Bullish
Hammer
Occurs after a long downtrend and signals a trend reversal. The pattern comprises of a single candle, and can be either bullish or bearish.
Criteria
The candle is recognized when the open, high and close are almost similar and is recognized by a small body with a long lower shadow, at least twice as long as the body.
The trend reversal will be confirmed with a higher open the following day.
EUR/JPY- DAILY CHART
Inverted hammer
This pattern can be seen after a prolonged downtrend and signals a trend reversal. The pattern comprises of a single candle, either bullish or bearish.
Criteria
The candle is identified when the open, low and close are almost the same and is represented by a small body with a long upper shadow, at least twice as long as the body. The trend reversal will be confirmed, if on the next day, prices open up with a gap.
USD/CAD- DAILY CHART
Piercing pattern
Occurs after a prolonged bearish trend and signals a trend reversal. The pattern comprises of two candles- the first a bearish candle and the second a bullish.
Criteria
Candle- 1 is a long bearish candle indicating the expansion of the current downtrend
Candle- 2 is a long bullish candle that opens below the closing price of candle- 1 and closes at least halfway into the previous candle.
USD/CAD- DAILY CHART
Bullish engulfing
Occurs after a prolonged downtrend and signals a trend reversal. The pattern involves two- candles; the first a bearish and the second a bullish, similar to the piercing pattern.
Criteria
Candle- 1 is a bearish candle representing the bearish trend.
Candle- 2 is a bullish candle that opens below the closing price of candle- 2 and closes above the opening price of the previous candle, thereby completely engulfing the bearish candle.
AUD/CHF- DAILY CHART
Morning star
This candlestick pattern can be seen after a prolonged downtrend and indicates a trend reversal. It is a three- candlestick pattern with the first and last candles comprising of a long bearish and a long bullish candle correspondingly, and sandwiched in between is a small bodied candle or a doji.
Criteria
Candle- 1 is a bearish candle, representing the bearish trend
Candle- 2 is a small bullish/ bearish candle or a doji that opens with a downward gap. Candle- 3 is a long bullish candle, opening higher with a gap and erasing most of the losses of day- 1, thus indicating a reversal.
CAD/CHF- DAILY CHART
Bearish
Hanging man
Occurs after a long uptrend and signals a trend reversal. The pattern is similar to the ‘Hammer’ and comprises of a single candle, and can be either bullish or bearish.
Criteria
The candle is recognized when the open, high and close are almost similar and is recognized by a small body with a long lower shadow, at least twice as long as the body.
The trend reversal will be confirmed with a higher open the following day.
EUR/JPY- DAILY CHART
Shooting star
This pattern can be seen after a prolonged uptrend and is very appears very similar to an ‘Inverted hammer’. The pattern comprises of a single candle, either bullish or bearish.
Criteria
The candle is identified when the open and the low are almost the same and is represented by a small body with a long upper shadow.
USD/CAD- DAILY CHART
Dark cloud cover
Occurs after a prolonged bullish trend and signals a trend reversal. The description is very similar to the ‘Piercing pattern’ and comprises of two candles- the first a bullish candle and the second a bearish.
Criteria
Candle- 1 is a long bullish candle indicating the expansion of the current uptrend
Candle- 2 is a long bearish candle that opens above the closing price of candle- 1 and closes at least halfway into the previous candle.
USD/CHF- DAILY CHART
Bearish engulfing
Occurs after a prolonged uptrend and signals a trend reversal. The pattern involves two- candles; the first a bullish and the second a bearish, similar to the dark cloud cover pattern.
Criteria
Candle- 1 is a bullish candle representing the bullish trend.
Candle- 2 is a bearish candle that opens above the closing price of candle- 2 and closes below the opening price of the previous candle, thereby completely engulfing the bullish candle.
AUD/JPY- DAILY CHART
Evening star
The chart pattern can be seen after a prolonged uptrend and indicates a trend reversal. It is a three- candlestick pattern with the first and last candles comprising of a long bullish and a long bearish candle correspondingly and sandwiched in between is a small bodied candle or a doji.
Criteria
Candle- 1 is a bullish candle, representing the bullish trend
Candle- 2 is a small bullish/ bearish candle or a doji that opens higher with a gap
Candle- 3 is a long bearish candle, opening lower with a gap and erasing most of the losses of day- 1, thus indicating a reversal
EUR/CAD- DAILY CHART
