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Abandoned Baby

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:
First day is usually a long black day Second day is a doji that gaps in the direction of the previous trend The third day is a white day, gapping in the opposite direction, with no overlapping shadows.

What it Means:
In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal is given by the white third day, and is well defined by the upward gap.

Belt Hold

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:
A white body occurs in a downtrend with no lower shadow.

What it Means:
In a downtrend, a white body occurs with an open that is also the low for the day. This may signify a rally for the bulls.

Breakaway

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day
  • The second day is a black day that gaps below the first day
  • The third and fourth days continue to in the direction of the second with lower consecutive closes
  • The fifth day is a long white day that closes into the gap between the first and second days

What it Means:
A downtrend sees prices bottoming out and leveling off. The result is a long white day which does not close the gap into the body of the first day. This suggests a short term reversal.

Concealing Baby Swallow

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • The first two days are Black Marubozu days
  • The third day is black day that gaps downward, but trades into the body of the second day
  • The fourth day is a Black Marubozu day that engulfs the third day

What it Means:
In a strong downtrend, highlighted by two consecutive Black Marubozu days, a gapping black day trades into the body of the previous day. The last day, another Black Marubozu, shows investors selling off, as it closes at a new low. This provides an opening for the shorts to cover their positions. A bullish reversal should ensue.

Doji Star

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • First day is a long black day
  • Second day is a doji that gaps in the direction of the previous trend
  • The shadows of the doji should not be long

What it Means:
In a downtrend, the market bolsters the bears with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal would be a higher open on the next trading day.

Dragonfly Doji

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW / MODERATE

How to Recognize signal:

  • Small real body at the upper end of the trading range
  • lower shadow at least twice as long as the real body
  • No (or almost no) upper shadow

What it Means:
There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (the close is higher than the open price). Since the certainty for a Hammer indicator is low, the trend reversal can be confirmed by a higher open and an even higher close on the next trading day. If the open and the close are identical, the indicator is considered as Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hammer.

Breakawayngulfing

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • A long black day occurs
  • The second day is a white that completely engulfs the real body of the first day

What it Means:
Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day's open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.

GraveStone Doji

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW / MODERATE

How to Recognize signal:

  • Small real body at the lower end of the trading range
  • Upper shadow usually no more than twice as long as the real body
  • No (or almost no) lower shadow

What it Means:
As the market opens below the close of the previous day, the bulls rally briefly, but not enough to close above the previous day's close. As this leaves shorts in a losing position, the Inverted Hammer presents the potential for an upcoming rally. Confirmation of the trend reversal would by an opening above the body of the Inverted Hammer on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than an Inverted Hammer.

Hammer

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW / MODERATE

How to Recognize signal:

  • Small real body at the upper end of the trading range
  • lower shadow at least twice as long as the real body
  • No (or almost no) upper shadow

What it Means:
There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (the close is higher than the open price). Since the certainty for a Hammer indicator is low, the trend reversal can be confirmed by a higher open and an even higher close on the next trading day. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hammer.

Harami

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:

  • A long black day occurs
  • The second day is a white day where the real body is completely engulfed by the real body of the first

What it Means:
After a long black day at the low end of a downtrend, a white candlestick opens higher than the previous day's close. The price is driven up, as many shorts are covered, which encourages further buy-ins. The Harami indicator should be confirmed with the next trading day's candlestick following the reversal trend. The Harami pattern is also the first two days of the Three Inside patterns.

Harami Cross

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:

  • A long black day occurs
  • The second day is a doji within the real body of the previous day

What it Means:
After a long black day at the low end of a downtrend, the market opens higher than the previous day's close and closes at the open. The Harami Cross indicator is more definite than the basic Harami indcator, and signifies a reversal for the bulls.

Homing Pigeion

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day
  • The second day is a smaller black day that is within the body of the first day

What it Means:
In a downtrend, the bears continue to have their way. However, the second day opening and closing within the body of the first day suggests an erosion of the downtrend. Ensuing sell-offs, followed by buy-ins could result in a bullish reversal.

Inverted Hammer

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW / MODERATE

How to Recognize signal:

  • Small real body at the lower end of the trading range
  • Upper shadow usually no more than twice as long as the real body
  • No (or almost no) lower shadow

What it Means:
As the market opens below the close of the previous day, the bulls rally briefly, but not enough to close above the previous day's close. As this leaves shorts in a losing position, the Inverted Hammer presents the potential for an upcoming rally. Confirmation of the trend reversal would by an opening above the body of the Inverted Hammer on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than an Inverted Hammer.

Kicking

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • The first day is a Black Marubuzo day
  • The second day is a White Marubuzo day that gaps upward

What it Means:
This pattern is a strong sign that the market is headed upward. With this indicator, the previous market direction is not as important as with other indicators.

Ladder Bottom

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • Three black days occur with consecutively lower opens and closes
  • The fourth day is black with some upper shadow
  • The fifth day is a white day that opens above the body of the fourth day

What it Means:
In a considerable downtrend, the shorts may have a chance to sell and take in any profits by the fourth day. This results in a gap upward on the fifth day. If the body of the fifth day is long, or the volume of trading is high, a bullish reversal has likely occurred.

Mat Hold

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • The first day is a long white day
  • The second day gaps up and is a black day
  • The second, third, and fourth days have small real bodies and follow a brief downtrend pattern, but stay within the range of the first day
  • The fifth day is a long white day that closes above the close of the first day

What it Means:
The Mat Hold pattern is similar to the Rising Three Methods pattern. In an uptrend, a long white day occurs, following by three days of small real bodies that fall into a short downtrend. On the fifth day, the bulls come in strong to close at a new high. It appears that attempts to reverse the trend occurred, but failed. The upward trend should continue.

Matching low

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day
  • The second day is a black day with a close equivalent to the first day's close

What it Means:
In a downtrend two black days occur with equal closes. This suggests short-term support, and can cause a reversal on the next day of trading.

Meeting Lines

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day, and has a body that is lower than the previous trend
  • The second day is a long white day, and has a body that is also lower than the previous trend
  • Both days have identical closes

What it Means:
In a downtrend two days open below the previous trend. Even though the second day open low, it rallies to close at the close of the previous day. This typically means a benchmark has be defined by traders, and a reversal is likely.

Morning Doji Star

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • First day is a long black day
  • Second day is a doji that gaps in the direction of the previous trend
  • The third day is a white day

What it Means:
In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal is given by the white third day. The Morning Doji Star is a fully realized bullish Doji Star pattern.

Morning Star

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • First day is a long black day
  • Second day is a small day that gaps in the direction of the previous trend
  • The third day is a white day

What it Means:
In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal is given by the white third day.

Piercing Line

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • First day is a long black day
  • Second day is a white day with an open below previous days low
  • Second days close is within but above the midpoint of the first days body

What it Means:
In a downtrend the market gaps open, but rallies strong to close above the previous days midpoint. This pattern suggests an opportunity for the bulls to enter the market and support the trend reversal. The Piercing Line pattern is the opposite of the Dark Cloud Cover.

Rising Three Methods

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • The first day is a long white day
  • The second, third, and fourth days have small real bodies and follow a brief downtrend pattern, but stay within the range of the first day
  • The fifth day is a long white day that closes above the close of the first day

What it Means:
In an uptrend, a long white day occurs, following by three days of small real bodies that fall into a short downtrend. On the fifth day, the bulls come in strong to close at a new high. This small downtrend, in between two long white days, is consistent with investors taking a break. The upward trend should continue.

Separating Lines

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:

  • The first day is a black day
  • The second day is a white day that has the same opening price as the first day

What it Means:
In an uptrend a long black day occurs. The second day, however, picks up where the previous day's trading left off and rallies to close higher. This suggests that the uptrend should remain intact.

Side By Side White Lines

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:

  • The first day is a white day
  • The second day is a white day that gaps up
  • The third day is a white day of about the same body length and close as the second day

What it Means:
In an uptrend three white days occur with an upward gap between the first two and a similar body length and close for the last two. This suggests a definite building of the uptrend.

Stick Sandwich

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a black day
  • The second day is a white day that trades above the close of the first day
  • The third day is a black day with a close equivalent to the first day

What it Means:
This pattern shows three days consecutive higher opens, but results in an eventual close equal to the first day's close. This pattern is indicative of the market finding a support price. The overall trend has the potential to reverse, building on the new support price.

Three Inside Up

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • A bullish Harami pattern occurs in the first two days
  • The third day is a white day with a higher close than the second day

What it Means:
This pattern is a more reliable addition to the standard Harami pattern. The third day is confirmation of the bullish trend reversal.

Three Line Strike

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : LOW

How to Recognize signal:

  • Three long white days occur with consecutively higher closes
  • The fourth day opens higher and closes below the open of the first day

What it Means:
The black day drives prices back to where they were at the start of the pattern. If the bullish trend was strong before the pattern, then it should continue.

Three Outside Up

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • A bullish Engulfing pattern occurs in the first two days
  • The third day is a white day with a higher close than the second day

What it Means:
This pattern is a more reliable addition to the standard Engulfing pattern. The third day is confirmation of the bullish trend reversal.

Three Stars in The South

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day with a long lower shadow
  • The second day is a black day similar to the first, but smaller, with a low above the first days low
  • The third day is a small Black Marubozu that lies within the second days trading range

What it Means:
In a downtrend three black days occur. However each day is consecutively weaker within the trend, suggesting that some buying is occurring. Small rallies on each day keep the market's lows from reaching that of the first day. All indications are that the tide is slowly turning toward the bulls.

Three White Soldiers

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : HIGH

How to Recognize signal:

  • Three long white days occur, each with a higher close than the previous day
  • Each day opens within the body of the previous day and closes near the high of the day

What it Means:
In a downtrend three long white days occur with consecutively higher closes. Generally this suggests future market fortitude, as a reversal is in progress that is building on moderate upward steps.

Tri Star

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • A doji occurs on three consecutive trading days
  • The second doji gaps below the first and third

What it Means:
In an long downtrend, the market shows signs of a rally as the real bodies have grown progressively smaller. The trend culminates with the bullish Tri Star, identifying that many bearish positions may be reversing.

Unique Three River Bottom

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first day is a long black day
  • The second is a black Harami day, with a shadow that sets a new low
  • The third day is a short white day which closes below the close of the second day

What it Means:
Two black days occur consecutively, with the second day's body within that of the first day. However, the long lower shadow shows the bearish tide may be reversing. The third day opens lower, reinforcing the indecision of the market and ends in a rally. The bulls should take over.

Upside Gap Three Methods

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • Two long white days occur with a gap between them
  • The third day is a black day that fills the gap between the first two days

What it Means:
An uptrend is followed by two long white days with a gap upward between them. The third day is a black day, but one that closes the gap between the first two. This should be seen as support for the upward trend, and may be caused by temporary profit taking.

Upside Tasuki Gap

PATTERN : REVERSAL
TREND : BULLISH
RELIABILITY : MODERATE

How to Recognize signal:

  • The first two days are white days with an opening gap
  • The third day is a black day that opens within the body of the second day and closes within the gap of the first two days

What it Means:
In an uptrend a white day occurs, followed by another white day that gaps up. A black day ensues, and is likely the result of temporary profit taking. The trend should continue to follow the direction of the upward gap.

Abandoned Baby

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • First day is usually a long white day
  • Second day is a doji that gaps in the direction of the previous trend
  • The third day is a black day, gapping in the opposite direction, with no overlapping shadows

What it Means:
In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day, which is given extra validation by the downward gap.

Advance Block

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • Three long white days occur, each with a higher close than the previous day
  • Each day opens within the body of the previous day and closes near the high of the day
  • Each days body is significantly smaller than the previous days body
  • The second and third days should exhibit long upper shadows

What it Means:
In an uptrend three long days occur with consecutively higher closes. This pattern is similar to the Three White Soldiers pattern, however, in this case, each successive day is weaker than the one preceding it. This suggests that the previous rally is losing strength, and preparing for a reversal.

Belt Hold

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW

How to Identify it:

  • A black body occurs in an uptrend with no upper shadow

What it Means:
In an uptrend, a black body occurs with an open that is also the high for the day. This may cause many positions to be sold, perpetuating a bearish reversal.

Breakaway

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a long white day
  • The second day is a white day that gaps above the first day
  • The third and fourth days continue to in the direction of the second with higher consecutive closes
  • The fifth day is a long black day that closes into the gap between the first and second days

What it Means:
An uptrend sees a bullish surge that eventually weakens. The result is a long black day that does not close the gap into the body of the first day. This suggests a short-term reversal.

Dark Cloud Cover

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • First day is a long white day
  • Second day is black with an open above the high of the previous day
  • Second day closes within but below the midpoint of the first day's body

What it Means:
In an uptrend the market gaps open, but loses ground to fall below the midpoint of the previous day. The Dark Cloud Cover pattern suggests an opportunity for the shorts to capitalize on the next day's open: a warning sign to bullish investors. The Dark Cloud Cover pattern is the opposite of the Piercing line pattern.

Deliberation

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • Two long white days occur, the second with a higher close than the first
  • A third white day is a spinning top or doji that gaps above the second day

What it Means:
In an uptrend three white days occur with consecutively higher closes. This pattern is a derivative of the Three White Soldiers pattern and is very similar to the Advance Block pattern. Even though an uptrend continues, the small third body suggests that the previous rally is losing strength and preparing for a reversal.

Downside Gap Three Methods

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • Two long black days occur with a gap between them
  • The third day is a white day that fills the gap between the first two days

What it Means:
A downtrend is followed by two long black days with a gap downward between them. The third day is a white day, but one that closes the gap between the first two. This should be seen as support for the downward trend.

Downside Tasuki Gap

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first two days are black days with an opening gap
  • The third day is a white day that opens within the body of the second day and closes within the gap of the first two days

What it Means:
In a downtrend a black day occurs, followed by another black day that gaps down. A white day ensues, and is likely the result of investors temporarily taking advantage of the low buying price. The trend should continue to follow the direction of the downward gap.

Doji Star

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • First day is a long white day
  • Second day is a doji that gaps in the direction of the previous trend
  • The shadows of the doji should not be long

What it Means:
In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows erosion of confidence in the current trend. Confirmation of a trend reversal would be a lower open on the next trading day.

Dragonfly Doji

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW / MODERATE

How to Identify it:

  • Small real body at the upper end of the trading range
  • lower shadow at least twice as long as the real body
  • No (or almost no) upper shadow

What it Means:
There is a sharp sell off after the market opens during an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hanging Man.

Engulfing

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • A long white day occurs
  • The second day is a black day that completely engulfs the real body of the first day

What it Means:
Occurring in an uptrend, the Engulfing depicts an opening at a new high, followed by a high volume sell-off that closes at or below the previous day's open. This signifies that the uptrend has been hurt and the bears may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.

Evening Doji Star

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • First day is a long white day
  • Second day is a doji that gaps in the direction of the previous trend
  • The third day is a black day

What it Means:
In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day. The Evening Doji Star indicator is the fully realized bearish Doji Star pattern.

Evening Star

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • First day is a long white day
  • Second day is a small day that gaps in the direction of the previous trend
  • The third day is a black day

What it Means:
In an uptrend, the market builds strength on a long white day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the black third day.

Falling Three Methods

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • The first day is a long black day
  • The second, third, and fourth days have small real bodies and follow a brief uptrend pattern, but stay within the range of the first day
  • The fifth day is a long black day that closes below the close of the first day

What it Means:
In a downtrend, a long black day occurs, following by three days of small real bodies that fall into a short uptrend. On the fifth day, the bears come in strong to close at a new low. This small uptrend, in between two long black days, is consistent with investors taking a break. The downward should continue.

Gravestone Doji

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW / MODERATE

How to Identify it:

  • Small real body at the lower end of the trading range
  • Prices gap open
  • Upper shadow usually at least three times as long as the real body
  • No (or almost no) lower shadow

What it Means:
The market gaps open above the previous day's close in an uptrend. It rallies to a new high then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would by an opening below the body of the Shooting Star on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than a Shooting Star.

Hanging Man

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW / MODERATE

How to Identify it:

  • Small real body at the upper end of the trading range
  • lower shadow at least twice as long as the real body
  • No (or almost no) upper shadow

What it Means:
There is a sharp sell off after the market opens during an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hanging Man.

Harami

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW

How to Identify it:

  • A long white day occurs
  • The second day is a black day that is completely engulfed by the real body of the first day

What it Means:
After a long white day at the high end of an uptrend, a black candlestick opens lower than the previous day's close. Trading is typically light and the day ends with a close lower than the open and within body of the first day; a signal that the current uptrend is losing strength. The Harami indicator should be confirmed with the next trading day's candlestick following the reversal trend. The Harami pattern is also the first two days of the Three Inside patterns.

Harami Cross

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • A long white day occurs
  • The second day is a doji that is within the range of the previous day's real body

What it Means:
After a long white day at the high end of an uptrend, the market opens lower than the previous day's close. Trading is typically light and the day ends with a close at the same price as the open and within body of the first day; an even stronger signal than the basic Harami pattern that the current uptrend is losing strength.

Identical Three Crows

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • Three black days occur, each with a close below the previous day
  • Each day opens at the close of the previous day

What it Means:
In an uptrend three long black days occur that open at the previous day's close. This pattern is similar to the Three Black Crows pattern but typifies a more severe loss of buying power. A bearish trend is almost certain.

In Neck

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a long black day
  • The second is a white day that opens below the low of the previous day and closes barely above or equal to the close of the previous day

What it Means:
The In Neck pattern is a less severe relative of the On Neck pattern. A small rally is built by the second day, but ends near the close of the previous black day. Although, as in the case of the On Neck pattern, the downtrend should prevail, it may take longer to evolve.

Kicking

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • The first day is a White Marubuzo day
  • The second day is a Black Marubuzo day that gaps downward

What it Means:
This pattern is a strong sign that the market is headed downward. With this indicator, the previous market direction is not as important as with other indicators.

Meeting Lines

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a long white day, and has a body that is above the previous trend
  • The second day is a long black day, and has a body that is also above the previous trend.
  • Both days have identical closes

What it Means:
In an uptrend two days open above the previous trend. Even though the second day opens high, it rallies to close at the close of the previous day. This typically means a benchmark has be defined by traders, and a reversal is likely. The bearish Meeting Lines pattern is similar to, but less reliable than the Dark Cloud Cover pattern.

On Neck

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a long black day
  • The second is a white day (not long) that opens below the low of the previous day and closes at the low of the previous day

What it Means:
The On Neck pattern is typical in a downtrend. The fact that a small rally is built by the second day, but ends at the low of the previous black day indicates that the bears should prevail.

Separating Lines

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW

How to Identify it:

  • The first day is a white day
  • The second day is a black day that has the same opening price as the first day

What it Means:
In downtrend a long white day occurs. The second day, however, picks up where the previous day's trading left off and rallies to close lower. This suggests that the downtrend should remain intact.

Shooting Star

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : LOW / MODERATE

How to Identify it:

  • Small real body at the upper end of the trading range
  • Upper shadow usually at least three times as long as the real body
  • Prices gap open
  • No (or almost no) lower shadow

What it Means:
The market gaps open above the previous day's close in an uptrend. It rallies to a new high then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would by an opening below the body of the Shooting Star on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than a Shooting Star.

Side By Side White Lines

PATTERN : CONTINUATION
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a black day
  • The second day is a white day that gaps down
  • The third day is a white day of about the same body length and close as the second day

What it Means:
In a downtrend a black day is followed by two white that are gapped below the first day. This typically means the shorts are covering their positions, and no reversal is about to occur. The downtrend should remain intact for the near future.

Three Black Crows

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • Three black days occur, each with a close below the previous day
  • Each day opens within the body of the previous day
  • Each day closes near or at its lows

What it Means:
In an uptrend three long black days occur with consecutively lower closes. This pattern suggests that the market has been at a high price for too long, and investors are beginning to compensate for it.

Three Inside Down

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • Three black days occur, each with a close below the previous day
  • Each day opens within the body of the previous day
  • Each day closes near or at its lows

What it Means:
In an uptrend three long black days occur with consecutively lower closes. This pattern suggests that the market has been at a high price for too long, and investors are beginning to compensate for it.

TThree Inside Down

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • A bearish Harami pattern occurs in the first two days
  • The third day is a black day with a lower close than the second day

What it Means:
This pattern is a more reliable addition to the standard Harami pattern. The third day is confirmation of the bearish trend reversal.

Three Line Strike

PATTERN : CONTINUATION
TREND : BEARISH
RELIABILITY : LOW

How to Identify it:

  • Three long black days occur with consecutively lower closes
  • The fourth day opens lower, but closes above the open of the first day

What it Means:
The white day drives prices back to where they were at the start of the pattern. If the bearish trend was strong before the pattern, then it should continue.

Three Outside Down

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • A bearish Engulfing pattern occurs in the first two days
  • The third day is a black day with a lower close than the second day

What it Means:
This pattern is a more reliable addition to the standard Engulfing pattern. The third day is confirmation of the bearish trend reversal.

Thrusting

PATTERN : CONTINUATION
TREND : BEARISH
RELIABILITY : LOW

How to Identify it:

  • The first day is a long black day
  • The second is a white day that opens below the low of the previous day and closes into the body of the previous day, but below the midpoint

What it Means:
The Thrusting pattern is a weaker relative of the On Neck and In Neck continuation patterns. A rally is built by the second day, and closes well into the body of the previous black day. However, since the second day's close doesn't even reach the midpoint of the first day's body, the bulls will likely be discouraged and the downtrend will continue.

Tri Star

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • A doji occurs on three consecutive trading days
  • The second doji gaps above the first and third

What it Means:
In an long uptrend, the market shows signs of weakness as the real bodies have grown progressively smaller. The trend culminates with the Tri Star, identifying that there is little strength left, and signaling a return of the bears.

Two Crows

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : MODERATE

How to Identify it:

  • The first day is a long white day
  • The second day is a black day that gaps above the first day
  • The third day is a black day that opens within the body of the second day and closes within the body of the first day

What it Means:
In an uptrend the market closes lower after an opening gap upwards. This is followed by another black day which fills the gap. The Two Crows pattern suggests the erosion of the uptrend, and foreshadows a trend reversal.

Upside Gap Two Crows

PATTERN : REVERSAL
TREND : BEARISH
RELIABILITY : HIGH

How to Identify it:

  • The first day is a long white day continuing in an uptrend
  • The second day is black and gaps up
  • The third day is also black and engulfs the previous black day, but still closes above the first day

What it Means:
In an uptrend the market falters, but still closes above the previous day's close. The next day, it falters more but remains above the first day's close. This is a signal that the market can no longer hold its position and is in for a bearish ride.