BULLISH

Morning Star Pattern: Reversal With the market downtrending, the prevailing trend
Reliability: High continues with a long down day. The second day
w 1st day is a long black day gaps down and the market closes near the open on a
w 2nd day is a small day that gaps in the small ranging day. The bulls takeover the next day
direction of the previous trend. when the market gapping up on the open and closing
Candle can be white or black near the high of the day. This shows the potential for
w 3rd day is a white day a rally.
* Morning Star Doji, Abandon Baby, Doji Star,
confirmation for Inverted Hammer.

Morning Doji Pattern: Reversal With the market in a downtrend, the bearish trend is
Star Reliability: High reinforced with a long black day. The market gaps
w 1st day is a long black day down on the open on the second day. However, this
w 2nd day is a doji that gaps in the day trades within a small range and closes at or near
direction of the previous trend its open. This points towards the potential for a rally,
w 3rd day is a white day as buyers enter the market. This view is reinforced
by the white third day. The Morning Doji Star is a
fully realized bullish Doji Star pattern. * Abandon
Baby, Morning Star

Abandon Baby Pattern: Reversal In a downtrend, the market supports the bearish
Reliability: High trend with a long black day and gaps down on the
w 1st day is usually a long black day open on the second day. However, the second day
w 2nd day is a doji that gaps in the trades within a small range and closes at or near its
direction of the previous trend open. This scenario definitely shows the potential
w 3rd day is a white day, gapping in for a rally, as many positions have been changed.
the opposite direction, with no Confirmation of the trend reversal is given by the
overlapping shadows white third day, and is supported by the upward gap.
* Doji Star, Morning Star, Morning Doji Star

Doji Star Pattern: Reversal In a downtrend, the market agrees with the bears
Reliability: Moderate with a long black day and a gap downward on the
w 1st day is a long black day second day. However, the second day trades within a
w 2nd day is a doji that gaps in the small range and closes at or near the open. This
direction of the previous trend forms the potential for a rally, as buyer are entering
w The shadows of the doji should not be the market and sellers could not push the market
long lower. Confirmation of the trend reversal would be a
higher open on the next trading day.
* Morning Doji Star, Abandon Baby

Piercing Line Pattern: Reversal In a prevailing downtrend the market gaps open, but
Reliability: High rallies strong to close above the previous days
w 1st day is a long black day midpoint. The bulls have been active and other bulls
w 2nd day is a white day with an open may join this reversal and support the new potential
below previous days low trend. The Piercing Line pattern is the opposite of
w 2nd days close is within but above the the Dark Cloud Cover.
* Meeting Lines
midpoint of the first days body

Meeting Lines
Easy Trade Resources. 2006.
Pattern: Reversal In a downtrend two days open below the previous
Reliability: Moderate trend. Even though the second day opens low, it
w 1st day is a long black day, and has a rallies to close at the close of the previous day. This
body that is lower than the previous typically means a benchmark has been defined by
trend traders, and a reversal is likely. * Piercing Line
w 2nd day is a long white day, and has a
body that is also lower than the
previous trend.
w Both days have identical closes Bullish
 Concealing Baby Pattern: Reversal With the market down trending or within a pullback
Swallow Reliability: High of an uptrend, the two consecutive Black
w 1st two days are Black Marubozu Marubozus indicate the bears are dominant. The gap
days (open is the high of the day and down on the third candle is bearish and an attempt is
the close is the low of the day). made to rally the stock (as evidenced by the upper
w 3rd day is a black day that gaps in the shadow). A second attempt comes on the next days
same direction but trades up into the gap up, but the stock sells off again to indicate the
body of the 2nd day. bulls are giving up. But this is why the pattern
w 4th day is a Black Marubozu that works. Once the bulls are given up, there are no
gaps up and sells off to engulf the 3rd more sellers, so the down trend stops. Once the
day. shorts start to cover, there are no sellers to stand in
the way of a bounce. * Ladder Bottom

Ladder Bottom Pattern: Reversal In a downtrend, the shorts may have a chance to sell
Reliability: Moderate and take in any profits by the fourth day. This results
w Three black days occur with lower in a gap upward on the fifth day. If the body of the
opens and closes fifth day is long, or the volume of trading is high, a
w 4th day is black with some upper bullish reversal has likely occurred especially if
shadow there is considerable volume on the last day . A
w 5th day is a white day that opens confirmation on the sixth day is suggested in the
above the body of the fourth day form a white candlestick, a large gap up or a higher
close, to be sure that the market has reversed.

Side by Side Pattern: Continuation During an uptrend three white days occur with an
White Lines Reliability: High upward gap between the first two and a similar body
w 1st day is a white day length and close for the last two. This suggests a
w 2nd day is a white day that gaps up definite building of the uptrend which should
w 3rd is a white day of about the same continue in the days ahead.
body length and close as the 2nd day

Three White Pattern: Reversal In a downtrend three long white days occur with
Soldiers Reliability: High consecutively higher closes. Generally this suggests
w Three long white days occur, each future market rises, as a reversal is in progress that is
with a higher close than the previous building with steady upward momentum.
day * Beginning of Three Line Strike
w Each day opens within the body of
the previous day and closes near the
high of the day

Three Line Pattern: Continuation The long black day drives prices back to where they
Strike Reliability: Low were at the start of the pattern. If the bullish trend
w 3 long white days occur with was strong before the pattern, then it should
consecutively higher closes continue.
w 4th day opens higher and closes * Three White Soldiers
below the open of the first day

Matching Low Pattern: Reversal Within a downtrend two black days occur with equal
Reliability: Moderate closes which may provide short term support , and
w 1st day is a long black day can cause a reversal on the next trading day.
w 2nd day is a black day with a close * Homing Pigeon, Harami
equivalent to the first days close

Bullish
Easy Trade Resources. 2006.
 Homing Pigeon Pattern: Reversal Within a downtrend, the sellers continue to have
Reliability: Moderate their way. However, the second day opening and
w 1st day is a long black day closing within the body of the first day suggests
w 2nd day is a smaller black day that an erosion of the downtrend. The second day is
is within the body of the first day also an inside day where the market is undecided
about the price. The downtrend may halt here and
rise.

Harami Pattern: Reversal After a long black day at the low end of a
Reliability: Low downtrend, a white candlestick opens higher than
w Along black day occurs the previous days close. The price is driven up, as
w 2nd day is a white day where the real many shorts are covered, which encourages
body is completely engulfed by the further buy-ins. The Harami indicator should be
real body of the first confirmed with the next trading days candlestick
following the reversal trend. The Harami pattern
is also the first two days of the Three Inside
pattern.

Upside Tasuki Gap Pattern: Continuation
Reliability: Moderate
w The first 2 days are white days with
an opening gap
w 3rd day is a black day that opens
within the body of the 2nd day and
closes within the gap of the 1st two
days
Within an uptrend a white day occurs, followed by
another white day that gaps up. A black day
eventuates, and is likely the result of temporary
profit taking. The trend should continue to follow
the direction of the upward gap.
* Upside Gap Three Methods

Upside Gap Three Pattern: Continuation An uptrend is followed by two long white days
Methods Reliability: Moderate with a gap upward between them. The third day is a
w Two long white days occur with a black day, but one that closes the gap between the
gap between them first two. This should be seen as support for the
w 3rd is a black day that fills the gap upward trend, and may be caused by temporary
between the first two days profit taking.
* Upside Tasuki Gap

Kicking Pattern: Reversal This pattern is a strong sign that the market is
Reliability: High headed upward. With this indicator, the previous
w 1st day is a Black Marubuzo day market direction is not as important as with other
w 2nd day is a White Marubuzo day indicators. * Separating Lines
that gaps upward

Separating Pattern: Continuation Within an uptrend a long black day occurs. The
Lines Reliability: Low second day, however, picks up where the previous
w 1st day is a black day days trading left off and rallies to close higher. This
w 2nd day is a white day that has the suggests that the uptrend should prevail.
same opening price as the first day * Kicking

Bullish
Easy Trade Resources. 2006.
 Rising Three Pattern: Continuation In an uptrend, a long white day occurs, following by
Methods Reliability: High three days of small real bodies that fall into a short
w 1st day is a long white day downtrend. On the fifth day, the bulls come in strong
w 2nd, 3rd, and 4th days have small real to close at a new high. This small downtrend, in
bodies and follow a brief downtrend between two long white days, is consistent with
pattern, but stay within the range of investors taking a break. The upward trend should
the first day continue.
w 5th day is a long white day that closes * Mat Hold
above the close of the first day

Mat Hold Pattern: Continuation This is a resting pattern for the bulls. The 2nd day
Reliability: High still closes at a new high and the 4th day still closes
w 1st day is a long white day. above the 1st day's open. Bears worry that a reversal
w 2nd day is a black day that gaps in not in the cards this time. Hence, the bullish trend
above the 1st day. continues on the 5th day.
* Rising Three Methods
w The next two days are small body
days which trend lower and stay
within the range of the 1st day.
w The last day is a white day which
closes above the previous four day's
range.

Engulfing Pattern: Reversal Occurring in a downtrend, the Engulfing depicts an

Reliability: Moderate
w Along black day occurs
w 2nd day is a white that completely
engulfs the real body of the first day
opening at a new low, followed by a high buy-in that
closes at or above the previous days 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.

Three Outside Up Pattern: Reversal This pattern is a more reliable addition to the
Reliability: High standard Engulfing pattern. The third day is
w A bullish Engulfing pattern occurs in confirmation of the bullish trend reversal.
the first 2 days * Confirmation of Engulfing
w 3rd day is a white day with a higher
close than the second day

Three Inside Up Pattern: Reversal This pattern is a more reliable addition to the
Reliability: High standard Harami pattern. The third day is
w A bullish Harami pattern occurs in confirmation of the bullish trend reversal.
the first 2 days
w 3rd day is a white day with a higher
close than the 2nd day

Breakaway Pattern: Reversal A downtrend sees prices bottoming out and

Reliability: Moderate levelling off. The result is a long white day which
w 1st day is a long black day does not close the gap into the body of the first day.
w 2nd day is a black day that gaps This suggests a short term reversal.
below the first day
w 3rd and 4th days continue to in the
direction of the second with lower
consecutive closes
w 5th day is a long white day that closes
into the gap between the 1st and 2nd
days Bullish

Easy Trade Resources. 2006.

 Three River Pattern: Reversal Two black days occur consecutively, with the
Bottom Reliability: Moderate second days body within that of the first day.
w 1st day is a long black day However, the long lower shadow shows the bearish
w 2nd is a black Harami day, with a tide may be reversing. The third day opens lower,
shadow that sets a new low reinforcing the indecision of the market and ends in
w 3rd day is a short white day which a rally. The bulls should take over.
closes below the close of the 2nd day

Stick Sandwich Pattern: Reversal This pattern shows three days consecutive higher
Reliability: Moderate opens, but results in an eventual close equal to the
w 1st day is a black day first days close. This pattern is indicative of the
w 2nd day is a white day that trades market finding a support price. The overall trend has
above the close of the first day the potential to reverse, building on the new support
w 3rd day is a black day with a close price.
equivalent to the first day

Three Stars in Pattern: Reversal In a downtrend three black days occur. However
the South Reliability: Moderate each day is consecutively weaker within the trend,
w 1st day is a long black day with a long suggesting that some buying is occurring. Small
lower shadow rallies on each day keep the markets lows from
w 2nd day is a black day similar to the reaching that of the first day. All indications are that
1st, but smaller, with a low above the the tide is slowly turning toward the bulls.
1st low
w 3rd day is a small Black Marubozu
that lies within the 2nd days trading
range

Tweezer Bottom Pattern: Reversal The price action has trended downward then two
Reliability: Low consecutive days of equal lows signal support. This
1st day consists of a long body candle. could signal a short term bottom is forming.
w 2nd day consists of a short body
candle that has a low equal to the
prior day's low.
w The color of each candle body is not
considered in the matching of this
pattern.

Tri Star Pattern: Reversal In an long downtrend, the market shows signs of a
Reliability: Moderate rally as the real bodies have grown progressively
w A doji occurs on 3 consecutive smaller. The trend culminates with the bullish Tri
trading days Star, identifying that many bearish positions may be
w The 2nd doji gaps below the first and reversing.
third

Gravestone Doji Pattern: Reversal In a downtrend or during a pullback within an

Reliability: Moderate uptrend, the stock gaps down. A valid attempt is
w A Doji forms at the lower end of the made to rally the stock off the bottom, but the
trading range. strength subsides and the stock falls to close near the
w The upper shadow is usually long days low at the same price it opened. The rally
while the lower shadow is small or attempt failed, but it does suggest that there are
almost nonexistent. some bulls out there looking to buy. For a reversal to
occur a strong follow up day is needed with solid
Volume.

Bullish
Easy Trade Resources. 2006.
 Dragonfly Doji Pattern: Reversal
Reliability: Moderate
w A Doji forms at the upper end of the
trading range with a long lower
shadow (the longer the more bullish).
In a downtrend or within a pullback of an uptrend, a
sharp intraday sell-off is followed by a reversal
which causes the stock to close at its opening price
near the days high. This hints at the possibility of a
reversal. Bulls most likely were shaken out by the
intraday weakness, and shorts start getting a little
worried with the bounce. A strong following day on
solid volume is needed to confirm the pattern.
* Hammer

Harami Cross Pattern: Reversal After a long black day at the low end of a downtrend,
Reliability: Moderate the market opens higher than the previous days
w Along black day occurs close and closes at the open. The Harami Cross
w 2nd day is a doji within the real body indicator is more definite than the basic Harami
of the previous day indcator, and signifies a reversal for the bulls.
* Harami, Matching Low

Hammer Pattern: Reversal There is a sharp sell off after the market opens
Reliability: Low/Moderate during a downtrend. However, by the end of the
w Small real body at the upper end of trading day, the market closes at or near its high for
the trading range the day. This signifies a weakening of the previous
w Lower shadow at least twice as long bearish sentiment, especially if the real body is
as the real body No (or almost no) white (the close is higher than the open price). Since
upper shadow 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. * Dragonfly Doji

Inverted Hammer Pattern: Reversal
Reliability: Low
w Small real body at the lower end of
the trading range
w Upper shadow usually no more than
twice as long as the real body
w No (or almost no) lower shadow
As the market opens below the close of the previous
day, the bulls rally briefly, but not enough to close
above the previous days 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.
* Gravestone Doji, middle of Morning Star

Spinning Top Pattern: Reversal The tail length is unimportant and the c andle can be
Reliability: Moderate either colour. It is a tug of war between the bulls and
w Small real body around the middle of the bears. The market opens and closes around the
the trading range same price. The pattern is given greater importance
w Displays both upper and lower if there are gaps present. Spinning tops are similiar
shadows to the doji.

Bullish
Easy Trade Resources. 2006.
 BEARISH
Shooting Star Pattern: Reversal Within an uptrend, the market gaps open above the
Reliability: Low previous days close. It rallies to a new high then
w Small real body at the lower end of loses strength and closes near its low - a bearish
the trading range. White or black. change of momentum. Confirmation of the trend
w Prices gap open reversal would by an opening below the body of the
w Upper shadow usually at least three Shooting Star on the next trading day. If the open
times as long as the real body and the close are identical, the indicator is
w No (or almost no) lower shadow considered a Gravestone Doji. The Gravestone Doji
has a higher reliability associated with it than a

Evening Doji Star Pattern: Reversal
Reliability: High
w 1st day is a long white day
w 2nd day is a doji that gaps in the
direction of the previous trend
w 3rd day is a black day
Within 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.
* Doji Star, Evening Star, Abandon Baby, Two Crows

Abandoned Baby Pattern: Reversal In an uptrend, the market builds strength on a long
Reliability: High white day and gaps open on the second day.
w 1stday is usually a long white day However, the second day trades within a small range
2nd day is a doji that gaps in the and closes at or near its open. This scenario
direction of the previous trend definitely shows a decrease of confidence in the
w 3rd day is a black day, gapping in the current trend. Confirmation of the trend reversal is
opposite direction, with no the black third day, which is given extra validation
overlapping shadows by the downward gap.
* Evening Star, Evening Doji Star, Two Crows

Evening Star Pattern: Reversal In an uptrend, the market builds strength on a long
Reliability: High white day and gaps open on the second day.
w 1st day is a long white day However, the second day trades within a small range
w 2nd day is a small day that gaps in the and closes at or near its open. This scenario
direction of the previous trend. White generally shows the prevailing trend is weakening.
or black in colour Confirmation of the trend reversal is the black third
w 3rd day is a black day day. * Evening Doji Star, Abandon Baby, Doji Star, Two
Crows Upside Gap, Two Crows

Upside Gap Two Pattern: Reversal In an uptrend the market stalls, but still closes above
Crows Reliability: High the previous days close. The next day, it stalls more
w 1st day is a long white day continuing but remains above the first days close. This is a
in an uptrend signal that the market can no longer hold its position
w 2nd day is black and gaps up and is in for a bearish ride.
w 3rd day is also black and engulfs the * Two Crows, Evening Star
previous black day, but still closes
above the 1st day

Two Crows Pattern: Reversal In an uptrend the market closes lower after an
Reliability: Moderate opening gap upwards. This is followed by another
w 1st day is a long white day black day which fills the gap. The Two Crows
w 2nd day is a black day that gaps pattern suggests the weakening of the uptrend, and
above the first day hints at a trend reversal.
w 3rd day is a black day that opens * Upside Gap Two Crows, Evening Star
within the body of the 2nd day and
closes within the body of the 1st day

Bearish
Easy Trade Resources. 2006.
 Doji Star Pattern: Reversal In an uptrend, the market builds strength on a long
Reliability: Moderate white day and gaps open on the second day.
w 1st day is a long white day However, the second day trades within a small range
w 2nd day is a doji that gaps in the and closes at or near its open. This shows the currnet
direction of the previous trend trend is weakening. Confirmation of a trend reversal
w The shadows of the doji should not be would be a lower open on the next trading day.
* Harami Cross, start of Evening Doji Star
long

Harami Cross Pattern: Reversal After a long white day at the high end of an uptrend,
Reliability: Moderate the market opens lower than the previous days
w Along white day occurs close. Trading is typically light and the day ends
w The 2nd day is a doji that is within the with a close at the same price as the open and within
range of the previous days real body body of the first day; an even stronger signal than the
basic Harami pattern that the current uptrend is
losing strength. * Doji Star

Downside Gap Pattern: Continuation A downtrend is followed by two long black days
Three Methods Reliability: Moderate with a gap downward between them. The third day is
w 2 long black days occur with a gap a white day, but one that closes the gap between the
between them first two. This should be seen as support for the
w 3rd day is a white day that fills the downward trend.
gap between the first two days * Downside Tasuki Gap

Downside Tasuki Pattern: Continuation In a downtrend a black day occurs, followed by

Gap Reliability: Moderate another black day that gaps down. A white day
w The 1st 2 days are black days with an ensues, and is likely the result of investors
opening gap temporarily taking advantage of the low buying
w 3rd day is a white day that opens price. The trend should continue to follow the
within the body of the 2nd day and direction of the downward gap.
closes within the gap of the first two * Downside Gap Three Methods
days

Hanging Man Pattern: Reversal There is a sharp sell off after the market opens
Reliability: Low during an uptrend. However, by the end of the
w Small real body at the upper end of trading day, the market closes at or near its high for
the trading range the day. This signifies the potential for further sell-
w Lower shadow at least twice as long offs. Since the certainty for a Hanging Man
as the real body indicator is low, the trend reversal can be confirmed
w No (or almost no) upper shadow 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. * Dragonfly Doji

Dragonfly Doji Pattern: Reversal In an uptrend or within a bounce of a downtrend, a

Reliability: Moderate
w A Doji forms at the upper end of a
trading range with a long lower
shadow (the longer the more bearish)
with no, or almost no upper shadow.
sharp intraday sell-off is followed by a reversal
which causes the stock to close at its opening price
near the day's high. Although the stock recovers
from its intraday sell-off, it suggests the bulls are
starting to lose strength, and a reversal may occur. A
weak following day on solid volume is still needed
to confirm the pattern.
* Hanging Man

Bearish
Easy Trade Resources. 2006.
 Gravestone Doji Pattern: Reversal In an uptrend or within a bounce of a downtrend, the
Reliability: Low/Moderate stock gaps up. A valid attempt is made to rally the
w A Doji forms at the lower end of the stock, but the strength subsides and the stock falls to
trading range. The upper shadow is close near the day's low at the same price it opened.
usually long while the lower shadow Failure to follow through with strength suggests the
is small or almost nonexistent. bulls may be losing strength. Although this is not
necessarily extremely bearish, it is less bullish, so
stops should be moved up or profits taken on longs.
For a reversal to occur a weak day is needed to
confirm the pattern. * Shooting Star

Dark Cloud Cover Pattern: Reversal
Reliability: High
w 1st day is a long white day
w 2nd day is black with an open above
the high of the previous day
w 2nd day closes within but below the
midpoint of the first days body
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 days open: a
warning sign to bullish investors. The Dark Cloud
Cover pattern is the opposite of the Piercing Line
pattern. * Engulfing, Meeting Lines

Meeting Lines Pattern: Reversal In an uptrend two days open above the previous
Reliability: Moderate trend. Even though the second day opens high, it
w 1st day is a long white day, and has a rallies to close at the close of the previous day. This
body that is above the previous trend typically means a benchmark has be defined by
w 2nd day is a long black day, and has a traders, and a reversal is likely. The bearish Meeting
body that is also above the previous Lines pattern is similar to, but less reliable than the
trend. Dark Cloud Cover pattern.
w Both days have identical closes * Dark Cloud Cover, Engulfing

Engulfing Pattern: Reversal Occurring in an uptrend, the Engulfing depicts an

Reliability: Moderate opening at a new high, followed by a high volume
w Along white day occurs sell-off that closes at or below the previous days
w 2nd day is a black day that open. This signifies that the uptrend has been hurt
completely engulfs the real body of and the bears may be gaining strength. The
the 1st day Engulfing indicator is also the first two days of the
Three Outside patterns. * Dark Cloud Cover, Meeting
Lines

Kicking Pattern: Reversal This pattern is a strong sign that the market is headed
Reliability: High downward. With this indicator, the previous market
w 1st day is a White Marubuzo day direction is not as important as with other indicators.
w 2nd day is a Black Marubuzo day that * Separating Lines
gaps downward

Separating Lines Pattern: Continuation
Reliability: Low
w 1st day is a white day
w 2nd day is a black day that has the
same opening price as the first day
In downtrend a long white day occurs. The second
day, however, picks up where the previous days
trading left off and rallies to close lower. This
suggests that the downtrend should remain intact.
* Kicking

Thrusting Pattern: Continuation The Thrusting pattern is a weaker relative of the On

Reliability: Low
w 1st day is a long black day
w 2nd day 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
Easy Trade Resources. 2006.
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 days close doesnt even reach the midpoint
of the first days body, the bulls will likely be
discouraged and the downtrend will continue.
* On Neck, In Neck
Bearish
 In Neck Pattern: Continuation The In Neck pattern is a less severe relative of the
Reliability: Moderate On Neck pattern. A small rally is built by the second
w 1st day is a long black day day, but ends near the close of the previous black
w 2nd day is a white day that opens day. Although, as in the case of the On Neck pattern,
below the low of the previous day and the downtrend should prevail, it may take longer to
closes barely above or equal to the evolve.
close of the previous day * On Neck, Thrusting

On Neck Pattern: Continuation The On Neck pattern is typical in a downtrend. The

Reliability: Moderate
w 1st day is a long black day
w 2nd day is a white day (not long) that
opens below the low of the previous
day and closes at the low of the
previous day
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.
* In Neck, Thrusting

Advance Block Pattern: Reversal
Reliability: Moderate
w 3 long white days occur, each with a
higher close than the previous day
w Each day opens within the body of
the previous day and closes near the
high of the day
w Each days body is significantly
smaller than the previous days body
w The 2nd and 3rd days should exhibit
long upper shadows
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.
* Deliberation

Deliberation Pattern: Reversal In an uptrend three white days occur with

Reliability: Moderate
w 2 long white days occur, the 2nd with
a higher close than the 1st
w A 3rd white day is a spinning top or
doji that gaps above the 2nd day
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
* Advance Block

Three Inside Pattern: Reversal This pattern is a more reliable addition to the
Down Reliability: High standard Harami pattern. The third day is
w A bearish Harami pattern occurs in confirmation of the bearish trend reversal.
the first 2 days * Harami
w 3rd day is a black day with a lower
close than the 2nd day

Harami Pattern: Reversal After a long white day at the high end of an uptrend,
Reliability: Low a black candlestick opens lower than the previous
w Along white day occurs days close. Trading is typically light and the day
w 2nd day is a black day that is ends with a close lower than the open and within
completely engulfed by the real body body of the first day-a signal that the current uptrend
of the first day is losing strength. The Harami indicator should be
confirmed with the next trading days candlestick
following the reversal trend. The Harami pattern is
also the first two days of the Three Inside patterns.
* Three Inside Down

Bearish
Easy Trade Resources. 2006.
 Three Black Pattern: Reversal In an uptrend three long black days occur that open
Crows Reliability: High at the previous days close. This pattern is similar to
w Three black days occur, each with a the Three Black Crows pattern but typifies a more
close below the previous day severe loss of buying power. A bearish trend is
w Each day opens at the close of the almost certain.
previous day * Beginning of Three Line Strike

Three Line Strike Pattern: Continuation
Reliability: Low
w Three long black days occur with
consecutively lower closes
w The 4th day opens lower, but closes
above the open of the 1st day
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 Black Crows

Three Outside Pattern: Reversal This pattern is a more reliable addition to the
Down Reliability: High standard Engulfing pattern. The third day is
w A bearish Engulfing pattern occurs in confirmation of the bearish trend reversal.
the first two days
w The 3rd day is a black day with a
lower close than the 2nd day

Falling Three Pattern: Continuation In a downtrend, a long black day occurs, following
Methods Reliability: High by three days of small real bodies that fall into a
w 1st day is a long black day short uptrend. On the fifth day, the bears come in
w 2nd, 3rd and 4th days have small real strong to close at a new low. This small uptrend, in
bodies and follow a brief uptrend between two long black days, is consistent with
pattern, but stay within the range of investors taking a break. The downward should
the 1st day continue.
w 5th day is a long black day that closes
below the close of the 1st day

Tri Star Pattern: Reversal In an long uptrend, the market shows signs of
Reliability: Moderate weakness as the real bodies have grown
w A doji occurs on 3 consecutive progressively smaller. The trend culminates with the
trading days Tri Star, identifying that there is little strength left,
w The 2nd doji gaps above the 1st and and signaling a return of the bears.
3rd

Breakaway Pattern: Reversal An uptrend sees a bullish surge that eventually

Reliability: Moderate weakens. The result is a long black day that does not
w 1st day is a long white day close the gap into the body of the first day. This
w 2nd day is a white day that gaps suggests a short-term reversal.
above the first day
w 3rd and 4th days continue to in the
direction of the second with higher
consecutive closes
w 5th day is a long black day that closes
into the gap between the 1st and 2nd
days

Bearish

Easy Trade Resources. 2006.

 Tweezer Top Pattern: Reversal The price action has trended upward then two
Reliability: Moderate consecutive days of equal highs signal resistance.
w 1st day consists of a long body This could signal a short term top is forming.
candle.
w 2nd day consists of a short body
candle that has a high equal to the
prior day's high. The color of each
candle body is not considered in the
matching of this pattern.

Side by Side Pattern: Continuation In a downtrend a black day is followed by two white
White Lines Reliability: Moderate that are gapped below the first day. This typically
w 1st day is a black day means the shorts are covering their positions, and no
w 2nd day is a white day that gaps reversal is about to occur. The downtrend should
down remain intact for the near future.
w 3rd day is a white day of about the
same body length and close as the
second day

Belt Hold Pattern: Reversal In an uptrend, a black body occurs with an open that
Reliability: Low is also the high for the day. This may cause many
w A black body occurs in an uptrend positions to be sold, perpetuating a bearish reversal.
with no upper shadow

Spinning Top Pattern: Reversal The tail length is unimportant and the c andle can be
Reliability: Moderate either colour. It is a tug of war between the bulls and
w Small real body around the middle of the bears. The market opens and closes around the
the trading range same price. The pattern is given greater importance
w Displays both upper and lower if there are gaps present. Spinning tops are similiar
shadows to the doji.

Bearish

Easy Trade Resources. 2006.

 DISCLAIMER:

The candlestick patterns explained herein are intended to inform. They come with no warranty of any kind. If
you should choose this information for your investment decisions, you do so at your own risk. The
information contained within is drawn from sources believed to be factual and reliable, but in no way does the
writer represent or guarantee the accuracy or completeness thereof, nor in providing it, does the writer assume
any liability. Whilst all of the information contained in this publication has been prepared with all reasonable
care, no responsibility or liability is accepted by the writer for any errors or omissions or misstatements
however caused or arising. Any opinions, reflect the judgment and assumptions of the writer and third parties
on the basis of information as at the date of publication and may later change without notice.
This publication is not and should not be construed as an offer to sell or the solicitation of an offer to purchase
or subscribe for any investment. This information might contain unsolicited general information only,
without regard to any investors individual objectives, financial situation or needs. It is not specific advice for
any particular investor. Before making any decision about the information provided, you must consider the
appropriateness of the information in this document, having regard to your objectives, financial situation and
needs and consult your adviser. The writer is not aware that any recipient intends to rely on this publication
and the writer is not aware of the manner in which a recipient intends to use it.
Investment in financial products involves risk. Past performance of financial products is no assurance of
future performance. Investors should take specific advice on the basis of current information relevant to their
particular circumstances, and have regard to the risk that the future performance of investments will differ
from past performance.

U.S. Government Required Disclaimer:

Commodity Futures Trading and Options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the futures and options
markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to
Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve
profits or losses similar to those discussed on this web site. The past performance of any trading system or
methodology is not necessarily indicative of future results.

U.S. Government Required Disclaimer:

Commodity Futures Trading and Options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the futures and options
markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to
Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve
profits or losses similar to those discussed on this web site. The past performance of any trading system or
methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE

CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED
RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT
BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE
IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT
THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING
MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR
TO THOSE SHOWN

Easy Trade Resources. 2006.