72 Candlestick Patterns Quick Reference Cards Pdf

May 06, 2020  Candlesticks build patterns that predict price direction once completed. Proper color coding adds depth to this colorful technical tool, which dates back to 18th-century Japanese rice traders.

.Create your own flash cards!.Cards TermimageDefinitionBullish Harami (Reversal)1st day with high volume in the existing downtrend brings complacency to the bears.The next day trades in a small range within the previous day's real body. Light volume on the 2nd day should give rise to concern by the bears of an impending change of trend.Look for higher prices over the coming days, especially if the next day provides confirmation of a trend change by closing higher.TermimageDefinitionBullish Hammer (Reversal)As with any single candlestick, confirmation is required.The Bullish Hammer formation shows the price goes much lower than the open then closes near the opening price. This fact reduces the confidence of the bears.Ideally, a white real body Hammer with a higher open the following day could be a bullish signal for the days ahead.TermimageDefinitionPiercing Line (Reversal)The gap down on the 2nd day perpetuates the downtrend. However, the 2nd day's close is above the midpoint of the 1st day's body. This suggests to the bears that a bottom could be forming.This price action is not nearly as discernable using bar charts as it is with candlestick charts.

The more penetration of the close on the 2nd day to the 1st day's body, the more probable the reversal signal will succeed.TermimageDefinitionMorning Doji Star (Reversal)The bullishness of the doji star created on the 1st two days is confirmed with the 3rd day. TermimageDefinitionHanging ManSignify increased selling pressure rather than reversalMoves lower but rallies to close above intraday lowTermimageDefinition3 Black Crows (Reversal)Pervasive profit taking takes its toll on those who remain long. This induces a snowball selling effect in the coming days.TermimageDefinitionBearish Engulfing (Reversal)Occurs at the end of an uptrendIf not much volume occurs on the 1st day of the Bearish Engulfing formation compared to the 2nd day, then this increases the strength of the pattern. The 2nd day opens above the close of the 1st day, however quickly sells off to finally close below the open of the 1st day.This damages the spirits of the longs and brings into question the bull trend which prompts additional selling in the coming days.TermimageDefinitionBearish Harami (Reversal)A long 1st day with high volume in the existing downtrend brings complacency to the bears. The next day trades in a small range within the previous day's real body.Light volume on the 2nd day should give rise to concern by the bears of an impending change of trend.Look for higher prices over the coming days, especially if the next day provides confirmation of a trend change by closing higher.TermimageDefinitionDark Cloud Cover (Reversal)Continues uptrend with long white candlestick.NEXT day opens at new high THEN closes BELOW midpoint of of first day.This is encouraging to the bulls.

However, the 2nd day closes below the midpoint of the 1st day. Longs quickly question their strategy.TermimageDefinitionEvening Star (Reversal)Continues uptrend followed by a GAPPED UP small body.The 2nd day gaps higher, but trades in a small range. The bearishness of this indecision is confirmed by the lower close of the 3rd day. Look for lower prices. TermimageDefinitionSpinning Top (Possible Reversal)Signals IndecisionTermimageDefinitionAbandoned Baby (Bearish)Gap up on the second day encourages the bulls, however the close on the second day is nearly the same as the open on the second day.This could be a sign of temporary profit taking by the longs, however the third day reveals that the more likely scenario is indecision on the second day.Watch for additional downside price action in the next few days.TermimageDefinitionDownside Tasuki GapThe gap down on the 2nd day does not get filled by the 3rd day. This suggests that the downtrend will continue.TermimageDefinitionDownside Gap 3 MethodsThe gap down on the 2nd day gets filled by the 3rd day.

More investigation of the previous weeks is recommended in order to see if this is the first gap.If so, then this pattern is probably displaying short covering to 'close the gap' created and the bearish trend should continue.TermimageDefinitionSide By Side White Lines (Continuation)The 2nd and 3rd days are a failed attempt to rally. Shorts are basically taking profit here. The downtrend remains intact.TermimageDefinitionAdvance BlockThis formation is similar to the Bullish Three White Soldiers formation.However, the Bearish Advance Block chart alerts traders to the weakness of the upside price action since the close of the second and third days are significantly less than their highs.TermimageDefinitionBearish Falling Three Methods (Continuation)This is a formation which shows the market taking a breather before continuing it's downtrend.Notice that a new high is not seen during the 4 remaining days of this formation.

This gives little confidence to the bulls, making way for the short sellers.TermimageDefinitionBearish Falling 3 Methods (Continuation)This is a formation which shows the market taking a breather before continuing it's downtrend.Notice that a new high is not seen during the 4 remaining days of this formation. This gives little confidence to the bulls, making way for the short sellers.TermimageDefinitionBearish Breakaway (Reversal)The up trend is accelerated by a gap up. The next few days trend up, however start to run out of steam. The last day of the formation shows a breakdown and close below the previous 3 days, however the gap created on the 1st day remains unfilled.Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.

TermimageDefinitionBearish Three Outside Down (Reversal)This is the confirmation of the Engulfing formation.TermimageDefinitionBearish Two Crows (Reversal)The gap created on the 2nd day gets filled by the 3rd day. This quick pull back does not bode well for the bulls. This price action indicates a short term top.TermimageDefinitionBearish Upside Gap Two Crows (Reversal)The gap created on the 2nd day has already started to be tested by the 3rd day. Two consecutive lower closes places a damper on the bullishness.

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Look for lower prices and the gap to be filled soon. TermimageDefinitionBearish Thrusting (Continuation)This formation underscores the lack of buyers. Even though the 2nd day is an up day, it's still unable to close above the midpoint of the previous day's body. This suggests that the downtrend will continue.TermimageDefinitionBearish Harami Cross (Reversal)The 2nd day's price range does not pierce the previous day's range and closes about where it opened.

Volume on the 2nd day is low which indicates that traders are lacking enough information to decide whether to go long or short.TermimageDefinitionBearish Kicking (Reversal)The gap created by the 2nd day becomes a resistance area. Expect lower prices and for the gap to be tested before breaking back to the upside.TermimageDefinitionBearish Meeting Lines (Reversal)The gap created by the 2nd day becomes a resistance area.

Expect lower prices and for the gap to be tested before breaking back to the upside.TermimageDefinitionBearish Shooting Star (Reversal)The long upper shadow and small real body at the bottom of the trading range are cause for concern by the bulls. They wonder if this is the end of the uptrend and take measures to protect their gains.TermimageDefinitionBearish Belt Hold (Reversal)A significant gap up occurs. The remaining price action for the day occurs to the downside. This triggers new short positions to be taken. Concern over this price action re-enforces the selling.TermimageDefinitionBearish Tweezer Top (Reversal).

The price action has trended upward then 2 consecutive days of equal highs signal resistance. This could signal a short term top is forming.TermimageDefinitionBullish Mat Hold (Continuation)This is a resting pattern for the bulls. The 2nd day still closes at a new high and the 4th day still closes above the 1st day's open.Bears worry that a reversal in not in the cards this time. Hence, the bullish trend continues on the 5th day.TermimageDefinitionBullish Rising Three Methods (Continuation). TermimageDefinitionBullish Breakaway (Reversal)The down trend is accelerated by a gap down. The next few days trend down, however start to run out of steam.

The last day of the formation shows a breakout and close above the previous 3 days, however the gap created on the 1st day remains unfilled.Since the gap is not filled and the trend is obviously deteriorating, this implies the reversal signal.TermimageDefinitionBullish Ladder Bottom (Reversal)In a downtrend and after moving solidly down for three consecutive days, the bears feel in control. The 4th day prices trade near the open of the previous day, but close at another new low.This draws attention to the bears who realize that markets do not go down forever. If the next day opens higher, then shorts will lock in profits.

And if volume is high, then a reversal has probably occurred. TermimageDefinitionBullish Three-Line Strike (Continuation)The 4th day is a powerful move down which destroys the reversal sentiment. Since the reversal has essentially already played out in a matter of one day, the risk is now higher for those who wish to bet on a reversal.The uptrend should resume.TermimageDefinitionBullish Concealing Baby Swallow (Reversal)The bears are in control for the 1st two days of this formation. However, the high on the 3rd day trades above the close of the previous day. And, a strong upward opening gap appears the last day.Since the last day closes at a new low, then this is the perfect opportunity for shorts to cover their positions.Strong short covering should propel the price upward in the coming days.TermimageDefinitionBullish Side-by-Side White Lines (Continuation)The 2nd and 3rd days are a failed attempt to reverse the uptrend.

The uptrend remains intact.TermimageDefinitionBullish Upside Gap Three Methods (Continuation)The gap up on the 2nd day gets filled by the 3rd day. More investigation of the previous weeks is recommended in order to see if this is the first gap.If so, then this pattern is probably displaying short selling to 'close the gap' created and the bullish trend should continue.TermimageDefinitionBullish Upside Tasuki Gap (Continuation)The gap up on the 2nd day does not get filled by the 3rd day. This suggests that the uptrend will continue.TermimageDefinitionBullish Abandoned Baby (Reversal)The gap down on the second day encourages the bears, however the close on the second day is nearly the same as the open on the second day.This could be a sign of temporary profit taking by the shorts, however the third day reveals that the more likely scenario is indecision on the second day. Watch for upside price action in the next few days.TermimageDefinitionBullish Stick Sandwich (Reversal)The price action of the 2nd day suggests that the downtrend is over. The next day opens higher, but sells off to close at the close of the 1st day. The 3rd day's close can be viewed as closing at a short term support level.Watch for confirmation via a higher close the next day.TermimageDefinitionBullish Morning Star (Reversal)The 2nd day gaps lower, but trades in a small range. The bullishness of this indecision is confirmed by the higher close of the 3rd day. Look for higher prices.

This is the confirmation of the Engulfing formation.TermimageDefinitionBullish Three Stars in the SouthNotice that each day's price range is engulfed by the previous day's range. In a downtrend this gives rise to indecision and increased risk for the bears to remain short. Look for higher prices ahead.TermimageDefinition3 White Soldiers (Reversal)This formation represent powerful unabated buying. Shorts would be wise to stay away from this steam engine. Longs should be prepared for a rest before proceeding on to higher prices.

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