This document defines several candlestick patterns and their properties for signaling potential reversals in the market trend. The bullish engulfing and bearish engulfing patterns indicate bullish and bearish reversals respectively when the second candle fully engulfs the first. Tweezers top and bottom signal reversals when the first and second candles have the same high or low. Dark cloud cover, piercing pattern, and harami patterns also indicate reversals under certain conditions regarding trends and the size and color of candle bodies and shadows.
This document defines several candlestick patterns and their properties for signaling potential reversals in the market trend. The bullish engulfing and bearish engulfing patterns indicate bullish and bearish reversals respectively when the second candle fully engulfs the first. Tweezers top and bottom signal reversals when the first and second candles have the same high or low. Dark cloud cover, piercing pattern, and harami patterns also indicate reversals under certain conditions regarding trends and the size and color of candle bodies and shadows.
This document defines several candlestick patterns and their properties for signaling potential reversals in the market trend. The bullish engulfing and bearish engulfing patterns indicate bullish and bearish reversals respectively when the second candle fully engulfs the first. Tweezers top and bottom signal reversals when the first and second candles have the same high or low. Dark cloud cover, piercing pattern, and harami patterns also indicate reversals under certain conditions regarding trends and the size and color of candle bodies and shadows.
Name and Candlestick configuration Properties and conditions
Bullish Engulfing Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend 3. The first candle must be red 4. The second candle must be green 5. The real body of the second candle surrounds the real body of the first 6. The position of the shadows, on either candles, doesn't matter
Bearish Engulfing Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend 3. The first candle must be green 4. The second candle must be red 5. The real body of the second candle surrounds the real body of the first 6. The position of the shadows, on either candles, doesn't matter
Tweezers Top Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend 3. The first and the second candle have the same high Tweezers Bottom Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend 3. The first and the second candle have the same low
Dark Cloud Cover Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend 3. The first candle must be green 4. The second candle must be red 5. The market gaps higher on the open of the second candle 6. The real body of the second candle must close into the body of the first candle
Piercing Pattern Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend 3. The first candle must be red 4. The second candle must be green 5. The market gaps lower on the open of the second candle 6. The real body of the second candle must close into the body of the first candle Bullish Harami Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend 3. The first candle must be red 4. There's a gap high between the two candles 5. The second candle has a very small real body, the color is not important
Bearish Harami Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend 3. The first candle must be green 4. There's a gap low between the two candles 5. The second candle has a very small real body, the color is not important