Technical Analysis : What is Four Price Doji?
What is Four Price Doji?
Four price doji is a candlestick where open, high, low, and close are all the same. This candle reflects the highest extent of indecision between bulls and bears. This candle is normally seen on low trading volume. It often appears in pre-market and after hours trading.
It is advisable to avoid this candle and not to place too much importance on it.
Four price doji is a candlestick where open, high, low, and close are all the same. This candle reflects the highest extent of indecision between bulls and bears. This candle is normally seen on low trading volume. It often appears in pre-market and after hours trading.
It is advisable to avoid this candle and not to place too much importance on it.
Technical Analysis : What is Dragonfly Doji: Bearish Reversal Pattern?
What is Dragonfly Doji: Bearish Reversal Pattern?
Dragonfly doji is a bearish reversal pattern. It is opposite to the gravestone doji. In this pattern, open, high, and close are at the high of the day.
Strategy: Long positions can be taken once high of the candle is exceeded.
Dragonfly doji is a bearish reversal pattern. It is opposite to the gravestone doji. In this pattern, open, high, and close are at the high of the day.
Strategy: Long positions can be taken once high of the candle is exceeded.
Technical Analysis : What is Downside Tasuki Gap: Bearish Continuation Pattern?
What is Downside Tasuki Gap: Bearish Continuation Pattern?
Downside Tasuki Gap is a three day bearish continuation pattern. It starts with a black candle which gaps below the previous black candle. The third candle is a white candle opening inside the body of the second red candle.
One can go short on the close of the third candle. The trade should be in the direction of the defined trend, which is downtrend in this case.
Downside Tasuki Gap is a three day bearish continuation pattern. It starts with a black candle which gaps below the previous black candle. The third candle is a white candle opening inside the body of the second red candle.
One can go short on the close of the third candle. The trade should be in the direction of the defined trend, which is downtrend in this case.
Technical Analysis : What is Dark Cloud Cover: Bearish Reversal Pattern?
What is Dark Cloud Cover: Bearish Reversal Pattern?
Dark Cloud Cover is a bearish reversal pattern. It appears in an uptrend. This pattern is comprised of 2 candles. First candle is a long white one, accompanied with heavy volume. Next day's candle opens above the previous day's high. But it closes below the mid-point of the first candle. However, the closing of second candle is not below the opening level of white candle.
Strategy: Short positions can be created once the low of the first candle is exceeded. Stop loss can be placed above the high of second candle.
Dark Cloud Cover is a bearish reversal pattern. It appears in an uptrend. This pattern is comprised of 2 candles. First candle is a long white one, accompanied with heavy volume. Next day's candle opens above the previous day's high. But it closes below the mid-point of the first candle. However, the closing of second candle is not below the opening level of white candle.
Strategy: Short positions can be created once the low of the first candle is exceeded. Stop loss can be placed above the high of second candle.
Technical Analysis : What is Closing Marubozu?
What is Closing Marubozu?
Closing Marubozu candles has no shadow extending from the close. Closing Marubozu candles closes at the high or low of the day, depending on the closing of the stock. It means, if the stock closes up, it closes at its high price of the day and if it closes down, then its closing price is equal to its low price for the day.
White Closing Marubozu: It is considered as bullish candle.
Black Closing Marubozu: It is considered as bearish
Closing Marubozu candles has no shadow extending from the close. Closing Marubozu candles closes at the high or low of the day, depending on the closing of the stock. It means, if the stock closes up, it closes at its high price of the day and if it closes down, then its closing price is equal to its low price for the day.
White Closing Marubozu: It is considered as bullish candle.
Black Closing Marubozu: It is considered as bearish
Technical Analysis : What is Bullish Separating Line: Bullish Continuation Pattern?
What is Bullish Separating Line: Bullish Continuation Pattern?
Bullish Separating Line is a bullish continuation pattern and is opposite of Bearish Separating Line. In this pattern, first candle is a long black candle. Second candle opens gap up at first candles' open level and closes up, thus forming a long white candle.
This pattern is traded during a strong uptrend. Long positions can be initiated after the closing of second candles. Traders should make sure that both the candles are of decent size.
Bullish Separating Line is a bullish continuation pattern and is opposite of Bearish Separating Line. In this pattern, first candle is a long black candle. Second candle opens gap up at first candles' open level and closes up, thus forming a long white candle.
This pattern is traded during a strong uptrend. Long positions can be initiated after the closing of second candles. Traders should make sure that both the candles are of decent size.
Technical Analysis : What is Bullish Rising Three Method: Bullish Continuation Pattern?
What is Bullish Rising Three Method: Bullish Continuation Pattern?
Bullish Rising Three Method is a continuation candlestick pattern. It is ideally a five candle pattern in which second, third, and fourth candles are opposite in color of the first candle.
The first candlestick, should be a strong white candle with a wide spread and closing near the day's high. The second, third, and fourth candles should be small black candles which should not break below the lows of the first candle. The pullback by the three candles should be controlled in nature.
This pattern works best for day trading. It is considered to be reliable if three candlesticks consolidation occur right above a whole number. The last candle is another large white candle that rises above the highs of the first candle.
Bullish Rising Three Method is a continuation candlestick pattern. It is ideally a five candle pattern in which second, third, and fourth candles are opposite in color of the first candle.
The first candlestick, should be a strong white candle with a wide spread and closing near the day's high. The second, third, and fourth candles should be small black candles which should not break below the lows of the first candle. The pullback by the three candles should be controlled in nature.
This pattern works best for day trading. It is considered to be reliable if three candlesticks consolidation occur right above a whole number. The last candle is another large white candle that rises above the highs of the first candle.
Technical Analysis : What is Bullish Meeting Lines: Bullish Reversal Pattern?
What is Bullish Meeting Lines: Bullish Reversal Pattern?
Bullish Meeting Lines pattern is a bullish reversal pattern. It happens in a downtrend. In this pattern, first candle is black, correlating the ongoing downtrend. Second candle opens at a new low, but closes at previous day's closing level.
Strategy: Traders can take long position only after the high of the first candle is exceeded. Stop loss should be placed below the low of second candle.
Bullish Meeting Lines pattern is a bullish reversal pattern. It happens in a downtrend. In this pattern, first candle is black, correlating the ongoing downtrend. Second candle opens at a new low, but closes at previous day's closing level.
Strategy: Traders can take long position only after the high of the first candle is exceeded. Stop loss should be placed below the low of second candle.
Technical Analysis : What is Bullish Mat Hold: Bullish Continuation Pattern?
What is Bullish Mat Hold: Bullish Continuation Pattern?
Bullish Mat Hold is a bullish continuation pattern. It is a variation of Rising Three Methods. The pattern comprises of 5 candles. The pattern is said to be potent when it appears in primary up trend. It is opposite of Bearish Mat Hold pattern.
In this pattern, first candle is a long white candle. Second candle gaps up, but closes lower. Third and fourth candles continue to retrace gains, but with less volume. Fifth candle is a large white candle, making a new high.
Bullish Mat Hold is a bullish continuation pattern. It is a variation of Rising Three Methods. The pattern comprises of 5 candles. The pattern is said to be potent when it appears in primary up trend. It is opposite of Bearish Mat Hold pattern.
In this pattern, first candle is a long white candle. Second candle gaps up, but closes lower. Third and fourth candles continue to retrace gains, but with less volume. Fifth candle is a large white candle, making a new high.
Technical Analysis : What is Bullish Harami: Bullish Reversal Pattern?
What is Bullish Harami: Bullish Reversal Pattern?
Bullish Harami is a bullish reversal pattern. It is characterized by a large black candle, followed by a small white candle. The white candle is contained completely within the previous black candle.
The pattern appears in a downtrend. A long black candle is seen, which is followed by a small white candle, which is completely engulfed by the previous day candle. Shadows need not be compulsorily engulfed, but real body should be.
The market is entering in an indecision or congestion phase post Bullish Harami.
Strategy: A confirmation on the third day in the form of a white candle, large gap up or a higher close makes sure that the downtrend has reversed. Long positions can be initiated post confirmation.
Bullish Harami is a bullish reversal pattern. It is characterized by a large black candle, followed by a small white candle. The white candle is contained completely within the previous black candle.
The pattern appears in a downtrend. A long black candle is seen, which is followed by a small white candle, which is completely engulfed by the previous day candle. Shadows need not be compulsorily engulfed, but real body should be.
The market is entering in an indecision or congestion phase post Bullish Harami.
Strategy: A confirmation on the third day in the form of a white candle, large gap up or a higher close makes sure that the downtrend has reversed. Long positions can be initiated post confirmation.
Technical Analysis : What is Bullish Harami Cross: Bullish Reversal Pattern?
What is Bullish Harami Cross: Bullish Reversal Pattern?
Bullish Harami Cross is a bullish reversal pattern. It appears in a downtrend. In this pattern, a long black candle appears, followed by a doji. This pattern is considered to be more significant than Bullish Harami Pattern.
In this pattern, on first day, a long black candle appears in a downtrend. Next day, it is followed by a doji, which is completely engulfed by the previous large black candle.
Strategy: Next day confirmation (though not required) in the form of white candle, large gap up or a higher close confirms the bottom and can be used to initiate long positions or liquidate short positions.
Bullish Harami Cross is a bullish reversal pattern. It appears in a downtrend. In this pattern, a long black candle appears, followed by a doji. This pattern is considered to be more significant than Bullish Harami Pattern.
In this pattern, on first day, a long black candle appears in a downtrend. Next day, it is followed by a doji, which is completely engulfed by the previous large black candle.
Strategy: Next day confirmation (though not required) in the form of white candle, large gap up or a higher close confirms the bottom and can be used to initiate long positions or liquidate short positions.
Technical Analysis : What is Bullish Engulfing: Bullish Reversal Pattern?
What is Bullish Engulfing: Bullish Reversal Pattern?
Bullish Engulfing is an important bottom reversal pattern. It appears after a downtrend. It's a two candlestick pattern. In this, a large white candle completely engulfs the preceding small black candle. Though it is not necessary for the white candle to engulf the shadows of the previous black candle, it should engulf the entire real body. It's an important bullish reversal signal. Heavy volume on second day of the pattern creates higher probability of trend reversal.
Strategy: Confirmation on the third day in the form of a white candle, large gap up or a higher close can be used to initiate long positions.
Bullish Engulfing is an important bottom reversal pattern. It appears after a downtrend. It's a two candlestick pattern. In this, a large white candle completely engulfs the preceding small black candle. Though it is not necessary for the white candle to engulf the shadows of the previous black candle, it should engulf the entire real body. It's an important bullish reversal signal. Heavy volume on second day of the pattern creates higher probability of trend reversal.
Strategy: Confirmation on the third day in the form of a white candle, large gap up or a higher close can be used to initiate long positions.
Technical Analysis : What is Bullish Belt Hold: Bullish Reversal Pattern?
What is Bullish Belt Hold: Bullish Reversal Pattern?
Bullish Belt Hold is a bullish reversal pattern, appearing in a downtrend. In this pattern, the day opens at its lowest level, but then stock begins to move up and closes near its high, but not necessarily at the highest point of the day. The candle is a White Opening Marubozu. It has a very small upper shadow but no lower shadow.
Strategy: A confirmation with either a white candle, large gap up or a higher close on the next day can be used to initiate long positions.
Bullish Belt Hold is a bullish reversal pattern, appearing in a downtrend. In this pattern, the day opens at its lowest level, but then stock begins to move up and closes near its high, but not necessarily at the highest point of the day. The candle is a White Opening Marubozu. It has a very small upper shadow but no lower shadow.
Strategy: A confirmation with either a white candle, large gap up or a higher close on the next day can be used to initiate long positions.
Technical Analysis : What is Breakaway Pattern: Bearish Reversal Pattern?
What is Breakaway Pattern: Bearish Reversal Pattern?
Breakaway Pattern is a bearish reversal pattern. It consists of 5 candles. In this pattern, the current trend is seen beginning to slow and then filling of the gap is seen. First candle in this formation is a long white candle, which closes near its high. Second candle is a white candle, which gaps up. Third and fourth candles continue in the direction of the current trend and have smaller bodies. Fifth candle is a long black candle, closing inside the gap between first and second candle.
A reversal is confirmed in the form of black candle or a large gap down on sixth day.
Strategy: Short positions can be taken once low of the fifth candle is broken.
Breakaway Pattern is a bearish reversal pattern. It consists of 5 candles. In this pattern, the current trend is seen beginning to slow and then filling of the gap is seen. First candle in this formation is a long white candle, which closes near its high. Second candle is a white candle, which gaps up. Third and fourth candles continue in the direction of the current trend and have smaller bodies. Fifth candle is a long black candle, closing inside the gap between first and second candle.
A reversal is confirmed in the form of black candle or a large gap down on sixth day.
Strategy: Short positions can be taken once low of the fifth candle is broken.
Technical Analysis : What is Black Marubozu?
What is Black Marubozu?
Black Marubozu is a large black candle with no wicks on either end. This candle is considered to be very bearish. This pattern can lead to a continuation of current downtrend or start of a bullish reversal.
It is very critical to determine whether Black Marubozu is a continuation or reversal pattern, as the candle often occurs with high volume
Black Marubozu is a large black candle with no wicks on either end. This candle is considered to be very bearish. This pattern can lead to a continuation of current downtrend or start of a bullish reversal.
It is very critical to determine whether Black Marubozu is a continuation or reversal pattern, as the candle often occurs with high volume
Technical Analysis : What is Bearish Separating Line: Bearish Continuation Pattern?
What is Bearish Separating Line: Bearish Continuation Pattern?
Bearish Separating Line is a bearish continuation pattern. It is exactly opposite to Bullish Separating Line. In this pattern, first candle is a white one in a downtrend, followed by lower gap opening next day. Second day candle is a large black one, whose opening level is equal to previous day's opening level. It closes at lower levels.
Bearish separating lines should be traded during a strong downtrend. Traders should make sure that the two candlesticks in the formation are of a decent size. A short position can be taken after the close of the second candlestick.
Strategy: Short positions can be created post close of second candle. The two candles in this pattern should be of decent size.
Bearish Separating Line is a bearish continuation pattern. It is exactly opposite to Bullish Separating Line. In this pattern, first candle is a white one in a downtrend, followed by lower gap opening next day. Second day candle is a large black one, whose opening level is equal to previous day's opening level. It closes at lower levels.
Bearish separating lines should be traded during a strong downtrend. Traders should make sure that the two candlesticks in the formation are of a decent size. A short position can be taken after the close of the second candlestick.
Strategy: Short positions can be created post close of second candle. The two candles in this pattern should be of decent size.
Technical Analysis : What is Bearish Meeting Lines: Bearish Reversal Pattern?
What is Bearish Meeting Lines: Bearish Reversal Pattern?
Bearish Meeting Lines pattern is a bearish reversal pattern. It takes place in an uptrend. In this pattern, first candle is green, correlating the ongoing uptrend. Second candle opens at a new high, but closes at previous day's closing level.
Traders can initiate short positions only after the low of the first candle is exceeded. Stop loss can be placed above the high level of the second candle
Bearish Meeting Lines pattern is a bearish reversal pattern. It takes place in an uptrend. In this pattern, first candle is green, correlating the ongoing uptrend. Second candle opens at a new high, but closes at previous day's closing level.
Traders can initiate short positions only after the low of the first candle is exceeded. Stop loss can be placed above the high level of the second candle
Technical Analysis : What is Bearish Mat Hold: Bearish Continuation Pattern?
What is Bearish Mat Hold: Bearish Continuation Pattern?
Bearish Mat Hold pattern is a variation of the Falling Three Method. It is comprised of 5 candles.
In this pattern, first candle is a long black candlestick in a downtrend. Second day candle is a white one, which gaps down. Third and fourth day candles continue to retrace losses from the first candle, but with lower volume. Fifth candle is a large black candle, which makes a new low
Bearish Mat Hold pattern is a variation of the Falling Three Method. It is comprised of 5 candles.
In this pattern, first candle is a long black candlestick in a downtrend. Second day candle is a white one, which gaps down. Third and fourth day candles continue to retrace losses from the first candle, but with lower volume. Fifth candle is a large black candle, which makes a new low
Technical Analysis : What is Bearish Harami: Bearish Reversal Pattern?
What is Bearish Harami: Bearish Reversal Pattern?
Bearish Harami is a bearish reversal pattern. It is characterized by a large white candle, followed by a small black candle. The black candle is contained completely within the previous white candle.
The pattern appears in an uptrend. A long white candle is seen, which is followed by a small black candle, which is completely engulfed by the previous day candle. Shadows need not be compulsorily engulfed, but real body should be.
Strategy: A confirmation on the third day in the form of black candle, large gap down or a lower close makes sure that uptrend has reversed. Short positions can be initiated post confirmation.
Bearish Harami is a bearish reversal pattern. It is characterized by a large white candle, followed by a small black candle. The black candle is contained completely within the previous white candle.
The pattern appears in an uptrend. A long white candle is seen, which is followed by a small black candle, which is completely engulfed by the previous day candle. Shadows need not be compulsorily engulfed, but real body should be.
Strategy: A confirmation on the third day in the form of black candle, large gap down or a lower close makes sure that uptrend has reversed. Short positions can be initiated post confirmation.
Technical Analysis : What is Bearish Harami Cross: Bearish Reversal Pattern?
What is Bearish Harami Cross: Bearish Reversal Pattern?
Bearish Harami Cross is a bearish reversal pattern. It appears in an uptrend. In this pattern, a long white candle appears, followed by a doji. This pattern is considered to be more significant than Bearish Harami Pattern.
In this pattern, on first day, a long white candle appears in an uptrend. Next day, it is followed by a doji, which is completely engulfed by the previous large white candle.
Strategy: Next day confirmation (though not required) in the form of black candle, large gap down or a lower close confirms the top and can be used to initiate short positions or liquidate long positions.
Bearish Harami Cross is a bearish reversal pattern. It appears in an uptrend. In this pattern, a long white candle appears, followed by a doji. This pattern is considered to be more significant than Bearish Harami Pattern.
In this pattern, on first day, a long white candle appears in an uptrend. Next day, it is followed by a doji, which is completely engulfed by the previous large white candle.
Strategy: Next day confirmation (though not required) in the form of black candle, large gap down or a lower close confirms the top and can be used to initiate short positions or liquidate long positions.
Technical Analysis : What is Bearish Falling Three Method: Bearish Continuation Pattern?
What is Bearish Falling Three Method: Bearish Continuation Pattern?
It is a bearish continuation pattern. It is opposite of bullish rising three method pattern. The pattern occurs after a downtrend. A strong move down in the first candle is followed by two to four candles of bouncing action (ideally three). Once the bounce has completed, a strong red candle takes the stock below the lows of the first candle.
Some skills are essential to identify if a breakout (breakdown) is supported by more than a few traders while trading bearish falling three method in day trading.
It is a bearish continuation pattern. It is opposite of bullish rising three method pattern. The pattern occurs after a downtrend. A strong move down in the first candle is followed by two to four candles of bouncing action (ideally three). Once the bounce has completed, a strong red candle takes the stock below the lows of the first candle.
Some skills are essential to identify if a breakout (breakdown) is supported by more than a few traders while trading bearish falling three method in day trading.
Technical Analysis : What is Bearish Engulfing: Bearish Reversal Pattern?
What is Bearish Engulfing: Bearish Reversal Pattern?
Bearish Engulfing is one of the important bearish reversal patterns. It appears after an uptrend. It's a two candlestick pattern. In this, a large black candle completely engulfs the preceding small white candle. Though it is not necessary for the black candle to engulf the shadows of the previous white candle, it should engulf the entire real body. Heavy volume on second day of the pattern creates higher probability of trend reversal.
Strategy: Confirmation on the third day in the form of a black candle, large gap down or a lower close can be used to initiate short positions.
Bearish Engulfing is one of the important bearish reversal patterns. It appears after an uptrend. It's a two candlestick pattern. In this, a large black candle completely engulfs the preceding small white candle. Though it is not necessary for the black candle to engulf the shadows of the previous white candle, it should engulf the entire real body. Heavy volume on second day of the pattern creates higher probability of trend reversal.
Strategy: Confirmation on the third day in the form of a black candle, large gap down or a lower close can be used to initiate short positions.
Technical Analysis : What is Bearish Belt Hold: Bearish Reversal Pattern?
What is Bearish Belt Hold: Bearish Reversal Pattern?
Bearish Belt Hold is a bearish reversal pattern, appearing in an uptrend. In this pattern, the day opens at its high level, but then price falls and closes near its low, not necessarily at the lows of the day. The candle is a Black Opening Marubozu. It has very small lower shadow but no upper shadow.
Strategy: A confirmation with either a black candle, large gap down or a lower close on the next day can be used to initiate short positions.
Bearish Belt Hold is a bearish reversal pattern, appearing in an uptrend. In this pattern, the day opens at its high level, but then price falls and closes near its low, not necessarily at the lows of the day. The candle is a Black Opening Marubozu. It has very small lower shadow but no upper shadow.
Strategy: A confirmation with either a black candle, large gap down or a lower close on the next day can be used to initiate short positions.
Technical Analysis : What is Advance Block: Bearish Reversal Pattern?
What is Advance Block: Bearish Reversal Pattern?
Advance Block is a bearish reversal pattern. This is similar to Bullish Three White Soldiers Pattern. It is characterized by three long white candles with consecutively higher closes. Each successive day is weaker than the one preceding it, which suggests that the rally is losing strength and there is possibility of a reversal in trend. This pattern appears after a clear uptrend. This pattern can be used by the traders as an early sign to lock in profits or move up the protective stop loss levels.
Advance Block is a bearish reversal pattern. This is similar to Bullish Three White Soldiers Pattern. It is characterized by three long white candles with consecutively higher closes. Each successive day is weaker than the one preceding it, which suggests that the rally is losing strength and there is possibility of a reversal in trend. This pattern appears after a clear uptrend. This pattern can be used by the traders as an early sign to lock in profits or move up the protective stop loss levels.
Technical Analysis : What is Abandoned Baby Top: Bearish Reversal Pattern?
What is Abandoned Baby Top: Bearish Reversal Pattern?
Abandoned Baby Top is a bearish reversal pattern, which is composed of a doji star, gaping away (including its shadow) from the previous and following candles. This pattern is seen in an uptrend. On first day, a long white candle is seen. On second day, a doji appears, which gaps above the high of previous day candle. On third day, a black candle appears opening gap down. This pattern is similar to three bar reversal pattern.
Impact post Pattern: Declines after abandoned baby top comes in the market very fast, since the ones holding long positions will sell their positions to book profits.
Abandoned Baby Top is a bearish reversal pattern, which is composed of a doji star, gaping away (including its shadow) from the previous and following candles. This pattern is seen in an uptrend. On first day, a long white candle is seen. On second day, a doji appears, which gaps above the high of previous day candle. On third day, a black candle appears opening gap down. This pattern is similar to three bar reversal pattern.
Impact post Pattern: Declines after abandoned baby top comes in the market very fast, since the ones holding long positions will sell their positions to book profits.
Technical Analysis : What is Abandoned Baby Bottom: Bullish Reversal Pattern?
What is Abandoned Baby Bottom: Bullish Reversal Pattern?
Abandoned Baby Bottom is a bullish reversal pattern, which is composed of a doji star, gaping away (including its shadow) from the previous and following candles. This pattern is seen in a downtrend. On first day, a long black candle is seen. On second day, a doji appears, which gaps below the low of previous day candle. On third day, a white candle appears opening gap up. This pattern is similar to three bar reversal pattern.
Impact Post Pattern: Rally post this pattern will be fast as short sellers will be forced to cover fast.
Abandoned Baby Bottom is a bullish reversal pattern, which is composed of a doji star, gaping away (including its shadow) from the previous and following candles. This pattern is seen in a downtrend. On first day, a long black candle is seen. On second day, a doji appears, which gaps below the low of previous day candle. On third day, a white candle appears opening gap up. This pattern is similar to three bar reversal pattern.
Impact Post Pattern: Rally post this pattern will be fast as short sellers will be forced to cover fast.
Technical Analysis : What are Continuation and reversal patterns?
What are Continuation and reversal patterns?
Continuation patterns will help you upgrade your skills on how to identify continuation of bullish patterns and project the price targets. Reversal patterns will warn you of the bull markets exhausting their uptrend.
The continuation patterns are channels, flags and pennants, and trendlines. The reversal patterns are island reversal, moving average crossover, and head and shoulder formation.
Continuation patterns will help you upgrade your skills on how to identify continuation of bullish patterns and project the price targets. Reversal patterns will warn you of the bull markets exhausting their uptrend.
The continuation patterns are channels, flags and pennants, and trendlines. The reversal patterns are island reversal, moving average crossover, and head and shoulder formation.
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