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Candlestick Patterns Dictionary

Discussion in 'Candlestick Patterns' started by Sam, Sep 20, 2015.

  1. Sam

    Sam Forum Member

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    Abandoned Baby - a reversal pattern characterized by a gap followed by a Doji, which is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third candle.



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    Dark Cloud Cover - a bearish reversal pattern that continues the uptrend with a long blue body. The next candle opens at a new high then closes below the midpoint of the body of the first candle. The pattern is more signficant if the second candle's body is below the center of the previous body. The pattern is casting a “dark cloud” over the bullish trend that preceded it. Confirmation of the pattern is achieved when another red candle, of smaller size, forms after the second candle.



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    Doji - type of candlestick and a warning sign of a pending reversal. The lack of a real body conveys a sense of indecision or tug-of-war between buyers and sellers and the balance of power may be shifting. The open and close are pretty much equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign.



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    Downside Tasuki Gap - a continuation pattern with a long, red body followed by another red body that has gapped below the first one. The third candle is blue and opens within the body of the second candle, then closes in the gap between the first two candles, but does not close the gap.



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    Dragonfly Doji - a doji where it opens and closes at or near its high. The candle ends up with a tall lower shadow and no body. It is usually seen at the bottom of a move. More bullish than a hammer.



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    Engulfing Pattern - a reversal pattern that can be bearish or bullish depending upon whether it appears at the end of an uptrend (bearish engulfing pattern) or downtrend (bullish engulfing pattern). The first candle is characterized by a small body, followed by a candle whose body completely engulfs the previous candle's body.



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    Evening Doji Star - a three candle bearish reversal pattern similar to the Evening Star. The uptrend continues with a large blue body. The next candle opens higher, trades in a small range, then closes at its open (Doji). The next candle closes below the midpoint of the body of the first candle.



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    Evening Star - a bearish reversal pattern that continues an uptrend with a long blue body candle followed by a gapped up small body candle, then a down close with the close below the midpoint of the first candle.



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    Falling Three Methods - a bearish continuation pattern. A long red body is followed by three small body candles, each fully contained within the range of the high and low of the first candle. The fifth candle closes at a new low.



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    Gravestone Doji - a doji candle that opens and closes at or near its low. The candle ends up having a long upper shadow and no body. It is usually seen at the end of an uptrend. This pattern is more bearish than a shooting star.



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    Hammer - hammer candlesticks form when prices moves significantly lower after the open, but rallies to close well above the intracandle low. The resulting candlestick looks like a square lollipop with a long stick. A hammer indicates that the market may be attempting to find a bottom, and that buyers are strengthening their position. If this candlestick occurs after a significant uptrend, then it is called a Hanging Man. The body can be clear or filled in.



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    Hanging Man - hanging man candlesticks form when the price moves significantly lower after the open, but rallies to close well above the intracandle low. The resulting candlestick looks like a square lollipop with a long stick. If this candlestick forms during a decline, then it is called a Hammer.



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    Harami - a two candle pattern that has a small body candle completely contained within the range of the previous body, and is the opposite colour. Coming after a strong trend, this pattern indicates a decrease in momentum and possibly the end of the trend.



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    Harami Cross - a reversal signal and is formed when a long candle is followed by a doji. For the pattern to be a valid harami cross, the doji should be located within the top and bottom of the first candleÂ’s body. A bullish harami cross is formed when a long red candle is followed by a doji. It appears during a downtrend and signals a reversal. A bearish harami cross, on the other hand, is formed during an uptrend and consists of a long blue candle followed by a doji.



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    Inverted Hammer - a one candle bullish reversal pattern. In a downtrend, the open is lower, then it trades higher, but closes near its open, therefore looking like an inverted lollipop.



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    Long-Legged Doji - a candlestick with a long upper and lower shadows with the Doji in the middle of the candle's trading range, clearly reflecting the indecision of traders.



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    Long Shadows - candlesticks with a long upper shadow and short lower shadow indicate that buyers dominated during the first part of the session bidding prices higher. Conversely, candlesticks with long lower shadows and short upper shadows indicate that sellers dominated during the first part of the session driving prices lower.
     
  2. Sam

    Sam Forum Member

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    Marubozu - a candlestick with no shadow extending from the body at either the open, the close or at both. The name means close-cropped or close-cut in Japanese, though other interpretations refer to it as Bald or Shaven Head.



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    Morning Doji Star - a three candle bullish reversal pattern that is very similar to the Morning Star:

    a. The first candle is in a downtrend with a long red body.
    b. The next candle opens lower with a Doji that has a small trading range.
    c. The last candle closes above the midpoint of the first candle



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    Morning Star - a bullish pattern signifying a potential bottom. A three candle bullish reversal pattern consisting of three candlesticks:

    a. A long-bodied red candle extending the current downtrend
    b. A short middle candle that gapped down on the open
    c. A long-bodied blue candle that gapped up on the open and closed above the midpoint of the body of the first candle.



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    Piercing Line - a bullish two candle reversal pattern. During a downtrend:

    a. The first candle is a long bear candle followed by a long bull candle.
    b. The bull candle opens lower than the bear's low but closes more than halfway above the middle of the bear candle's body.

    This is a warning sign for sellers since a reversal to the upside might soon occur.



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    Rising Three Methods - a bullish continuation pattern in which a long blue body is followed by three small body days, each fully contained within the range of the high and low of the first day. The fifth day closes at a new high.



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    Shooting Star - a single candle pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted Hammer except that it is bearish. A shooting star can mark a top but is often retested.



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    Short Day - a short day represents a small price move from open to close, where the length of the candle body is short.



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    Spinning Top - candlesticks that have small bodies with upper and lower shadows that exceed the length of the body. A very good reversal signal and can be any colour. Spinning tops signal indecision. The smaller the body, the less direction the market has.



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    Stars - a candlestick that gaps away from the previous candlestick is said to be in star position. Depending on the previous candlestick, the star position candlestick gaps up or down and appears isolated from previous price action.



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    Stick Sandwich - a bullish reversal pattern with two red bodies surrounding a blue body. The closing prices of the two red bodies must be equal. A support price is apparent and the opportunity for prices to reverse is quite good.



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    Three Black Crows - a bearish reversal pattern consisting of three consecutive red bodies where each candle closes near below the previous low, and opens within the body of the previous candle.



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    Three White Soldiers - a bullish reversal pattern consisting of three consecutive blue bodies, each with a higher close. Each should open within the previous body and the close should be near the high of the candle.



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    Upside Gap Two Crows - a three day bearish pattern that only happens in an uptrend. The first day is a long blue body followed by a gapped open with the small red body remaining gapped above the first day. The third day is also a red day whose body is larger than the second day and engulfs it. The close of the last day is still above the first long blue day.



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    Upside Tasuki Gap - a continuation pattern with a long blue body followed by another blue body that has gapped above the first one. The third day is red and opens within the body of the second day, then closes in the gap between the first two days, but does not close the gap.



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