Bullish Engulfing Pattern

When I hear the word engulfing, I imagine a wave washing over a shore or a building being consumed by flames. To engulf means to sweep over something, to surround it, or to cover it completely. Thus, it should come as no surprise that a Bullish Engulfing pattern features one candlestick covering (or engulfing) another. This two candlestick pattern occurs after a downtrend and is formed by one bearish candlestick (which is covered) and one bullish candlestick (which does the covering). It occurs frequently, so it is important that you learn to identify and interpret it. Ready for a quick lesson? To learn more about the Bullish Engulfing pattern’s formation and meaning, simply scroll down.

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Three Black Crows

Last Updated: May 9, 2017

Everyone knows that crows are omens, foreshadowing bad news on the horizon. In the world of Japanese candlesticks, crows take the shape of three descending candlesticks, which form a stairway to lead the price downward. They must appear in a trio, with each candle opening below the previous day’s open. Spotting three crows isn’t a joy in real life, and it’s not a joy in the stock market either. To learn more about the prophecy of the Three Black Crows pattern, flap your wings and soar on down . . .
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Rising Window Candlestick Pattern

Last Updated: May 1, 2017

Last week we discussed what happens when windows fall, so this week we’re watching them rise up again. Like its brother, the Rising Window candlestick pattern is a simple signal with an imaginative name. You might picture fallen windows taking flight, climbing with the help of a pulley, or simply floating up the sides of buildings. Despite its evocative title, the Rising Window candlestick pattern conveys a very basic message. To learn what that message is and how you can spot the signal, please scroll down.
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Falling Window Candlestick Pattern

Last Updated: April 7, 2017

If you ask me, the best names for candlestick patterns are the ones that spark your imagination. The Falling Window is a perfect example. When you hear that creative title, you can imagine a window dropping or sliding or even melting to the ground like one of Dalí’s clocks. Perhaps surprisingly, the lovely name refers to a very simple (but still significant) price action. To discover the formation and value of the Falling Window candlestick pattern, please scroll down.
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Downside Tasuki Gap

Last Updated: March 27, 2017

There is a positive and a negative to nearly every situation. We’ve already discussed the upside of a Tasuki Gap, so now it’s time for the downside. Occurring at the end of a distinct downtrend, the Downside Tasuki Gap is a bearish continuation pattern. Like the Upside Tasuki Gap, it isn’t particularly common or dramatic, but why not add it to your repertoire regardless? To help you get started, today we’re exploring the formation of the Downside Tasuki Gap candlestick pattern and the meaning it conveys.
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Upside Gap Tasuki

Last Updated: March 17, 2017

Although there may not be an upside to every situation, the presence of an Upside Gap Tasuki surely counts as an upside during an otherwise lackluster market day . . . right? Yes, indeed. The Upside Gap Tasuki is a bullish continuation pattern that occurs in the midst of a strong uptrend. Although this isn’t a particularly common or influential candlestick pattern, it’s certainly worth adding to your Japanese candlestick repertoire. To learn more about its formation and what it says about the current state of the market, simply scroll down.

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Tweezer Bottom Candlestick Pattern

Last Updated: March 2, 2017

It doesn’t matter if the candles are short or tall. It doesn’t matter if they’re black or white. In fact, it doesn’t even matter if there are two, five, or even ten candles! Just like the Tweezer Top candlestick pattern that we discussed earlier this month, the Tweezer Bottom candlestick pattern is formed by multiple candles in any color or size. The only crucial, distinguishing feature of this signal is that all of the candles involved must have the same low point. To learn more about the Tweezer Bottom’s formation and meaning, simply scroll down.
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Tweezer Top Candlestick Pattern

Last Updated: February 20, 2017

Most Japanese candlestick patterns require specific candles in order to exist at all. For example, they might call for a black candle or a white candle, a tall candle or a short candle, a candle with no wicks or a candle with two wicks, or some combination thereof. The Tweezer Top candlestick pattern is unique in that it only requires that the two (or more) candles involved have the same high point. Beyond that trait, the candles can look quite different. This distinguishing feature means that the Tweezer Top candlestick pattern will appear in a different form nearly every time you see it. Interested in learning more about this shape-shifting signal? Let’s dig in . . .
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Evening Star Candlestick Pattern

Last Updated: January 31, 2017

Star light, star bright, first star I see tonight . . . . Unfortunately, this hopeful nursery rhyme doesn’t apply in the world of swing trading, where an Evening Star candlestick pattern indicates that very bad things are on the horizon. When traders spot this pattern, which is a top reversal signal, they know that lower stock prices may soon be on the way. However, the Evening Star candlestick pattern is a tricky pattern to identify, so investors must proceed with caution when they think they’ve sighted it. Scroll down to learn a little more about this hard-to-spot signal.
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Falling Three Methods Pattern

Last Updated: January 20, 2017

The three-card monte, three ghosts in A Christmas Carol, three-legged races, three-ring circuses, the Holy Trinity, the primary colors, the number of sides and corners in a triangle, three strikes before you’re out  . . . we’ve already discussed the significance and prominence of the number three in our previous blog post, but it’s worth restating just how influential and common this numeral is. Whether three is your lucky number or not, we urge you to add the Falling Three Methods pattern to your Japanese candlestick repertoire. To learn what this signal looks like and what it means for the market, simply scroll down.
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