List of Candlestick Patterns

Reversal Patterns

Bullish Reversal
Patterns

(1) Strong
Bullish
Reversal
Patterns

(2)
Moderate
Bullish
Reversal
Patterns

Continuation Patterns

Bearish Reversal
Patterns

(3) Weak
Bullish
Reversal
Patterns

(1)
Strong
Bearish
Reversal
Patterns

Bullish
Continuation Patterns

(2)
Moderate
Bearish
Reversal
Patterns

(3)
Weak
Bearish
Reversal
Patterns

1. Rising Three Methods

2. Three Line Strike

1. Abandoned Baby

1.

Breakaway

1.

Belthold

1.

Abandoned Baby

1.

Advance Block

1.

Belt Hold

2. Morning Doji Star

2.

Doji Star

2.

Gravestone Doji

2.

Dark Cloud Cover

2.

Breakaway
Candlestick

2.

Harami

3. Three Inside Up

3.

3.

Evening Doji Star

3.

Shooting Star

3.

Deliberation

Dragonfly
Doji

4.

Evening Star

4.

Engulfing

4.

Downside Tasuki

5.

Hammer

5.

Dragonfly Doji

Bearish
Continuation Patterns

1.
2.
3.
4.
5.
6.
7.

Falling Three Methods

Downside Tasuki
Three Line Strike
Side by Side White
Lines
In Neck
On Neck
8. Thrusting

Bullish Reversal Patterns

(1) Strong Bullish Reversal Patterns:
1. Abandoned Baby
2. Morning Doji Star
3. Three Inside Up
4. Three Outside Up
5. Three White Soldiers

(2) Moderate Bullish Reversal Patterns:

1. Breakaway
2. Doji Star
3. Dragonfly Doji
4. Engulfing
5. Hammer

6. Ladder Bottom
7. Morning Star
8. Piercing Line
9. Three Stars in the South
10. Tristar.

(3) Weak Bullish Reversal Patterns

1. Belthold
2. Gravestone Doji
3. Inverted Hammer
4. Tweezers Bottom

Bearish Reversal Patterns

(1) Strong Bearish Reversal Patterns:
1. Abandoned Baby
2. Dark Cloud Cover
3. Evening Doji Star
4. Evening Star
5. Three Inside Down
6. Three Outside Down

(2) Moderate Bearish Reversal Pattern

1. Advance Block
2. Breakaway Candlestick
3. Deliberation
4. Downside Tasuki
5. Dragonfly Doji
6. Engulfing
7. Meeting Lines
8. Tri Stars
9. Gravestone Doji
10. Hanging Man

(3) Weak Bearish Reversal Patterns

1. Belt Hold
2. Harami
3. Shooting Star
4. Harami Cross
5. Tweezers Top

Continuation Patterns

(1) Bearish Continuation Patterns:

Falling Three Methods
Downside Tasuki
Three Line Strike
Side by Side White Lines
In Neck
On Neck
Thrusting
(2) Bullish Continuation Patterns:
Rising Three Methods
Three Line Strike

Candlestick Stock Analysis Patterns

In our earlier article we talked about introduction to candlestick stock analysis. Now, we will go a bit deeper and understand the basic candlestick patterns which can be seen in
these types of charts used in stock analysis for beginners. Below are the simple types of candlesticks which are being used in this kind of analysis:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

White candlestick White candlesticks or hollow candlesticks signal uptrend movement. These occur in different lengths; the longer the body, the more significant the
price increase.
Black candlestick Black candlesticks or filled candlesticks signal downtrend movement. These occur in different lengths; the longer the body, the more significant the
price decrease.
Long lower shadow Long lower shadow gives a bullish signal. The lower wick must be at least the bodys size; the longer the lower wick, the more reliable the
signal.
Long upper shadow Long upper shadow gives a bearish signal. The upper wick must be at least the bodys size; the longer the upper wick, the more reliable the
signal.
Hammer A hammer shows a bullish pattern during a downtrend. The hammer has long lower wick and small or no body. Shaven head hammer shows a bullish
pattern during a downtrend & a bearish pattern during an uptrend since it has no upper wick. The Hanging man hammer candlestick shows bearish pattern during an
uptrend. It has long lower wick, small or no body; wick has the multiple length of the body.
Inverted hammer Inverted hammer signals bottom reversal; however confirmation must be obtained from next trade. It may be either a white or black body. Shaven
bottom inverted hammer signals bottom reversal, however confirmation must be obtained from next trade. It has no lower wick. Shooting star inverted hammer shows a
bearish pattern during an uptrend. It has small body, long upper wick, small or no lower wick.
Spinning top white Spinning top white gives a neutral pattern. It gives a normal view until seen with respect to the other candlestick patterns
Spinning top black Similar to spinning top white pattern and gives neutral pattern but in black candlestick. Again becomes meaningful when sees in combination with
other candlestick patterns
Doji Doji is a neutral pattern with no body and only shadows, meaningful in combination with other candlestick patterns
Long legged doji This is a type of DOJI but have long shadows. It signals a top reversal
Dragonfly doji As in a normal Doji, there is no body and a Dragonfly Doji signals trend reversal since it has no upper wick and long lower wick.
Gravestone doji Opposite to Dragonfly doji and signals trend reversal. It has no lower wick and long upper wick
Marubozu white Marubozu denotes dominant bullish trades and continued bullish trend. It has no upper or no lower wick.

14.

Marubozu black Marubozu black denotes dominant bearish trades and continued bearish trend. It has no upper or no lower wick.

Candlestick Charting I: Basic Patterns

Learn the 11 Basic Candlestick Patterns, and which ones produce highly reliable, tradable indicators. You'll also learn a few Japanese
words along the way!
I absolutely love candlestick charting. Why? The main reasons why candlesticks outperform any other types of charts are because
you are able to, 1) visually depict stock data easily, 2) establish strong price relationships and 3) catch possible reversals quickly.
The third one has saved me many, many times. Lets take a look at a basic candle, which make up all candlestick charts, and make
sure we know where the open, high, low, and close are located:

A green or white candle signifies a positive (up) day and a red or black candle signifies a negative (down) day. For this article, I will
use green candles for positive days and red candles for negative days. Let this sink in before continuing. The third pattern to
the far right is called a doji, which signals indecision, and one of the many basic patterns you will be learning today.
There are 11 categories of basic and major candlestick patterns. These are the most common patterns youll be seeing as you
practice going through your charts. I will give a description, a real-life example, and indicate reliability levels for each pattern:
extremely high, high, medium, low, extremely low. Here are the categories:

Doji
Doji are days where the open and close are identical or nearly identical. The candle will look like a cross as a result. This is the
primary signal for indecision and a potential reversal may be underway. Whats important to note is that doji in the middle of a
trend mark continuations of that trend, while doji located at the bottom of a trend obviously mark reversals. Whenever you see a
doji, pay special attention to its location within a chart.

There are three types of doji: gravestone, dragonfly, and long-legged. A gravestone doji simply means that a stock opened at the
low of the day, reached a high, but fell back down to close at/near its open at the low of the day. The dragonfly doji is the opposite
where a stock opened at the high of the day, reached a low, but bounced back up to close at/near its high of the day. A long-legged
doji signals extreme indecision and volatility. Every doji has the potential to signal a sharp and sudden move.

Engulfing
Engulfing patterns, both bullish and bearish, are reversal patterns that may signal the end of a trend. Bullish engulfing patterns
have the potential to end a downtrend and bearish engulfing patterns have the potential to end an up trend. Both patterns are
highly reliable in signaling reversals.

Bullish engulfing patterns are formed when a green candle gaps down (opens lower) and closes much higher than the open of the
previous days red candle. If you look at the pattern, you can see how the green candle completely engulfs the red candle. This
shows that there was intense buying pressure sometime during the day to negate the selling pressure at the open.
Bearish engulfing patterns are just the opposite and they are formed when a red candle gaps up (opens higher) and closes much
lower than the open of the previous days green candle. This shows an immediate sentiment change during the day and cancelled
out the previous days gains.

Harami
Harami means pregnant in Japanese and the term is derived by observing a small candle within a larger candle. The long
candle is the mom and the small candle is the baby. The second or smaller candles open and close must both be located
within the open-close range of the first or long candle. This pattern is also known as an inside day. A harami can signal a
slowdown in the current trend and a possible reversal. However, the reliability of the pattern is low and I recommend that you wait
for the next day to confirm a reversal.

Kicker
Kickers are perhaps the most important and powerful reversal signals in candlestick charting. They represent the most dramatic
and sudden shift in sentiment. Kicker candles are most commonly compared to breakaway gaps. The longer the candle, the more
powerful the price reversal. These signals have the ability to completely end a trend and start a new one, all in a single day. This is
why they are so powerful and of course, their reliability is extremely high.
A bullish kicker is formed when the first candle is red and the second candle is green but the open and close of the green candle
exceeds the open-close range of the previous days red candle. This is because the gap up is forceful to the upside. The bearish
kicker is just the opposite where a red candle gaps down so hard, that the open-close range are well below the open-close range of
the previous days green candle.

Dark Cloud Cover

The dark cloud cover is a bearish reversal signal. It consists of a green and red candle and the red candle must gap up (open
higher) above the green candle. What happens is that the bar turns into a red candle and must close at least 50% below the midpoint of the green candle. The dark cloud covers reliability is medium.

Piercing
The piercing pattern is the opposite of the dark cloud cover and it is a bullish reversal pattern. This pattern also consists of a green
and red candle but the green candle must gap down (open lower) below the red candle. This green candle must close at least 50%
above the mid-point of the red candle. The piercing patterns reliability is medium.

Shooting Star
The shooting star is a bearish reversal pattern. It consists of a green candle and during the day it was a long candle, but for some
reason, there was a sell-off that shaved down the long candle by at least 2/3rds (this is flexible and can be less). This means that
the candle opened up, reached a high, but closed near its open. The candle is still above the previous days candle. The shooting
star is an extremely reliable pattern to determine high-probability tops.

Hammer & Hanging Man

Both patterns are reversal patterns. The Hammer occurs at the bottom of a downtrend and a hanging man occurs at the top of an
up trend. What happens is that these candles open, sell off during the day but somehow manage to rally back close to their open.
The shadow has to be at least 2/3rds larger than the body of the candle. The term hanging man is exactly what it isa man
hanging. Both patterns have high reliability.

Morning Star

The morning star is a bullish reversal pattern at the end of a downtrend. This is a three candle formation with the first candle being
red, the second neutral, and the third, green. The second candle can be anything, but in most cases, it is a doji. What happens here
is that the downtrend is exhausted and there is a lack of sellers pressuring the stock down. The second day, being an indecisive
day, becomes middle ground. If the bulls win the next day, the green candle completes the morning star pattern. The third candle
must close at least 50% above the mid-point of the red candle.
The morning star, and its counterpart, the evening star, are two of the most highly reliable reversal patterns in candlestick
charting. From my own experience, the failure rates are extremely low and the morning star and evening star are two of my most
sought-after patterns.

Evening Star
The evening star is the complete opposite of the morning star and it is a bearish reversal pattern. At the end of an up trend, the
stock exhausts itself and may form a doji top, signaling a stalemate between the bulls and bears. This is an indication that the
majority of traders have bought the stock if there is no price progress made. The third candle, a red one, indicates panic-driven
selling as a result of a lack of buyers. The downtrend usually continues for quite some time. Opposite of the morning star, the third
red candle must close at least 50% below the mid-point of the green candle.

So now you know the basic and common candlestick patterns that occur. Youll be ready for the several dozen advanced candlestick
patterns that will complete your understanding of the major continuation, reversal, secondary and tertiary signals. I wont throw
everything at you all at once, but they will be divided into separate articles and they will be spaced out. I first want you to learn and
get acclimated to these 11 patterns before we move on. The best way to do this is to set aside some time for your trading
education and look at several charts and identify some patterns. If you need help, you can always leave me a message on my Wall.