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309 views34 pagesBullish Reversal Pattern
Uploaded by
Simon Tin Hann PyngCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
/ 34
iS Sct aah oy he Caen a a
Se Se ein Seng Sod ey sol bs
BULLISH ABANDONED BABY
befiition
This is 2 tes canclestice patem signaling a major bottom reversal tt is exactly the same ae the sulch
FPorring Ooi tar with one imaerar iferancs. Tha shadows on ths Doji must alzo ap bslew the chadons of
the fret and thed days. Is name comes from the second day ofthe pattern sthich Fonts out onthe chert by
tee tee an abendoned baby ofthe first and thrd days. Bascal the ellen concct of = black candltck
fellonsd by a Doi that gape away (incusing shadowe) from the prior Black eandestics andthe flloning white
candlestick wnose closing is well into te frst blak body.
4. The markets chacacterzed by a prevaling downtrand
2.A blac candlestick ie cbearvad onthe fist day.
'5. Then we 2093 Doi an the escond day whocs chadews gap below the provcus days lower shadow.
4 Third dey/s whte candlestick gop in the apposite drecson with na shadows overeppin,
Pattern Regu
ments and Flexibility
“The Eulch Abandoned Baby chould ctr with a black candlestick that inet short, andit must consnue with 3
Doi that makes 2 gap anay from the prior candlestcs (including chadaws). The tid day of the paren is 3
tite candlestick. The gap between the low of this candlestick and the high af the Dail may be ignored. The
tite candlestick must cose well ini the black candlestick thet appeers atthe heginang of the patisn, The
fcert of how high tie enclectck must close is defined sccercina to the other candlasscks beloning tote
potter. The third day's losing must reach the micpoine between the first coy’s opening and the soeans any
lowest body eve
rad
‘= Behavior
‘A black candles confims the continuation of the downrand that i in progress. The anpearance of he Def
‘that causes @ huge oap incicatos thatthe bears are ell puching down ths price. The tht rice action beswest
ihe ee tees neha ed Pees aes ete at el In te tad the bs SP
the candietck ir ebove the previous day, trying to cover ome ofthe ground from the dwn doy.
Buys Stop Loss Levels
“ine confirmation evelie defines se the Iss clos, Prices ehould erase above thi level for confirmation.
“The stop lane levels defined as the lower ofthe Ins tw lows Following the QU, f prices go down intoad! of
sina up, and cose or rake teo concecstve dally lows below the exes Ices leval, wre no bearish param ic
Garected, than the erp les i wiggered. BULLISH AFTER BOTTOM GAP UP
prt he hc Msc Ne uri ecobites fe Hay ees aha nl eS St prc
rove, confeming tha roveral.
Recognition Criteria
4 The pattern begin with 9 bck candlestick
2. The neat tno days ore les black days, and each one clases owner than the previsus day's close
5. The hird day gzos dawn and epens below the dose of the second day
4 Tha fours day ic wht
Sheth ey Seg ni sition peeling (nang pen chev ie prem fy ome
Pattern Requirements and Flexibility
“The fest tee days ofthe Eulish After sox Gap Up are strong black candlesticks with consceutve lower
pans and lower closes. The third black enculd gap cown. Tha fours day ic a whte candleseck tt opens
higher and covers the g2p. The fith day is a strong white candlestick thet makes a body gap wth the Fourth
ope Tem ere shee ett Heine
Trader's Behavior
‘The fest two black days and the gapping down thie back day create 2 market with an extended dountrend
‘The fourth day en song whte doy thot shows there might fly be some seeskness the cecine. The ith
‘overentanded Ruel othe downside and a reversal ofthe prior and has begun,
Buy/Stop Loss Levels
“The confirmation lvele defined 25 the ast close Pree shoul eres ove thie lve! for confirmation,
‘The stop los levelie defined ae te loner ofthe lat two ions. Following the BLY, pricee go down instead of
‘going up, and dose or make two consecutive dally lows below the sto loss level, while no beavsh pater is
detected, then the st loss is riggered. BULLISH BELT HOLD
Salish Belt Held iz a single candlestick patieen, basically, # Whte Opening Marubozs that secure in a
donntrand.& opene onthe low ofthe day and than a rally Begins during the day agaist the overall rend of
the market, which eventual stops men = close nent the hgh, lenving * smal shadow ontop oF ene cand. If
stuonget
1, The marke is characterizes by 9 prevaing éowrtrend.
2. The mncker gaps down and opens at ts on, and closes near to te high of he doy.
53. long white b2dythat has no lamer shadow (2 White Opening Marubozu) = observed.
Pattern Hequirements and Flexabilty
‘Avwhite oxsring Marubozu or a White Narubozu (wth no upper or lower shadow) cheuld be ezcnin a Sullch
Belt Hol ana # should apen lower thon the twa preceding black candles
‘Trader's Behavior
‘The market opens lower with a signficert gap in the direction of the prevailing downtrend. So, the fast
Imoression recs in the opening orice isthe continuation ef tho dowrtrend. However, aftr the market
‘pening, things change rapicly and the market moves in the opposite diecion from there on. Ths cases
‘uch earcarn among the shor traders, leading to the covering of many postions, which ould
Ciection ofthe trend and start rally fort bull
verse the
Buy/ Stop Loss Levels
“The confirmation levels defined ae the act ose, Prices should eroes above tis evel for eonfrmation.
‘The stop loss levels defined 25 the last low. Following the BUY if prices go down instead of going up, and close
fr mais two concccitive daly Ions below the stp los level, while no Bearish gator is desacted, then the
‘op los is tnggered. SteTTow i ronka emong the others. This il give you on
a Non Ee per Sonat ood tba a he
BULLISH BREAKAWAY
‘This five candlestick patter tarts wih a strong blac candlestick. The next the days after the downside cep
lose insie the gan between the fet and escond dove, Thc cugaess 3 short term revere.
Prices. However, the lat day corpltniy erates the ited losses ef down days end
2. The second day i eles black and the Hedy geps nthe direction oF he rend
3. The third and feurth dave contrue the wand direc. Itic better fh third day is white, butt may azo be
Binck ne the fourth coy.
4. The ith dey i hte one that closes inside the gop formed between the frat to ey
Pattern Requirements and Hlesabilty
‘he frst black candlestick of the Bullch Breakaway should nct be shor. However the fllowing three Black
fandiesicke as? the gap can be shor, while the third candlestick in the midcla can be wht, 100. The ast
hte day should close inside te gop bu should nat case the gop
Trader's Behavior
‘The dowrtrend has aceslerated with 2 bia ap and then ctas to faze, but ail moves inthe same diecion.
‘The slow deterioration ofthe downtrand i cute evident. Fraly, 2 uoward curs completaly roversas the
frspameatieee day eect Whe ac fever rela fect one beset
Sil, Rchort erm reversal hee taken place but ill confirmaton may be necessary
Buy/Stop Loss Levels
“The confirmation levels dafned ac the lactose, Prices should cress above thie evel for confirmation
‘The stop loos level defined asthe lea low Felling the BLY i prices go down instead af going up, and close
fr make t4o consecutive daily lows below the stop les lava, while no bearish pater i deractad, then the
‘sop loses trggeres. Seat ROG ire San Soe tb So bo
BULLISH CONCEALING BABY SWALLOW
Definition
‘his is a pata formed by four bic candlesticks. After two falng Slack Marubozu dave, a chort dawn day
engulfed by 2 forts bine ny shows that the downtrens hes erodes significa espe he no close is at 2
pr a
1. 1wo fling slack Marubezu dave st tha bezining confrms the dawrerend
2 the thre cay © = shon plac wth cowneise gop. However, the cay trades into the previous day's body,
producing long upper shadow
5. The fourth back day completely engutfe ue third day including the shad
Pattern Requirements and Flexibility
‘The fret wo daye ofthe Sullsh Concsaing Saby swallow ar types of Slack Marubcau. The hire day is ashore
beck candlestick with an upper shadon thet evens rt the previous day's trading range. The fourth black
day maker new low and engufs te trading range ofthe third day completly
Trader's Behavior
‘wo black Marubozu shaw that éowrtrnd ie cnsnung tthe sacaction ofthe bears. On the thin day, we se
= downers gop further confirming tne owrtrend However pnces onthe thi day start going above the dose
of hs prev ayy nore oe et hc boast red vantinegh soy we or hoor Es
low. The nextday chawe usa sgrfcantly richer cap inthe onerina, Rec the oparina, waver, sic aosin
29 down closing at a new low. This last day may be interpreted as 9 goed chance fr the shar-slers to cover
Uther shor poston. An upside reversal tl requires confirmation wth e whe candlestick,
Buy/Stop Loss Levels
‘The confirmation love ic dined as the midpoint ofthe provcus shor black body. Prices should oss above
this level or confirmazon.
“The stop los level ie defi ae the loner ofthe last two lon. Following the BLY prices go down instead of
0ing un, and close or make two conseaunve dlly lows below the top loss level, wile no bearish pattern = SESTTEE igre among the thers rl give you an
BULLISH DELIBERATION BLOCK
Definition
‘This pattern consis of three consecutive bac candlestics with consecutively lower doses in 2 downtrend. tt
isthe compliment ofthe Sesri OelberationSlock Pater,
1. Marketis characterized by a prevalng downtren
2. black candles appears on the ist day.
3. The next day is another black canclestic, which opens in the range of the previous day's body and closes
below the pravicue anys ose.
4 The isl doy 9 shor Back candlestick: 9 spinning to ora Dos tat gaps down below the second day
Pattern Requirements and Flebilty
‘The fist we black conilesticks appesring inthe Bullish Deiberaton Block should not be sort. The second day
hould opan ator highar than the doce of tho Fst cay, while dose of he sacond day shoul be ator Below
‘he cose ofthe frst doy. The gapping ovr tied candlestick con be 9 shor black candlestick cr 2 Do}
Trader's Behavior
chs secure the dow
nd, and the bears are content with the situation. The
secure dowrtvend atracs more bears, andthe thied day e2ene below the dose af the sracedina day. The thie
{ay io alco 3 biz day, convincing the deare sbeut the continuation ofthe dawmerend. A cose” look, however,
reveal signs of weakness. The renge ofeach body i gettng smaller day-by-day and the irs ey gape below
‘aking sar which shows indecision
Buy/Stop Loss Levels
‘The confirmation levels defined 25 the midpoint betwesn the last close and the body boom of the sacend
ny. Prices shou crass above tis eve for confemnton.
‘Th sto los levels defined as the loner ofthe lst two lone Flloning the BUY, prices o down instead of
‘sing un, and close or make wo concscuve dally lowe below th step loss lvl, while no bearish astern is
Setectad then the stp loan triggered HS Mout Be petier’s stenath and recy ard hee
ovlm your buying eons
BULLISH DESCENT BLOCK
Definition
‘This patern consists of three consecutive blac candlesncks wih consecunvely lower doses ina dowrtrend. It
1. The marks is characterized by 2 prevaing dountend.
2.4 black eaclestc appears onthe fis day.
opening inthe range ofthe previous day's body.
4c The last two dave have long lower ehadowe.
Pattern Requirements and Flexibility
consecutive black candlesticks mast open within the range ofthe previous days body, and close below the
brevis day's ces, The bodice ofthe trae black candlacticks should at shorter while the loner chadowe ast
‘Trader's Behavior
2 strong black candlestick is followed by another black candlestick dosing below the previous dose. As wo
‘oncecutive black candlesticks occur, the dowtrand seems secure and the boars are contant. The secure
onrtrendatracs more bears, andthe third dy fe agin = Binck candles tha is esing below the previ
SSeys dose. ith thee black candlestick, it lke ae though bears cule over the market; however there a=
lane of wealeieseae, Firat, the bodies ast shorter and enorcr ehawing that indsction i incrasina. Secancly,
each day opene within the range of ts previeus cay’s body. Thi, the lower ehadews are geting longo
ile the second and the thd days are casing lower, the ditance between closes are getting shorter This
means that the donntrend is losing strength and that shor traders must be caLtous.
Buy/Stop Loss Levels
‘The confirmation lvale dafined ab the midocine ofthe last back body. Prices should crase above this lvsl for
‘The sto los level ie dafined ae hs loner of tha lst two lone. Falling the BU f prices go down instead of
‘omg up, and close or make tno consecubve daily lows below the stop less level, whe no bearish pattern Is
Seteced, then the stop ose is Wiggers. Te gts the peormance of the pala in, your tok
BULLISH DOJI STAR
“This wotern appear in a downtvend and warns that the trend wil change. It consist af a black candlestick and
23 Daj with a downwar g2p at the cparing. when tha Dei icin te form of an Umbrals tre cttern i called
pullsh Oragenly Dai, and in enor of an Inverted Urbralle its called “lish Graveslone Day? Here, all
there pelierne ar eubsumed, under the name: “Bullsh Daj Slr, regerdles ofthe shape ofthe Do
Recognition Criteria
2. The marks is eharactarzed by 3 prevalina downtrend.
3. Then we ee @ Dion the second day het gaps down.
Pattern Requirements and Flexability
‘The Bulich Doi Star should stat witha normal e long ack candlestick, 1t must continue wth a Soi aaasing
dove.
‘Trader's Behavior
‘The market is in a domnvend and a song black candlestick further confirms it. Te next day opens lower with
2 gap down, andthe Wading isin 2 small range. The day closes a the opening pice causing te formation ofa
(bop. dears were in eotrl during the dovmtrens but now m ensnge is implied by the eppearonce oF m Do Stn
Favorable forthe continuation of bear markat.
pbuy/ stop Loss Levels
‘The confrmation levels defined ns te midpoine ofthe aap between the Defi and the previous candlestick.
Prees should ass nove this level fr snnrmation
‘The stp loss levels defined as the lomar ofthe lst two lon. Following the BU; prices go dawn instead of
going us, and close or make two consecutive daly lows Below the stop loss level, wile ro bearish pattern is
Aetected, thon the stop loss x tggeres ‘Soa Sam Se peg’ Sent Saisie and
BULLISH DOWNSIDE GAP TWO RABBITS
Definition
‘This is thres-condestick bulish reversal patte~. The gap between the white boty ofthe second ay ond the
represent he rabbits ready to jump out oftheir burro.
1. The market is chareconze by » prevailing dountrend
2. normal o ong black eandlesticenppears onthe Rr
5. Tha second day isa short white candlestick that gaps down
4 onthe last day anather white candlestick appeare that opens ator below the open, and then doses above
the clos of he previous dy, but tl below the soe of the frst coy
Patter Requirements and Flebi
v
‘The Cownsice Gap Two Rabbits should start with 2 normal o long black body. & short white body characterized
bby a dannside boty gap flows. The third day is another white body that engulfs the second day. The tied day
may open ator blow the open of he second day. The third day should cose below the Body imis ofthe frst
Any, lnving the gap crened betneen the fist and the secnd dye sil uid
Trader's Behavior
2 dowrtrend has been in place, and the Black candlestick add tothe bearishness that is already present. The
felloning coy opens lower wth ® gop down. Prees rise 2 litle bt, and a short wnte canst is observed.
‘The bears ate no larmed by tha dey, Seenure even tough a white body appear, prices fil i> close above
the dose of the previous day. The third day apene at or below the open of the second day, but it rales
‘throughout the cay and closes above the previous cose. The two consecutive white bodies show that the
Buy/Stop Loss Levels
“The confirmation lvelie defined ae the last dose, Prices should cope above the lvel for confirmation,
cor make tr consecutive daly low below the atop las level, hile no bears atten i detected, then the
‘op loss is biggerec. Sistine the bl blond your soa roe te there and
HES Te Te Sieg dehy 3 hp
BULLISH ENGULFING
‘This pattern is characterized by a large white body engulfing a preceding smaller black body, which appears
uring @ downtrend. The white body does not necessary ergut the shadows of the Hack body but totaly
‘nail the body tse. This an portant bottom reversa) sgn
1. The market is characterized by @prevating demrtrend
2. black bad iscbserved onthe frst day
53, The whe body thats formes on the second day comltelyenguls the bck body ofthe preceding coy
Pattern Requirements and Flexibility
“The lath ofthe firs black candlestick in BlishEnguling isnot important can ven be Dai However the
second one has tobe 2 rorral or long white candlestick. Ether the body tops or the body batioms of the tre
candlesticks may bo at the same love, But in any o2sa, ths white Body chould be longer than the previous
isc bod
‘Trader's Behavior
While the marke ix characierznd by # domnirend, war volume of sling is cbserved wih the eccurence of =
blackbody on te frat day. the nex day, the market pars at new lous. It oaks as there's gong = be more
Desrsh tring, however the dountrend loses momennim an the bllsfoxe the lend during the doy. The
buying pressure overcomes seling and finaly the market ozes above the open ofthe previous dey. The
downtrend is damaged
Buy/ Stop Loss Levels
‘The confirmation evelis defines ae te Inet lose. Prices should cross above tis ove for confirmation
‘The stop oss levels detined 25 the last low. Following the BUY if prices go down instead of gong up, and close
cr maks two concceutve daly lons Below the stop les level, while no bearish stern is detected, then the
‘Sop loss is triggered. (55 Stout tm peters svength and rebrand help
{ove yur buying secaons
BULLISH HAMMER
Definition
‘his pater occurs ot the feftom of a tend oF dunng m dovtrend and ii called a Hammer since is
or very pear the top afte daly trading range.
1. The market is characterized by» prevaing downtrend,
2. small body atthe unper end f the trading range fs observed. The color ofthe bos is ret important.
3. The lower shadow of this candlstce a at last twice at long 28 the body
4. There i (aimeet) no urper enacow
Pattern Requirements and Flexibility
‘The bocy of te Hemmer should be sm The lower sredow should be a east race as long es the body, but
rot shorter than an average candlestick. I is desired that there is no. 2 very tay upper shadow. The battom
of the Hammers body should be lower than bath of the two preceding black candies,
‘Tenier’s Behavior
‘The ules Hamer oppearsin a downed and it sels off sharply fllouing the market open. After the decine
ceases, bie market almst returns to the hgh of the day. Apparety the market fais to cortnue on te seling
Side. This observation reduces the previous bearish sentiment eausin shor traders to feel increasinaly uneasy
Ten ter Beare postions. (Fthe bedy ofthe Hammer is te, tren the suntan looks even better for the
suy/stop Loss tovels
‘The confirmation level is defined as the top of the Hammer's body. Prices should cross above tis level for
‘The stop loss levels defined 26 the last om. Following the BLY if prices go down instead of going up, and close
or make two consecutive daly lews below tha stop les love, whi ro bearish pater ie dersctad, then the Sekatash BOSE oo, Res mat oeene
Serge eigris omng te chara, The wll ge you a
BULLISH HARAMI CROSS
Detinition
“This is @ major bullsh reversal pattern, which ie even more signficent than a regular Bullsh Haram. The
outing again looks Uke a pregnant woman, a with the Bullsh Karam attem. However, now the baby is # Oo
Bascaly the pattern is characterized by 9 back hody flowed by ® Day! hats completely isi the range oF
the pase bins boy
1 The market is characterized by 2 prevaing domnvend
2: black body is observed onthe ire day.
4, The Dos tnt s formed onthe secans cay is completely engutes by the body ofthe frst cay
Pattern Requirements and Flexibility
“The Bush Haram Cross consis of two candlesticks, in which the body of the first bl
the boty ofthe flowing Dol The body of te fret candlestick may be shor.
candlestick engull
Trader's Behavior
body, nhich further supports Beerahess Hownver the next day, prices open higher then the close, or the
cose ofthe preceding day The shor tradacs are alarmed whch leads eo ths coverng of many short poston,
Causing th pies 1 ris furthe Moreover the day clos at the opening ace, showing lack af éeceion among
lreders The increasing level of indecsion ard uncertainty amaiies the lkalhoad of « tend change end cause
Buy/Stop Loss Levels
nthe Sulch Haram’ Croce pattern the frst candlestick can be shor. This causee the confirmation level to
change with respec tothe body length of the first candietks
1 if the firs black body is shen, then the confirmation level willbe defined as the body sop of the fre
canalesics,
2 the fit black body is not shor, then the confirmation level wil the lat cloee or the midpoint ofthe ble
body ofthe firs eandlestck, whichever is hicher.
ene es aE Ree reenact
“The stop loss levels defied as he lower ofthe int to owns Flowing the BUY, prices go down intend of
g0ina up, and cose or make two conseorbve daly lows below the stop less level, while no Bearish pattern is
detected, tha the stop loss i Wiggered eS ee
Seiten ts RENT oer Beg
BULLISH HARAM
‘This patem consist of a black body and a small white body that ia completly inside the range ofthe back
body. if an outine is drawn for he pater, looks like 2 pregnant woman, This isnot a canecence. “Haram
‘Fan ale Japanese word forpregnan”. The Hack candlestick is "the moter and the small candles the
baby
Recognition Criteria
1. The marks is characterized by 3 prevaina downtrand.
2. black body is observed onthe ts doy
5. The white body that is formed on the second day is completely engulfed by the diy ofthe Fest dy
Pattern Requirements and Fexabilty
‘The pattem consists of two canclestics, in which the fist day's black candlestick enaults the following day's
hint eanclestice. The frst one has tbe 2 nermal or long back condestick, Ether the body tops or the Body
smaller than the previous lack bod.
Trader's behavior
“The lish Harami is sgn of dispary inthe market's henlt. The market is charactenzed by a downtrend
nd 2 benny mood, and there fs nenvy sellng refed by n Dine body, which hither suopers the
bearshness. However, the next day prices open higher or atthe close ofthe preceding day and the shor.
"raders are alarmed. This loads 10 the covering of many short positions, caucing the price to rise further The
Iatecomers svor the trend they missed the frst tme, and sow down tre ge. This, 9 small white body's
formed. This rey signal a trend reversel nce the second day's small rel body shone thatthe bearish power
is diminishing
Buy/Stop Loss Levels
‘The confirmation level is defines asthe last cose or the midpoint of the frst black body, whichever is higher.
Pres should cross above th eve for confirmation.
‘The stop los level is defined as the loner ofthe lst two lon Flloning the BU prices go down instead of
‘20>g up, and close or make tno consecutive daily lows below te stop los level, while no bearish patterns
Eetected, then the stop loses tigers Sistine the able belom: Find your siozx rorkel there and
Seaham it ori among the hers The wit gre you an
Eas Beha’ gad aki 5 hp
BULLISH HOMING PIGEON
Definition
‘This pater is a small black bedy contained by a pri relatively Long blak body. te resembles the Here
petiern, exceat tht both bots er Back
Recognition Criteria
2. The marke is characterized bya provaing dowrtrend.
2. Baccbody is observed on he frat day
3. Onthe seca day, we apnin see lack body which is completely engulfed bythe body of the First dey
Pattern Requirements and Flexibility
‘The Bulich Homing Figson consicts of two black candlasticks, in which the fret days black body enauife the
Fey eB he carlos ry bee te rie bitctonet He coor ec bengoe tocar
ay shouldbe smaller than the Fc.
reflected by the black body oF the frst day. However, smaller boy that appeers on the second dey pots to
‘he ciminched cower and erthusiacm ofthe slrs thus suggesting 3 trend rovers
Buy/ Stop Loss Levels
higher Prams should eons above this lee! for cnfimaton :
“The erp lose levels defined 28the lower ofthe inet two lous, Following the BUY, prices go down inetend of
ng up, and close or male tua eorancutive dai los below the stop lors level, hie no bearish patter
Aexoced, than the top loss triggered BULLISH INVERTED HAMMER.
‘his patsm coreiae of 2 black body followed by an inverted Hammar thst is characterized by 3 Iona sper
‘hadow and 3 emall body. Itc eimiar in chaps toe Search Shoosng Star but unlike the Shooting Sar the
Inverted Harmer appear in donmicend and signa @ bali reversal
1. The marke is charactorzed by a proving dowrtrend.
2. The fet day ofthe patem isa black candlestick.
23. Onthe second dey, «smal body atthe lamer end ofthe trading range i observed. Color of his body is al
4: The upger shadow of this eecond candlestick shouldbe st leat tvice ac long asthe bo
5. There is (amos) no loner shod.
Pattern Requirements and Flexibility
‘The body ofthe Inverted Hammer should be smal. The upper shadow shouldbe ot lees buice az long a5
body tut not stoner than an averace candlestick lenath. Ic dacved thet thars ic no oF 2 very tiny lowar
shadow. the bottom ofthe inverted hemimer should be lover thon se prececng cand estik’s body
‘Trader's Behavior
‘The pattern caus in a bearish background ard the back candlestick thet appears on the Fist day farther
uppons the bearisnness. on ts second day, in which an Inverted Hammer is een, market cpene at or near
its lom, Then prose change diction and wa ses 2 raly. However, the bulls do not euceeed in eustining the
rally uring the rest of the day and pres Fly close win tor near the lo oF the day. may not be cleat
lahy this type of price acion is interpreted as a potential reversal signa. The answer has to do with whet
happens over the next day. Ifthe nest day opens above the body ofthe Inverted Hammer means that those
“iho shorts at the opening or coang of te Invertes Hammer day ae losing mney. Tne lange” the market
holds above the Inverted Hammer's body, the more Healy these shorts wil atemgt t cover their postions
‘This may ante 2 aly asa result of covered short postions, whieh may then inspire te betom pickers to tke
Jona postions
Buy/Stop Loss Levels
“The confirmation level is defined ae the midpoint of the uoper shadow ofthe inverted hammet Prices shoule
cross above tis level for confirmation
going up, and cose oF make two consecutive dally lows below the stop loss level, while no bearish pattem is
Getected, then the stop loos fs thegarad Teteeveimn les cure citer Sect eens
BULLISH KICKING
Definition
“his poten consists frst of black aruboeu and ten a stiteMamubor, Aer the bine Huber, the
market opens above te sri sessions opering, forming a gap between the two candlesticks
4. The marketie characterized by @prevaling dovmtrend
2 onthe frst day a back Marubo (ora black candles ie obearvec.
3. Then we ee a wnte Marsbozu (ora white candlestick) onthe second doy
4 The second day opens higher witha body ge
Pattern Requirements and Flexibility
“ne Buh Kicking idealy should consi of a black Warubozu then a white Marubezu with a body gap in
bbeniesn. However we aesepe normal or leng candlesticks and a null body g2p,t00. Thi wy, the Bulien
Separating Lines Patarn, uhch is = continuation ptieen (hat is rot covered here, ie ako included in =
Imadiied manner as 2 reversal pattem.
‘Trader's Behavior
‘he pattern i actrana sign showing thatthe market is headed upwards, (t appears ina dowrersnd and on the
Fest dey @ rong black candles (or black erubozu) further confirms ne bearichness The nextday prices
fpr or above the previous day's open, causing » gop. This huge gap urges the bulls to lake action. The
rmarkst heads up forming whi candles (or 2 white Maruten)
Buys stop Loss Levels
‘The confirmation evel is defines as the Ins close, Prices should crass above this eve or confematon.
“The stop loss level is defined asthe last low. Following the BUY if ore8s go dawn instead of ovina uo, and dose
cor make two coneceutve dally lows bslew the sp lse level, whila no Bearish pater ic detecad, than the ice snout the peters scons and mlabey and help
Yin your boying Secor.
BULLISH LADDER BOTTOM
Definition
‘his ie 9 Ave condiessck pattem that starts wih three trang bine candlesticks. The dowrtrene etnues yt
‘may imply a bulish reversal.
Recognition Criteria
1. The market is characonzed by 2 prevaling domtrend
3. The fourth Back candlestick closes alo loner but has along upoer shadow
4.-Tha ith cay ea ona white wh an open above the previous days body.
Pattern Requirements and Flexibility
‘The first three days of the Bulish Ladder Bottom are strong black candlesticks wth consecitive lower opens
and loner doses. The fourth day is a shor black candiesck, but it opens higher and wades higher, leaving =
Tona uacer shadow, then closes making 2 naw low. The ith day isa strong white anclesic that makes 2
body gop wth the Four doy
“Trader's Behavior
“There is @ considerable omntrend for some te and the beare are hapoy. Then we see a good downward
move. Prices stat trading above the opening price and almost reaching tothe new high a the previous day,
butthen they lose ne another neve low. Thi aston fs 2 ovaming for shorts eling them thatthe mre wil ot
postions on the nextday f profs are good. This ati the reason Dehind the upeard gap we exe on the last
ay of the patern and also the close is considerably higher If tha volume ig high on the last cay, 2 rend
Buy/Stop Loss Levels
‘The confirmation level ie defined asthe lest clos, Prices chould ease above this level for confirmation.
‘The stop loss level is defined asthe lst low. Flowing the BUY; prices go down insted of poing up, and close
for make tr consecutive daly lowe below the sap las level, le no bearish etter detected, then the
sto losis wigaered. SoS ROG ir SEN od at So ba
BULLISH MATCHING LOW
esto bes bee eel ina She peas es tal there few tech, SAS
indicasve ofa good eunser: pice.
Recognition Criteria
1. The market ie choractenzed by prevoling dowmtrens
3. The second day fllons with another black candlstck whose closing price is exactly equal to the dosing
rice of ha rst day.
Pattern Requirements and Flexibility
‘The Buloh Matching Low consists of two block candlesticks. The length ofthe fst canes shouldbe no-ms|
cor long. Both candlesticks should cose atthe same level
Trader's Behavior
‘The market hap been lawar 3e evidenced by ancther strong back day. The nextday open higher and trade sil
higher ond then ie coses atthe same price. The i indicative of shor term suppor and wil enuse mich
concen wth the Sears. What reflects the poychology af the market is not necessary the dell trading ection
but with the fact that both days dase atthe same evel
Buy/Stop Loss Levels
‘The confirmation lvele defined 3 the midooine ofthe ist black body. Price chould erase above this level for
‘The stop los level ic dfinad ac he lower of the Inc two lone. Fllowng the ui cee co down inctsad of
01g v, and ccs0 or make tao conseostve daly lows below the ep lees level, wile ne bearsh pan i
ten Hatha tegen ates ‘Rieti the lable Bolom Find your stock marco! there end
SeeTee sR aon the eT ge oso
BULLISH MEETING LINE
Definition
‘This patern occurs during @ downtrend, The Frat day's Hack candlestick is fellowes by © hte candlestick thet
opens shar lower an slocerat tie seme level er the par eesron's doce. [riz smler tothe Paring Line
attr. However, the amount she escond day rebounds is diferent. The Pering Line's eecond day closes
above the micpoine oF he rst day's boay, whe the second day the Eullsh Meeting Line cleses the same os the
{iat day. Coneequerly the Perang Line sa more rgnican bottom reversal. Nonetheler, the Bullzh Weeting
Une deserves due reapect 2° wll
1. The markets choractenzed by» prevoiing downtrend
2. On the fires day « back candectice x obaerved
5. Then, me se a white candlestick on the second day
44 The closing prices are tne some or ales the same on both avs
attern Requirements and Flexibility
“The Slsh Meeting Line const of tuo candlesticks, rt blac candlestick then white candles; both not
shor. The dosing ces of both days shouldbe the same or almost the same.
“The occurence of this pattem reflects 9 smlemnte between bulis ond bears. The market i in 2 downtrend
when a strong blak candles formed, which further supports the end, The nest day opens sharply oer
aising the bears to fea! more confent. Then the bulls start = counterattack pushing pices up and leading (2
a dose equal (or very clese to) the previous dose. The downtrendis now breaches.
“The exiredion lel ihn ti es ies Shem come ove i eve enone
‘The stop loss levels defined as the last ow. Flowing the BUY, if peas ge down instoad of poing up, and dose
or make two consecutive daly lows below the sop loss level, nile no Bearish patter I detected, then the
Bop lees ie iggered Te gts the pevormarce of the pall in your sk
BULLISH MORNING DOJI STAR
‘This ie a tres candlestick pattern signaling a msjor bottom reversal ft ie composed of a black condlstick
followed by 2 Goi, which chareceristically gaos down to form a Doli Stat Then, we have a third white
candestick whose closing is well into the fst sesons lack real boc. hs ts = distinctive bottom pattern.
1. The market is characterized by a prevaling dowrtrend
2 we one a black canclesti onthe fret day,
3, Then, we see 8 Dayion the second day thst gps nthe direction of te dowrtren
{£ A whe cadet is cberved on the thi dey.
Pattern Requirements and Flexabilty
“The Bulish Morsing Ooi Star stars with a black candlestick and it ehould continue with doi that causes @ gap
‘opening lower than the close ofthe fst day: The third day of the pattern a white candlestick, wich has the
seme or higher opening price with the Boj, ad ieshoult cle well ina he black candles that apeeers
‘he bacinina of the pttzn. The extant of how high tis endless must doce ic dafind accorcing to the
comer candlesticks belonaing tthe patsr The thie day‘ closing must raach the midpain Between the frst
{sca eerie ays bet le
‘Trader's Behavior
‘Adounerend is alcady established and the black candles confirms the continuation ofthe dawntrend. The
azcearance of se Ooj that causes 3 aap indister that bears are ssl pusing down the price. However thie
{ight pre ection between the open andthe lose shows indecion ax wel On the thd day, toe body ofthe
Candlestick ir ebove the prewour dey, trying to cover some af the ground from the donn day. & igniieart,
‘rend reverel has occured
Buy/Stop Lows Levels
‘The confirmation level is defined as the lest close. Prces should cross above this level for confirmation
‘he stop lose levels defined 25 the lower ofthe last two lows. Following the BUY if pices co down inetd of
{819 up, and cose oF make two conseeitve diy lous below the snp less leva, while no beareh pater
detected, then the stop loss is thegered. Sechange in Boe content _of other tock markets pieese
Ecotine web blow thou" sence ter ond
So Sas te pi ang’ nd city 20 help
BULLISH MORNING STAR
“This is a threc-candlestick pattern signaling a major bottom reversal. I is composed of a black candlestick
followed by a shore candlestick, which characerstially gaps down to form a Stat Then we have 2 third white
candlestick whose clesing fs well int the frst sessons lack body. Ths fe» memningfl bottom pater,
4. The markatie characterized by @ prevaiing donntrend
2. we ees a black canclesticc onthe fst day
3. Then, we see» short candlestick onthe second cay that gaps inthe direction ofthe dowrtrend.
Pattern Requiremonts and Flexibility
“The Bush Morning tar stare witha back candlestick and it should continue with a shor candlstick (white oF
isco that opens witha cap down. The white candlestick appearing onthe thiré day should open ator higher
thon the lowes level ofthe body ofthe second candlestick, and should cose well int the bine exnestick
that appears at the beginning of the patie. The exent of how high this candlestick must cose is defined
according tothe other eandlaticks belorcing to the pattern. The thied days dosing must reach the midpoint,
bbetneen the frst day's opening and the second day's lowest bey level
Teaider’s Behavior
‘A dounurend is in progress and the black candlestick confims the contimaton of the dawneend. The
appearance ofthe short candlestick that causes 2 gap indicatas that bears are stl pushing down the pics
However the tight price action on the second day between the open and the close shows indecision, The id
sBuy/stop Loss Levels
“The confrmation levels defined ae the last clos. Pris should cross above this level fr confirmation.
‘The stop loss levelis defined asthe lower of he inst to lows. Following the BUY, # pnoes ge down insted ot
g2ing up, and cose or make two consecutive dally lows below the inp loss level, while no beaish pate is
detected, thon the stop losis wiegered. BULLISH ONE WHITE SOLDIER
‘This patem appears in » cowrtrend and consists of 9 black candlestick and 9 white condestck in hich the
late conslessck oners avove the arecedng day's cose nnd doses above ts open, The pattem looks sin to
{he Bullsh Haram pattern. The only iference is that the second day doses higher which stops the engulfing
ofthe white body by the areceding lack beds.
Recognition Criteria
1, The markets characterizes by 9 prevaing dowrtrend.
2. bia body is cbeerved on the frat day
5: The white body that fe formed on the eecord day oper higher than te fist day clase and cloves higher
‘onthe fist day's open
Pattern Requirements and Flexibility
‘The Bilish One Whie Sailer consists of a black candlstics followed by 2 white candlestick. The length ofthe
candlescks should rot be shor. The second day opens above the dase of te preceding day and the close
reeeee above the opening pice of te ft day
“Tears Behavior
‘A dountrend isin progres and the strong bck candlestide seen onthe Fret dey increases the bearishress
Uae already present. Ae the record dey opens higher than tie clue, the ahort traders are alarmed. Prone
‘ice to the poirt where tte close crosess eve the previous cave opsrina. The cowrtrand ie damages. 1f
Drees keep on ning on the follwing days, a major trend reversal takes place.
uy/Stop Loss Levels
“The confirmation level is defned as the lest lone, Prces should cross above this level for confirmation.
‘The cep loos lyse defined 25 the act ow. Following the 5 ifpricse go down instead of going up» and close
cr make two consecutive daly Ions below the stp loss level, while no bearish paler i detected, ther the
Sop lowes triggered SONS RLS: Sasa See at eo 4B
BULLISH PIERCING LINE
‘his ig 2 bottom ravercal pater with ewe candlasicks. A black candlesce appears on the first day whis a
downtrend isn progress. The second day opens st > nev low, with n gap down and eoses more shan halny
into the prior Hack bay, leading tothe formation of a attong whee candlestce
4. The market is characrrizad by 2 pravalina downtand.
2. black canelocti appears onthe Frey.
3. white eanlestie opens onthe second day witha gep dows and clases mare than hlfnay ink the body of
the fest day.
4. The second day Faller close above the body of he fre: day.
Pattern Requirements and Flexibility
“The Fist day ofthe lish Percing Line patter is @retmal or long Hack candlestick. The second dy should
open well Below the case ofthe fst day and dose mare than alway ito he prior black candlesticks body.
ewsver ce close ofthe second day must say inside the becy of th Firs day.
“Tenier’s Behan
“The market moves in a donntrend. The fist back body ceinforces ths view. The nest day the market opera
loner via © ep) eioning that the bearchneas sill perrate Aer thievery beach open, bull decide to take
the lead. The marist surces toward the clece, prices start to go up resulting ina close way above the pravious
fny’s cose. Now the Bears ae losing tein confidence and are reevolinting thir shor postions. The potential
buyers start thinking that new lowe may not hold and perhape die te to ake long postions.
Buy/Stop Loss Levels
“The confirmation level ie defined 2 the let cee, Prices should eroee above thie level for confirmation,
“The stop las level defied athe lat ow Felling the BLY prices go down instead af going up, ar close
‘or make twa consecutive daily lows below the stop loss level, while no bearsh pattern is detected, then the
‘Sop loss is iggerec. Sechange in The contest of other ‘tos markets” piesa
Ersine bi ile Below rnd sock mote ete oe
BULLISH SQUEEZE ALERT
‘This io @ thveday bulich reversal sate, tt was developed because of the frequent event where ricos ean
break tothe uside fllowing thc patarn, cepecslly ifthe pattem Is preceded by a ctrong downside move,
1 The markets choractenzed by prevaiing downer
2.4 black candlestick appears onthe fist day.
5 The second and third dave each have lower highe and higher lomo than the previous day. Ther colar ie not
Important.
4 The size of the bots ofthe three days da not mie:
Pattern Requirements and Flexibility
‘The fist condlestick should be 2 black candesice The ether two candlsicks can be of any color and lnath
but they should have ‘ower highs and higher lows consecunvey
“Tender’s Behavior
hat is important about the Bulish Squeeze Alert ix thatthe dowrtrend has sale and some base or stability
hae fray ernved.
Buy/Stop Loss Levels
‘The confirmation lol ip defined ae the bedy sop of the last dav. Prices chould cross above tis lava for
‘The stop los level io dared ac the loner ofthe lat two fons Fllowng the SUX, if prces go oven intead of
coin ub, and clese or maka two concecstve dally lowe below the ston les level, while no bearish pata ic
Setected, then the stop ons i eiggeres Sietinas in tha tonto ot omer “ose mance please
‘Gea Sbout tne pation’ svenatn end veliaotity ent ela
you inyour Buying deren
BULLISH STICK SANDWICH
losing of th black candlesticks a the same level shows that a support price hes been established
Recognition Criteria
4. The market ie character2ad by a provalin dammvend,
2, We see a slack condlestie onthe tet doy
2.A whe body thet redex above the cose ofthe previous black body fellows
4: The third day i a lack day with 2 dose eaual to the Ft day.
Pattern Requirements and Flexibility
“he Buen Stick Sondinch starts wth a song bck cansestice, and a whte candlestick that opens at the
third dey opens with an upside gop but closes exactly atthe same lal with the fat day's close,
‘Trader's Behavior
“he market is testing new lows and it proses » bck éay, The following day unexsectesiy opens higher and
then tmces higher al day; cosng ator rene ts high Ths Acton supgest thot the cowntrens hs reversed and
that short tradere should be careful The next day, orcas onen even higher, hich should cause tome shor.
covering intial, bt then press dit lower to doce at the same price ab two dave avo. Wadare take note of
the support pies implied by tre two same evel closes.
Buy/Stop Loss Levela
“The confimaton lave is defined asthe midpoint between the last two closes. Prices should cross above tis
level for confirmation,
going up and cose or make two consecutive dally lows below the ion lass level, while no bearish pattem is
oceced, than the eta loss is winger Ste how i rarka emong the others. This wil give you an
Soa Souk Be pers Senate ah
BULLISH STOP LOSS
Definition
‘This i not standard canclestick pater. 1 i simpy the top les compliment ofall the confirmed bearish
patterns. The condiens forthe acavaion ofthe Bulih stop loss are two consecutive highs or 2 dase above
‘the stop loss lev! ofa recently confirmed tearsh paern,
1A bearish pair deecin and its confirmation ar top las levels re eles,
2. The gaiem the, is confimed and 2 SEUL or SHORT signals esued.
5: ries ether cose once above the stp les lav, oF tet highe abovs the sap loc evel in tuo consecutive
ays,
4 The Bulich top lor ic triggere
Patter Requirements and Flobilty
‘llbearch canclastcks ars accompanied by a sascfc ton las level which becomes active when the pam
'e confmec. A bearish confirmation cancaquertly may lead to 3 baarich signal such as 2 SeuL or SHORT
sgrel:Foloning the beensh signal, i prices go up intend of going down, and cose or make two cansecitive
daly fghs sbove the stop los evel, while no bush paltern detected, then the stop las is tragered. Once
‘ggered, the step lose level ofthe recently confirmed Bearish astern starts acting a the confirmation lave cf
2 bullsh pate fsck. The system then seeks 9 bulishconfrmatvon to issve 9 SUY sgn. Paces must eros
shove the sto ler Invel fr the bulizh confirmation ofthe biggered top lez
trader's Behavior
In the chaote environment of the soc marke, tie hard to dsm that al bearieh ete wil be auscessfl Host
earch bets bseed on confirmed candles pattems wil be roftable though. However some cancer
Patlerns ey led t ele trades, some of tich ere bear traps. This sxncly wines the wap loss cores nis
the picture It gerves 20 2 safety valve forthe bears cating the potertialy devastating loses to @ minimum
leva. According to the satis, the trades based on the Bui stop loss confirmations ara as cuccassfl 26
‘he other candlestick pattem based signs. It consmes, they shouls never be averdes
suy/Stop Loss Levels
‘The confirmation level ie defined the stop loss lave of the recently confimed bearish candlestick pattem
Pricasehould erase above this leva for confirmation of hs Buch xo los. See how te tonke arvong tre otberar This wll give vou on
‘Bee Slt pts stern sd stay a help
BULLISH THREE GAP DOWNS:
Definition
“The ic four dey bulish eeveeal pater. (tconccts of three concecutive daye asch gapsing loner on the
open. Her Three Gap Cowns the mart becomes extremely oversold and feady for the reversal of the
current dveiren
The rt day can be of ny col
2. Te second day alco can be of any colar so long as ts body gaps down away from the fist day's bey,
53. the lac wo dave are blac and their botias must aap down from the batiee ofthe pier days.
Pattern Requirements and Flexibility
‘There must be downside body gaps between the canesticks,
“ador’s Behavior
“The marke is oversold with three gaps down ia 2 row and itis ime to cover chart postions.
Buy/Stop Lows Levels
‘The confrmtin level's defined asthe midpoint ofthe let Hack body: Prices should crass above tis lve! for
Eicon
“he stop loss level is defined asthe lower ofthe ist two lous, Following the BUY, prices go down instead of
{g2mna up, and cise or make two consecutive daly ls below the stop loss levl, while no teansh pater is
detected, than the stop loss is Wiggered. SSSTTEE gree song the others, Tl gee you an
BULLISH THREE INSIDE UP
“his is 2 confirmed Bult
ori pater. The frat two cand
dhe third day represent bullch confirmation.
ke ere exactly the seme ax the Bullish
Recognition Criteria
1. The mares ie characarzed by 2 prevaiina downtand,
2. Wie ee a Bullish Harem (ara Haremi Cros) pattern nthe fist wo days,
5 Then, ue ae white candlestick onthe third day with @ hisher ce then the second day.
Pattern Requirements and Flexibility
1 Bullish Haram (or Harari Cross) pate chould be identiied wih all previously eat rules. The third day
‘Trader's Behavior
‘The second day of the Bush Three Inside Up signals @ trend reversal since the second day's small body (ar
Dol) already chowed thatthe bearh aower wae diminishing. The third day confirms this fac, but ail 3 further
confirmations reauired for bullsh versa,
suy/Stop Loss Levels
“The confirmation level ie defined a the last dose, Prices should cross above thie lavel for confirmation,
‘The sto loos level defines asthe ins ow Felling the BUY, pnces 99 down instend of going up, ond cose
or mate too consecutive diy lees below the atop fons level, hile no bearh pattern i detected, then the
stop lose is wiageres Sache bes Sant ot tbe ar vats ieee
Serer ie tk tie Gt out ek mentee
Sree ign osieng bre ote, The ave you an
BULLISH THREE OUTSIDE UP
Definition
‘This is @ confirmed Bulch engulfing patan. The fst two candlesticks are exaclly the same as the Sullsh
quling pattern and te tie day coacacents ts contrat,
4. The markets characterzed by a prevaing dowrtren,
2 We os « Bulls Enguling pattern inthe st two days
5. Then, we see a white canclestic onthe thied day with higher close than the second day.
alter Requirements and Flexibility
‘A bulish engulfing pater shouldbe dented with all previously set ules. The third day shouldbe 2 white dy
with a higher cose.
‘Trader's Behavior
“The fist two days of the Bullsh Three Outside Uo is simaly 2 Bullch Enauifing Pater, andthe thied day
confirms tat the downtrend is damaced as cuggestsd ty this ater, cine itis a white candlestick dosing wih
confertie . "
‘Buys stop Loss Levels
“The confirmation levels defined ae the last close. rio should croge above this lavel for confirmation,
or make two consecutive daly ows below the stp iss level, while no bearish pattern i detected, then the
sop loess teoge FS Scie aetane oy Re Gee
Tooye fig nso ote ack es paase
‘ea ‘Stout tha pater strength snd rolabiley so helo
‘BULLISH THREE STARS IN THE SOUTH
Definition
‘his patem consist of thras concccutive black candlesticks which have consecutively lower closse and hicher
lone na sion detaaratina dountrend
2. blac candlestick with almost no uaper shadow and along lower shadow appears on the frst day.
53. The nai day i ancthr biace candlestick closing balow the previous day's close and having an cpening in
41 The last dey fr 2 smal Mock Maruboru mith» higher low
Pattern Requirements and Flexibility
“The Fc candestic shouldbe a nrmal or lon black candlestick wth along lower shadon. The falling black
candlestick must open within se range of tre previous ny’ body, and close below the previous do's lose
‘The bodies ofthe tree block carditis and th-lower shadows should get short,
‘rad
chavior
“The Bullsh Three Stars in the South reflects 2 slomly deteriorating downtrend, which is characsized by
iminsting doly pre ranges and consecutvely higher lous. Buying enensinsm i elected bythe long lower
fhadow of re Art day. The next day opens at 9 higher leve, nace lower ut ts Iw not lower thon te
previous day's on. This sacand day also doses off its low. Then we see @ small Black Maruboay, whieh i
feraulfed by the previcue days ranas on th third day. Higher lows