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8 - Candlestick Patterns

This document provides definitions and descriptions of various candlestick formations used in Japanese candlestick charting techniques. Some of the formations discussed include bullish and bearish belt holds seen at low or high price areas, counterattack lines showing a stalemate between bulls and bears, dark cloud covers as a bearish reversal signal, various doji lines as important individual and pattern components, engulfing patterns as top and bottom reversals, doji star and evening star patterns as important reversals, and the evening doji star pattern as more bearish than the regular evening star.

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Ger Saints
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437 views10 pages

8 - Candlestick Patterns

This document provides definitions and descriptions of various candlestick formations used in Japanese candlestick charting techniques. Some of the formations discussed include bullish and bearish belt holds seen at low or high price areas, counterattack lines showing a stalemate between bulls and bears, dark cloud covers as a bearish reversal signal, various doji lines as important individual and pattern components, engulfing patterns as top and bottom reversals, doji star and evening star patterns as important reversals, and the evening doji star pattern as more bearish than the regular evening star.

Uploaded by

Ger Saints
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CANDLESTICK

FORMATIONS

text from: Japanese Candlestick Charting Techniques by Steve Nison


Candlestick Line

The candlestick line is


comprised of:

BODY
UPPER SHADOW
LOWER SHADOW
Belt Hold Lines
BULLISH BELT HOLD
A tall white candle that opens on its
low. known as white opening shaven
bottom.
At a low price area, this is a bullish
signal.

BEARISH BELT HOLD


A long black candle which opens on
its high. known as black opening
shaven head.
At a high price level, it is considered
bearish.
Counterattack lines
following a black in a
downtrend, the market
gaps sharply lower on the
opening and then closes
unchanged from the prior
session's close.

A pattern which reflects a


stalemate between the
bulls and bears.
Dark Cloud Cover

a bearish reversal signal.

In an uptrend a long white


candle is followed by
a black candlestick
that opens above the prior
white candle’s high.
It then closes well into the
white candle's body.
Doji
a session in which the open and
close are almost the same.
We have gravestone or long-
legged doji depending on where
the opening and closing are in
relation to the entire range.
Doji lines are among the most
important individual candlestick
lines. They are also components
of important candlestick
patterns.
Engulfing patterns
A bullish engulfing pattern is
comprised of a large white real body
which engulfs a small black real body
in a downtrend. The bullish
engulfing pattern is an important
bottom reversal.

A bearish engulfing pattern (a major


top reversal pattern), occurs when
selling pressure overwhelms buying
pressure as reflected by a long black
real body engulfing a small white real
body in an uptrend.
Doji Star

A doji line which gaps


from a long white or black
candlestick.

An important reversal
pattern with confirmation
during the next session.
Evening Star
A major top reversal pattern
formed by three candlesticks.

The first is a tall white real body,


the second is a small real body
(white or black) which gaps
higher to form a star, the third
is a black candlestick which
closes well into the first
session's white real body.
Evening doji star
The same as an evening star
except the middle
candlestick (i.e., the star
portion) is a doji instead of a
small real body.

Because there is a doji in


this patter, it is considered
more bearish than the
regular evening star.

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