Candlestick Patterns
Bullish patterns
Hammer
The Hammer is an important bullish pattern indicating a downtrend is reversing. his candlestick has a small hollow real body and a long lower shadow (at least twice the height of the real body) and little or no upper shadow.
Bullish Engulfing
The Bullish Engulfing pattern is an important bottom reversal signal occurring at the end of a downtrend. This pattern comprises two candlesticks: a large hollow real body follows and engulfs a small filled real body in a downtrend. The opposite pattern is the Bearish Engulfing pattern.
Piercing
A Piercing pattern is a bullish pattern and is a bottom reversal signal. In a downtrend, a candlestick with a long filled real body is followed by a long hollow candlestick which starts at the same level or lower but closes more than halfway up the filled candlestick’s real body.
Morning Star
The Morning Star is a three-candlestick pattern signalling a bullish reversal. It is the same as the Morning Doji Star but is considered less bullish. The first candlestick has a filled real body, the second has a small real body (hollow or filled) which opens and closes lower than the previous candlestick’s real body. The third candlestick has a long hollow real body and and ideally, it should close well into the first candlestick’s real body. he opposite pattern in the Evening Star.
Morning Doji Star
The Morning Doji Star is a three-candlestick pattern signalling a bullish trend reversal. It is the same as the Morning Star but is considered more bullish. The first candlestick has a filled real body, the second is a “doji” (a candlestick with no real body or a very small one). The doji is positioned lower than the previous candlestick’s real body. The third candlestick has a long hollow real body and ideally, it should close well into the first candlestick’s real body. The opposite pattern in the Evening Doji Star.
Bullish Abandoned Baby
The Bullish Abandoned Baby is a rare bullish pattern indicating reversal of a downtrend. It is similar to the Morning Star and the Morning Doji Star. This pattern comprises a “doji” (a candlestick with no real body or a very small one) sitting between two candlesticks. The entire doji including its shadows is positioned below the candlesticks on either side. The opposite pattern is the Bearish Abandoned Baby.
Inverted Hammer
The Inverted Hammer is a bullish pattern. It follows a downtrend and signifies a possible trend reversal or support level. This signal needs bullish confirmation. This candlestick has a small hollow real body and long upper shadow with very little or no lower shadow. The opposite pattern is the Shooting Star.
Bullish Harami
The Bullish Harami is a pattern suggesting that the preceding downtrend has ended. This pattern comprises two candlesticks: a candlestick with a small real body following one with an unusually large real body. The real body of the second candlestick (and possibly its shadows too) is completely contained within the range of the preceding larger real body. Often the second candlestick will have the opposite colour to the first. Note: harami means pregnant in Japanese. The opposite pattern is the Bearish Harami.
Bullish Harami Cross
The Bullish Harami Cross pattern is an important bullish pattern suggesting that the preceding downtrend has ended. This pattern is similar to the Bullish Harami. It comprises two candlesticks: a “doji” (a candlestick with no real body or a very small one) following one with an unusually large filled real body. The doji is completely contained within the range of the preceding larger real body. The opposite pattern in the Bearish Harami Cross. Note: harami means pregnant in Japanese.
Bullish Belt Hold
The Bullish Belt Hold is a tall hollow candlestick that opens on its low (i.e. there is no lower shadow). This is interpreted as a bullish sign in areas where prices are low. The opposite pattern is the Bearish Belt Hold.
Bullish Counter
The Bullish Counter-attack Line can be interpreted as a stalemate between the bulls and bears. The pattern consists of a filled candlestick followed by a hollow one in a downtrend. Both have the same close price, i.e. their real bodies start on the same ‘line’. They then extend in opposite directions. The opposite pattern is the Bearish Counter-attack Line.
Bullish Doji
The Bullish Doji pattern appears near the bottom in a distinct downtrend signalling a possible reversal.
This pattern consists of two candlesticks. A long filled one is followed by a “doji” (a candlestick with no real body or a very small one). The opposite pattern in the Bearish Doji.
Bearish patterns
Hanging Man
The Hanging Man is an important bearish pattern, signalling that an uptrend is reversing. The market has become vulnerable. This candlestick has a small filled real body and a long lower shadow (two or three times the height of the real body) and little or no upper shadow.
Bearish Engulfing
The Bearish Engulfing pattern is an important top reversal signal occurring at the end of an uptrend.
This pattern comprises two candlesticks: a large filled real body follows and engulfs a small hollow real body in a downtrend. The opposite pattern is the Bullish Engulfing pattern.
Dark Cloud Cover
The Dark Cloud Cover pattern is a bearish pattern signalling a reversal in an uptrend. This pattern consists of two candlesticks. A long hollow candlestick is followed by a filled one which opens above the hollow candlestick’s high. The filled candlestick then closes a good way inside the hollow candlestick’s real body.
Evening Star
The Evening Star is a three-candlestick pattern signalling a bearish reversal. It is the same as the Evening Doji Star but is considered less bearish. The first candlestick has a hollow real body. The second has a small real body (hollow or filled) which opens and closes higher than the previous candlestick’s real body. The third candlestick has a long filled real body and ideally, it should close well into the first candlestick’s real body. The opposite pattern in the Morning Star.
Evening Doji Star
The Evening Doji Star is a three-candlestick pattern signalling a bearish reversal. It is the same as the Evening Star but is considered more bearish. The first candlestick has a hollow real body, the second is a “doji” (a candlestick with no real body or a very small one). The doji is positioned higher than the previous candlestick’s real body. The third candlestick has a long filled real body and ideally, it should close well into the first candlestick’s real body. The opposite pattern in the Morning Doji Star.
Bearish Abandoned Baby
The Bearish Abandoned Baby is a rare pattern indicating reversal of an uptrend. It is similar to the Evening Star and the Evening Doji Star. This pattern comprises a “doji” (a candlestick with no real body or a very small one) sitting between two candlesticks. The entire doji including its shadows is positioned above the candlesticks on either side. The opposite pattern is the Bullish Abandoned Baby.
Shooting Star
The Shooting Star is a bearish pattern indicating a possible trend reversal or resistance level following an uptrend. This signal needs bearish confirmation. This candlestick has a small filled real body and long upper shadow with very little or no lower shadow.
The opposite pattern is the Inverted Hammer.
Bearish Harami
The Bearish Harami is a pattern suggesting that the preceding uptrend has ended. This pattern comprises two candlesticks: a candlestick with a small real body follows one with an unusually large real body. The real body of the second candlestick (and possibly its shadows) is completely contained within the range of the preceding larger real body. Often the second candlestick will have the opposite colour to the first. The opposite pattern in the Bullish Harami. Note: harami means pregnant in Japanese.
Bearish Harami Cross
The Bearish Harami Cross pattern is an important bearish pattern suggesting that the preceding downtrend has ended. This pattern is similar to the Bearish Harami. It comprises two candlesticks: a “doji” (a candlestick with no real body or a very small one) following one with an unusually large white real body. The doji is completely contained within the range of the preceding larger real body. The opposite pattern in the Bullish Harami Cross. Note: harami means pregnant in Japanese.
Bearish Belt Hold
The Bearish Belt Hold is a tall filled candlestick that opens on its high (i.e. there is no upper shadow). This is interpreted as a bearish sign in areas where prices are high. The opposite pattern is the Bullish Belt Hold.
Bearish Counter-attack Line
The Bearish Counter-attack Line can be interpreted as a stalemate between the bulls and bears. The pattern consists of a white candlestick followed by a filled one in an uptrend. Both have the same closing price, i.e. their real bodies start on the same ‘line’. They then extend in opposite directions. The opposite pattern is the Bullish Counter-attack Line.
Bearish Doji
The Bearish Doji pattern appears near the top in a distinct uptrend signalling a possible reversal. This pattern consists of two candlesticks. A long hollow one is followed by a “doji” (a candlestick with no real body or a very small one). The opposite pattern is the Bullish Doji.
Upside Gap Two Crows
The Upside Gap Two Crows is a bearish pattern. It only occurs in an uptrend and signals a reversal. This pattern consists of three candlesticks. The first has a long white real body. This is followed by a filled candlestick which ‘gaps up’ i.e. it opens and closes higher than the previous candlestick’s high, and never falls below that high. The third candlestick is also filled and opens above and closes under the second candlestick’s real body, i.e. it engulfs the second. It too is above the white candlestick.
Three Black Crows
The Three Black Crows pattern is a bearish pattern indicating a top reversal at a high price level. The pattern comprises three consecutive filled candlesticks with relatively long real bodies that close on or near their lows, i.e. they have short or no lower shadows.