combined candles

Doji

Dragonfly Doji

Gravestone Doji

Spinning Tops

Shooting Star

Hanging Man

Northern Doji

Southern Doji

Hammer

Basic single candle formations

Top reversal sign. Long upper shadow, with small real body at or near lows of session. Bearish reversal, so must appear during a rally. Shooting Star bodies can either be Black or White. “Shooting star tells you the market is perhaps becoming overbought. Finally theBulls refuse to pay more, and cannot sustain prices near the highs of the session. Bearscome in and force the price downwards.

Also see ”Pin bars”, “Hammer”, and “Gravestone Doji”.

Bottom reversal pattern. Long lower shadow, with small real body at the highs of thesession. Bullish reversal, so must appear during a decline. Body can be either Black orWhite. Confirmation of next close is above the close of the Hammer bar.

Body can be Black or White. Prices are continuing in the direction of the trend;opposing Bears (Bulls) pushed prices lower but Bulls (Bears) met new supply withdemand to close prices higher still. Weak signals overall, consider only in thepresence of additional confirmatory signals.

Reflect in the Horizontal for similar setup.

Small real bodies, either black or white. Bulls and bears are to-ing and fro-ing betweenthemselves. Long real bodies are being prevented from forming, with little range in priceto form doji or Pin bars. High Wave candles are spinning tops with particularly long upperand lower shadows. Translates into indecision.

Market is at a juncture; there is indecision in the market. Buls and Bears are equal incompetition.

Preceeding rally may be losing steam. Look to next candle patterns for confirmation.

Normally Doji’s in a downtred are not too too important. Look to other techniques forconfluence.

Important candle if found in a downtrend. Knows as “Pin Bars”. Price moved downwardsfrom the open, where bulls stepped in and forced price back up. Strong Reversal signal.See “Hammer” pattern.

Important if found in an uptrend, a strong bearish reversal signal. Prices above the openwere rejected by the Bears, see “Shooting Star” and “Pin Bars”.

Strong Weak

Strong Weak

Support

Bullish Belt Hold

Resistance

Bearish Belt Hold

Simple Two candle formations

Basic single candle formations cont.

Lower Open

Close > 1/2 wayup into prev. Bar

1/2

Bullish Piercing Pattern

Open higher thanprevious high

Close below 50%retracement ofprevious bar

Dark Cloud Cover

Weak Hammer

Open[1] < Close[2]

Close[1] > Open [2] - [Open(2)-(Close(2)]

2

Weak Shooting Star

Open[1] > Close[2]

Close[1] < Open [2] - [Open(2)-(Close(2)]

2

Price was tested at support and held out. Opens near bottom and closes near high. Thelonger the real body of the candle, the stronger the signal al.

Price was tested at resistance but failed to break it. Opens near high and closes nearbottom. Longer real body means better signal.

2 1

2 1

Appears in a downtrend. Black body forms, next real is white and closes within real body of previous candle. Opens below the low of the prior session. New lows have failed to hold. The longer thewhite real body, the stronger the signal. Bullish reversal pattern.

Appears in an uptrend. Real white body forms, followed by a real black body. Opens above the highof the previous session. Price fails at resistance and falls to close over half way into the real whitebody of the last session. Prices have failed to hold at these levels. Bearish reversal pattern.

Previous candle rangefits entirely in realbody of next candle

Bullish engulfing pattern Strong Hammer

Open [1] < Low [2]

Close [1] > High [2]

Previous candle rangefits entirely in realbody of next candle

Open [1] > High [2]

Close [1] < Low [2]

Bearish engulfing pattern Strong Shooting Star

Southern DojiBullish Counterattack

Second Candle openslower, then rises toand closes at same levelas previous session.

Open [1] < Close [2]

Close [1] = Close [2]

*[-1 < Close (1) - Close (2) < 1]*

for the sake of computing, these two closes can be+ / - 1 pip apart.

2 1

2

2

1

1

Two candle formations cont.

Appears in a downtrend. A black candle forms, then the next cnadle opens lower than the low of theprevious session. The real body wraps around the prior black candle, showing that buting pressure hasovercome selling pressure. Potential support under low of most recent bar.

White real body engulfed by black real body. Top reversal pattern, most recent bar gaps open, witha new lower close. Supply seems to have overpowered demand. High of pattern may act as resistance.

In a downtrend, a black candle is followed by a white candle with the same close. Combine to form aSouthern Doji, indicating a pause, and possible reversal, of the current downtrend. Not as potent as aBullish Piercing pattern.

Second Candle openshigher, then falls toand closes at samelevel as previoussession.

Bearish Counterattack Northern Doji

Open [1] > Close [2]

Close [1] = Close [2] *

Bullish Harami Weak Hammer

Spinning top enclosedin an unusually longreal body.

Open [2] > High [1]

Close [2] < Low [1]

Bearish Harami Weak Shooting Star

Spinning top enclosedin an unusually longreal body.

Open [2] < Low [1]


Two candle formations cont.

2 1

1

1

2

2

Uptrend reversal signal. White real body is followed by black candle with equal close*. Second sessionopens higher but price levels are rejected. Suggests a slowdown of momentum in current uptrend. As withpiercing patterns, the higher (or lower) the open of bar 1, the stronger the signal.

In a downtrend, an unusually long black candle followed by a small real spinning top (colour isn’t important)The small range in the second session indicates uncertainty in the previous move; Harami patterns aresaid to mean the current trend is running out of steam.

In an uptrend, a long real white body followen by an enclosed Spinning Top. The Bulls are losing momentum. If the 2nd candle in a Harami pattern is a Doji, the pattern is known as a Bullish / BearishHarami Cross.

Tweezers top Hanging man Spinning Top

Tweezers top Harami Cross Spinning Top

Tweezers top Dark Cloud Cover Weak Shooting Star

Twin Top

Hanging Man Pattern

In an uptrend, long real white body. Second Candle is hanging man. Price was tested at twin top level, price closed lower, but bulls failed to close price significantly below the twin top resistance. Bullish momentumwas tested by bears, but not exhausted. Very weak continuation signal.

High [1] = High [2] *

Close [2] > (Open + 50%) [1]

Discretionary

Twin Top

DojiHigh [1] = High [2] *

(Open [1] = Close [1] * ) > Open [2]

Discretionary

In an uptrend, a long real white body followed by a Doji. Similar to Tweezer top Hanging man. High wastested twice, and held. Second session showed confusion. Hesitancy signal.

2 1

2

2

1

1

High [1] = High [2] *

Dark Cloud Pattern

Twin Top

Dark Cloud Pattern

In an uptrend, long white body followed by black body retracing over 50% way into prior bar.Both have the same high. Reversal Pattern, stronger than Weak Shooting Star.

Tweezers bottom and hammer Hammer

Tweezers Bottom and Harami Hammer

Tweezers bottom Piercing pattern Southern Dragonfly Doji

12

2

2 1

1

Low[2] = Low [1] *

[1] = Hammer

In a downtrend, two bars form with equal lows. Second bar is a Hammer pattern, indicatingmomentum away from support and a possible break to the north. Reversal Pattern.

Low [2] = Low [1] *

Discretionary

In a downtrend, weak reversal pattern. Two bars share same Low. Wait for confirmation of reversal.

Open [2] = Close [1] *

Low [2] = Low [1] *

In a downtrend, prices set two equal lows. Second candle is strong bullish bar, indicating firmbounce of support. Good reversal signal.

Double Bottom

Close above highof previouscandle

Double Bottom Low High Close Hammer

Double Top

Close below Lowof previous candle

Double Top High Low Close Shooting Star

Three Candle Formations

Three Black Crows Bearish Belt Hold

2

2

2

1

1

1

3

Low [1] = Low [2] *


In a downtrend, prices set two equal lows. Recent bar bounces off support and breaks highof previous bar. Strong Bullish reversal signal.

High [1] = High [2] *

Close [1] < Low [2]

In an uptrend, prices struggle at equal resistances. Recent bar fails at resistance and falls toclose below the low of the previous bar. Strong Bearish reversal signal.

Low [3] > Low [2] > Low [1]

High [3] > High [2] > High [1]

At swing highs, a reversal setup; in Downtrends, a continuation pattern. See E[1; 2; 3] entries.

Three White Soldiers

Evening Star Weak Shooting Star

Morning Star Strong Hammer

High [3] < High [2] < High [1]

Low [3] < Low [2] < Low [1]3

3

3

2

2

2

1

1

1

In an uptrend, continuation pattern; at swings lows, reversal setup. All bars are strongBullish bars. See E[1; 2; 3] entries.

In an uptrend, reversal setup. Good Bull bar, followed by low range spinning top or Harami,then a strong Bear bar. Bar 2 should occur at the pattern top.

Discretionary

Discretionary

In a downtrend, reversal setup. Good Bear bar, followed by low range spinning top or Harami,then a strong Bull bar. Bar 2 should occur at the pattern low.

3 2 1

High [3] > High [2]

Close [2] < Close [1]

Low [1] > Low [2]

High [1] > High [2]

Entry above High (3)Stop Loss set below Low (2)

3 2 1

High [3] > High [2]


Low [2] < Low [3]


Close [1] > Close [2]

Low [1] < Low [2]

Entry above High (2)Stop Loss below Low (1)

3 2 1

High [3] > High [2]


Open [1] > Close [2]

High [1] > High [3]

Entry above High [1]Stop Loss below Low [2]

3 2 1

High [3] > High [2]

High [2] > High [1]

Low [3] < Low [2]

Low [2] < Low [1]

Entry above High [3] / Below Low [3]Stop Loss Below Low [3] / Above High [3]

3 2 1

Low [2] < Low [3]

Low [1] < Low [2]

High [3] > High [2]

High [2] > High [1]

Series of small bars...

Entry below Low [1]Stop Loss above High [3]

...

3 2 14

High [4] < High [3]





Entry above High [3]Stop Loss below [1]

4 3 2 1

High [3] < High [4]


High [2] > High [3]


Low [1] < Low [3]


Entry above High [2]Stop Loss below Low [1]

combined candles

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