than the 2nd day.Bearish HaramiBearish Harami Cross Psychology...This is the confirmation signal of the Bearish Harami formation.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalBearish Engulfing formation occurs making up the 1st two days.The 3rd day closes lower than the 2nd day.Engulfing is a sub-formation. Psychology...This is the confirmation of the Engulfing formation.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalAll three days are doji days.2nd day gaps above the 1st and 3rd days.none Psychology...This formation is rare, so always be suspect of the data. This pattern is not reliable for stocks with low volume. The huge amount of indecision created by these three dojis must not be ignored by traders. This level of indecision strongly suggests that the trend is about to change.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day gaps up and is black.3rd day is black and opens inside the body of the 2nd day, then closes inside the body of the 1st day.Bearish Dark Cloud Cover Bearish Upside Gap Two Crows Bearish Evening Star Psychology...The gap created on the 2nd day gets filled by the 3rd day. This quick pull back does not bode well for the bulls. This price action indicates a short term top.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is black and gaps above the 1st day.3rd day is black and opens above and engulfs the 2nd day.3rd day closes above the close of the 1st day.Bullish Mat Hold Bearish Evening Star Psychology...The gap created on the 2nd day has already started to be tested by the 3rd day. Two consecutive lower closes places a damper on the bullishness. Look for lower prices and the gap to be filled soon.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long black day.2nd day is a white day which opens below the low of the 1st day.2nd day closes barely into the body of the 1st day.Bullish Piercing Line Bearish On Neck Bearish Meeting Lines Psychology...Identical to the Bearish On Neck formation, except the downtrend may not continue as quickly.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long black day.2nd day is a white day which opens below and closes at the low of the 1st day.Bullish Piercing Line Bearish In Neck Bearish Thrusting Psychology...The 2nd day is unable to close above the 1st day's low. This should bring some discomfort to the longs that entered on the 2nd day. The downtrend should continue shortly.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long white day.2nd day is a black day that opens at the opening price of the 1st day.Bearish Meeting Lines Psychology...The long white day produces skepticism in the bear market. The next day the long black day that forms eases concerns by the shorts. The downtrend should resume.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a black day.2nd day is a white day which opens well below the low of the 1st day.2nd day closes well into the body of the 1st day, but below the midpoint.Bullish Piercing Line Bearish On Neck Bearish In Neck Psychology...This formation underscores the lack of buyers. Even though the 2nd day is an up day, it's still unable to close above the midpoint of the previous day's body. This suggests that the downtrend will continue.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is a black day which opens above the 1st day's high.2nd day closes within the 1st day, but below the midpoint.nonePsychology...A long white candlestick is formed on the 1st day and a gap up is created on the 2nd day. This is encouraging to the bulls. However, the 2nd day closes below the midpoint of the 1st day. Longs quickly question their strategy.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is a doji day that gaps above the 1st day.The doji shadows shouldn't be excessively long.The Bearish Doji Star is the 1st two days of the Bearish Evening Doji Star formation. Psychology...The uptrend is in full force with a strong 1st day. All confidence built up by the bulls from the 1st day is destroyed when the 2nd day's gap up closes near its open. Profit takers will quickly appear if the next day opens lower.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe color of the 1st day's body reflects the trend, however could be a doji.The 2nd day's real body engulfs the 1st day's body.The Bearish Engulfing formation is the start of the Bearish Three Outside Down candlestick pattern.Psychology...If not much volume occurs on the 1st day of the Bearish Engulfing formation compared to the 2nd day, then this increases the strength of the pattern. The 2nd day opens above the close of the 1st day, however quickly sells off to finally close below the open of the 1st day. This damages the spirits of the longs and brings into question the bull trend which prompts additional selling in the coming days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe 1st day is a long white day.The 2nd day is a short day whose body is engulfed by the 1st day's body.The Bearish Harami formation is the 1st two days of the Bearish Three Inside Down formation. Psychology...A long 1st day with high volume in the existing uptrend brings complacency to the bulls. The next day trades in a small range within the previous day's real body. Light volume on the 2nd day should give rise to concern by the bulls of an impending change of trend. Look for lower prices over the coming days, especially if the next day provides confirmation of a trend change by closing lower.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe 1st day is a long white day.The 2nd day is a doji day that is engulfed by the 1st day's body.The Bearish Harami Cross could be 1st two days of the Bullish Rising Three Methods formation. Psychology...The 2nd day's price range does not pierce the previous day's range and closes about where it opened. Volume on the 2nd day is low which indicates that traders are lacking enough information to decide whether to go long or short.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a white marubozu.2nd day is a black marubozu and gaps open below the 1st day's open.Bearish Separating Lines Psychology...The gap created by the 2nd day becomes a resistance area. Expect lower prices and for the gap to be tested before breaking back to the upside.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long white day.2nd day is a long black day and closes at the 1st day's close.Bearish Separating Lines Bearish Dark Cloud Cover Psychology...An up day followed by a down day that closes at the previous day's close gets traders to bet on a reversal. It's probably a good idea to wait for confirmation of the downtrend. This would be a lower close the next day.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalPrice gap open to the upside.Small real body formed near the bottom of the price range.The upper shadow at least three times as long as the body.The lower shadow is small or nonexistent.Gravestone DojiPsychology...The long upper shadow and small real body at the bottom of the trading range are cause for concern by the bulls. They wonder if this is the end of the uptrend and take measures to protect their gains.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalLong black day where the open is equal to the high.No upper shadow.MarubozuPsychology...A significant gap up occurs. The remaining price action for the day occurs to the downside. This triggers new short positions to be taken. Concern over this price action re-enforces the selling.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalSmall real body at the upper trading range.Color of the body is not important.Long lower shadow at least twice the length of the body.Little or no upper shadow.Previous trend should be bullish.Bearish Hanging Man is a special case of the Dragonfly Doji.Psychology...As with any single candlestick, confirmation is required. The Hanging Man formation shows the price goes much lower than the open then closes near the opening price. This could mean that many longs have positions that they are attempting to sell. Ideally, a black real body Hanging Man with a lower open the following day could be a bearish signal for the days ahead.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day consists of a long body candle.2nd day consists of a short body candle that has a high equal to the prior day's high.The color of each candle body is not considered in the matching of this pattern.Bearish Harami Cross Psychology...The price action has trended upward then 2 consecutive days of equal highs signal resistance. This could signal a short term top is forming.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long white day.2nd day is a black day that gaps above the 1st day.The next two days are small body days which trend lower and stay within the range of the 1st day.The last day is a white day which closes above the previous four day's range.Bullish Rising Three Methods Psychology...This is a resting pattern for the bulls. The 2nd day still closes at a new high and the 4th day still closes above the 1st day's open. Bears worry that a reversal in not in the cards this time. Hence, the bullish trend continues on the 5th day.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long white day.Three small body candlesticks follow the 1st day. Each trends downward and closes within the range of the 1st day.The last day is a long white day and closes above the 1st day's close.Bullish Mat HoldPsychology...This is a formation which shows the market taking a breather before continuing its uptrend. Notice that a new low is not seen during the 4 remaining days of this formation. This gives confidence to the bulls, making way for the next move upward in price.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a black day whose body gaps down.3rd & 4th days close lower each day.5th day is a long white day that closes inside the gap created by the 1st and 2nd days.nonePsychology...The down trend is accelerated by a gap down. The next few days trend down, however start to run out of steam. The last day of the formation shows a breakout and close above the previous 3 days, however the gap created on the 1st day remains unfilled. Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st three days are long black days with lower opens and closes each day.4th day is a black day with an upper shadow.The last day is white that opens above the body of the 4th day.Bullish Concealing Baby Swallow Bearish Three Black Crows Psychology...In a downtrend and after moving solidly down for three consecutive days, the bears feel in control. The 4th day prices trade near the open of the previous day, but close at another new low. This draws attention to the bears who realize that markets do not go down forever. If the next day opens higher, then shorts will lock in profits. And if volume is high, then a reversal has probably occurred.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st three days make up the Three White Soldiers formation.The last day is a black day that opens above the 3rd day and closes below the 1st day's open.Bullish Three White Soldiers Psychology...The 4th day is a powerful move down which destroys the reversal sentiment. Since the reversal has essentially already played out in a matter of one day, the risk is now higher for those who wish to bet on a reversal. The uptrend should resume.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st two days are black marubozu days.3rd day is black and opens with a gap down as well as a long upper shadow that trades into the body of the 2nd day.4th day is black and completely engulfs the 3rd day.Bearish Three Black Crows Bullish Ladder Bottom Psychology...The bears are in control for the 1st two days of this formation. However, the high on the 3rd day trades above the close of the previous day. And, a strong upward opening gap appears the last day. Since the last day closes at a new low, then this is the perfect opportunity for shorts to cover their positions. Strong short covering should propel the price upward in the coming days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st two days are white days with an up gap between the 1st and 2nd day.3rd day is a white day about the same size as the 2nd day, opening at about the same price.nonePsychology...The 2nd and 3rd days are a failed attempt to reverse the uptrend. The uptrend remains intact.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st two day are long white days with a gap between them.3rd day is a black day that fills the gap of the 1st two days.Bullish Upside Tasuki Gap Psychology...The gap up on the 2nd day gets filled by the 3rd day. More investigation of the previous weeks is recommended in order to see if this is the first gap. If so, then this pattern is probably displaying short selling to 'close the gap' created and the bullish trend should continue.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st two days are white days with an up gap between the 1st and 2nd day.3rd day is a black day which opens within the body of the 2nd day and closes within the gap between the 1st and 2nd days.3rd day should not fully close the gap.Bullish Upside Gap Three Methods Psychology...The gap up on the 2nd day does not get filled by the 3rd day. This suggests that the uptrend will continue.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a black day.2nd day is a doji whose shadows gaps below the 1st day's close.3rd day is a white day with no overlapping shadows.Special case of the Bullish Doji Star Psychology...The gap down on the second day encourages the bears, however the close on the second day is nearly the same as the open on the second day. This could be a sign of temporary profit taking by the shorts, however the third day reveals that the more likely scenario is indecision on the second day. Watch for upside price action in the next few days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a doji which gaps below the 1st day's close.3rd day is a white day.Bullish Doji Star Psychology...The bullishness of the doji star created on the 1st two days is confirmed with the 3rd day. If the penetration of the 3rd day is more than 50 percent, then this formation has a much better chance to succeed for the trader.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day gaps below the 1st day's close.3rd day is a long white day.Bullish Morning Doji Star Bullish Abandoned Baby Bullish Tri-Star Psychology...The 2nd day gaps lower, but trades in a small range. The bullishness of this indecision is confirmed by the higher close of the 3rd day. Look for higher prices.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is black.2nd day is white and trades above the close of the 1st day.3rd day is black with a close equal to the 1st day.Bullish Engulfing Psychology...The price action of the 2nd day suggests that the downtrend is over. The next day opens higher, but sells off to close at the close of the 1st day. The 3rd day's close can be viewed as closing at a short term support level. Watch for confirmation via a higher close the next day.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st two days form a bullish harami.3rd day closes higher than the 2nd day.Bullish HaramiBullish Harami Cross Psychology...This is the confirmation signal of the Bullish Harami formation.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st two days create a bullish engulfing formation.3rd day closes higher than the 2nd day.Bullish Engulfing is a sub-formation. Psychology...This is the confirmation of the Engulfing formation.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day with a long lower shadow.2nd day is a small version of the 1st day with a lower above the 1st day's low.3rd day is a small black Marubozu which opens and closes inside the 2nd day's range (high-low).Bearish Three Black Crows Psychology...Notice that each day's price range is engulfed by the previous day's range. In a downtrend this gives rise to indecision and increased risk for the bears to remain short. Look for higher prices ahead.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThree consecutive long white days with higher closes each day.Each day opens within the previous body.Bearish Advance Block Bearish Deliberation Psychology...This formation represent powerful unabated buying. Shorts would be wise to stay away from this steam engine. Longs should be prepared for a rest before proceeding on to higher prices.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalAll three days are doji days.2nd day gaps below the 1st and 3rd days.none Psychology...This formation is rare, so always be suspect of the data. This pattern is not reliable for stocks with low volume. The huge amount of indecision created by these three dojis must not be ignored by traders. This level of indecision strongly suggests that the trend is about to change.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is black forming a harami.2nd day's low sets a new low.3rd day is a short white day which is below the 2nd day.Bullish Morning Star spin off Psychology...The 1st day's long black candlestick enforces the bears position. The next day a new low is set, however it closes higher than the 1st day. The 3rd day produces some indecision on the part of the bears. Watch for the reversal confirmation of a new high on the next day.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Continuation1st day is a long black day.2nd day is a white day that opens at the opening price of the 1st day.Bullish Meeting Lines Psychology...The long black day produces skepticism in the bull market. The next day the long white day that forms eases concerns of the bulls. The uptrend should resume.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a doji day that gaps below the 1st day.The doji shadows shouldn't be excessively long.The Bullish Doji Star is the 1st two days of the Bullish Morning Doji Star formation. Psychology...The downtrend is in full force with a strong 1st day. All confidence built up by the bears from the 1st day is destroyed when the 2nd day's gap down closes near it's open. Short covering will quickly appear if the next day opens higher.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe color of the 1st day's body reflects the trend, however could be a doji.The 2nd day's real body engulfs the 1st day's body.The Bullish Engulfing formation is the start of the Bullish Three Outside Up formation. Psychology...If not much volume occurs on the 1st day of the Bullish Engulfing formation compared to the 2nd day, then this increases the strength of the pattern. The 2nd day opens below the close of the 1st day, however quickly rallies to close above the open of the 1st day. This damages the spirits of the shorts and brings into question the bear trend which prompts additional buying in the coming days.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe 1st day is a long black day.The 2nd day is a short day whose body is engulfed by the 1st day's body.The Bullish Harami formation is the 1st two days of the Bullish Three Inside Up formation. Psychology...A long 1st day with high volume in the existing downtrend brings complacency to the bears. The next day trades in a small range within the previous day's real body. Light volume on the 2nd day should give rise to concern by the bears of an impending change of trend. Look for higher prices over the coming days, especially if the next day provides confirmation of a trend change by closing higher.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalThe 1st day is a long black day.The 2nd day is a doji day that is engulfed by the 1st day's body.The Bullish Harami Cross formation could be 1st two days of the Bearish Falling Three Methods formations. Psychology...The 2nd day's price range does not pierce the previous day's range and closes about where it opened. Volume on the 2nd day is low which indicates that traders are lacking enough information to decide whether to go long or short.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a short black day which is engulfed by the 1st day's range.Bullish HaramiPsychology...The 2nd day shows a deterioration of the prior downtrend. If the prior downtrend is severe, then this offers the opportunity to exit short positions or initiate long positions.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalSmall real body formed near the bottom of the price range.The upper shadow is no more than two times as long as the body.The lower shadow is small or nonexistent.The Inverted Hammer formation could become the middle day of the Bullish Morning Star formation. Psychology...The long upper shadow and small real body at the bottom of the trading range are cause for concern by the bears. They wonder if this is the end of the downtrend and take measures to protect their gains. If the next day opens above the body of the Inverted Hammer, then expectations could be for shorts to cover and propel a reversal rally.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a black marubozu.2nd day is a white marubozu and gaps open above the 1st day's close.Bearish Separating Lines Psychology...The gap created by the 2nd day becomes a support area. Expect higher prices and for the gap to be tested before breaking back to the downside.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a black day with a close equal to the 1st day.Bullish Homing Pigeon Psychology...Getting two days with equal closes should alert the shorts that an important support level may have been found in last 10 weeks. Higher prices may be ahead in the days to come. A higher close the next day would serve as confirmation of the reversal.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black day.2nd day is a long white day and closes at the 1st day's close.Bullish Separating Lines Bullish Piercing Line Psychology...A down day followed by an up day that closes at the previous day's close gets traders to bet on a reversal. It's probably a good idea to wait for confirmation of the downtrend. This would be a higher close the next day.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day is a long black body.2nd day is a white body which opens below the low of the 1st day.2nd day closes within, but above the midpoint of the 1st day's body.Bearish On Neck Bearish In Neck Bearish Thrusting Psychology...The gap down on the 2nd day perpetuates the downtrend. However, the 2nd day's close is above the midpoint of the 1st day's body. This suggests to the bears that a bottom could be forming. This price action is not nearly as discernable using bar charts as it is with candlestick charts. The more penetration of the close on the 2nd day to the 1st day's body, the more probable the reversal signal will succeed.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalLong white day where the open is equal to the low.No lower shadow.MarubozuPsychology...A significant gap down occurs. The remaining price action for the day occurs to the upside. This triggers a buying spree. Shorts cover their positions due to concern over this price action.
  • This pattern signals a trend...How to identify... Similar pattern(s)... ReversalSmall real body at the upper trading range.Color of the body is not important.Long lower shadow at least twice the length of the body.Little or no upper shadow.Previous trend should be bearish.Bullish Hammer is a special case of the Dragonfly Doji.Bearish Hanging Man. Psychology...As with any single candlestick, confirmation is required. The Bullish Hammer formation shows the price goes much lower than the open then closes near the opening price. This fact reduces the confidence of the bears. Ideally, a white real body Hammer with a higher open the following day could be a bullish signal for the days ahead.
  • This pattern signals a trend...How to identify... Similar pattern(s)... Reversal1st day consists of a long body candle.2nd day consists of a short body candle that has a low equal to the prior day's low.The color of each candle body is not considered in the matching of this pattern.Bullish Harami Cross Psychology...The price action has trended downward then 2 consecutive days of equal lows signal support. This could signal a short term bottom is forming.
  • Candlestick patterns

    1. 1. Candlestick Chart Basics Technical Analysis
    2. 2. Candlestick
    3. 3. C vs L
    4. 4. Bearish Patterns
    5. 5. Bearish Falling Three Methods
    6. 6. Bearish Breakaway Bearish Breakaway
    7. 7. Bearish Three Line Strike
    8. 8. Bearish Downside Gap Three Methods
    9. 9. Bearish Downside Tasuki Gap
    10. 10. Bearish Side-by-Side White Lines
    11. 11. Bearish Abandoned Baby
    12. 12. Bearish Advance Block
    13. 13. Bearish Deliberation
    14. 14. Bearish Evening Doji Star
    15. 15. Bearish Evening Star
    16. 16. Bearish Identical Three Crows
    17. 17. Bearish Three Black Crows
    18. 18. Bearish Three Inside Down
    19. 19. Bearish Three Outside Down
    20. 20. Bearish Tri-Star
    21. 21. Bearish Two Crows
    22. 22. Bearish Upside Gap Two Crows
    23. 23. Bearish In Neck
    24. 24. Bearish On Neck
    25. 25. Bearish Separating Lines
    26. 26. Bearish Thrusting
    27. 27. Bearish Dark Cloud Cover
    28. 28. Bearish Doji Star
    29. 29. Bearish Engulfing
    30. 30. Bearish Harami
    31. 31. Bearish Harami Cross
    32. 32. Bearish Kicking
    33. 33. Bearish Meeting Lines
    34. 34. Bearish Shooting Star
    35. 35. Bearish Belt Hold
    36. 36. Bearish Hanging Man
    37. 37. Bearish Tweezer Top
    38. 38. Bullish Patterns
    39. 39. Bullish Mat Hold
    40. 40. Bullish Rising Three Methods
    41. 41. Bullish Breakaway
    42. 42. Bullish Ladder Bottom
    43. 43. Bullish Three-Line Strike
    44. 44. Bullish Concealing Baby Swallow
    45. 45. Bullish Side-by-Side White Lines
    46. 46. Bullish Upside Gap Three Methods
    47. 47. Bullish Upside Tasuki Gap
    48. 48. Bullish Abandoned Baby
    49. 49. Bullish Morning Doji Star
    50. 50. Bullish Morning Star
    51. 51. Bullish Stick Sandwich
    52. 52. Bullish Three Inside Up
    53. 53. Bullish Three Outside Up
    54. 54. Bullish Three Stars in the South
    55. 55. Bullish Three White Soldiers
    56. 56. Bullish Tri-Star
    57. 57. Bullish Unique Three River Bottom
    58. 58. Bullish Separating Lines
    59. 59. Bullish Doji Star
    60. 60. Bullish Engulfing
    61. 61. Bullish Harami
    62. 62. Bullish Harami Cross
    63. 63. Bullish Homing Pigeon
    64. 64. Bullish Inverted Hammer
    65. 65. Bullish Kicking
    66. 66. Bullish Matching Low
    67. 67. Bullish Meeting Lines
    68. 68. Bullish Piercing Line
    69. 69. Bullish Belt Hold
    70. 70. Bullish Hammer
    71. 71. Bullish Tweezer Bottom

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