Japanese candlestick pattern: Bullish / Bearish Engulfing

Bullish / Bearish Engulfing candlestick pattern always consists of a pair of 2 opposite candles, in which the rear candle covers all the previous candles in it. If the candle behind is a bullish candle covering the previous bearish candle, it is Bullish Engulfing. On the contrary, the candle behind is a bearish candle that covers the previous bullish candle, then it is Bearish Engulfing.

Bearish Engulfing

Bullish Engulfing

Japanese candlestick pattern: Bullish / Bearish Harami

This is the opposite candlestick pattern of Engulfing, which also includes 2 candles, but the first candle will envelop the underlying candle. Bearish Harami usually appears when it was a previous uptrend, consisting of a first bullish candlestick and if the latter is either up or down. On the contrary, Bullish Harami consists of 1 bearish candlestick first and the next candlestick is surrounded by it, the next day candlestick is either up or down. Harami is a candle that shows the weakening of a trend, but then it is not necessarily a reversal. Harami may also be called the inside bar in Price Action.

Bearish harami

Bullish Harami​

How to remember: Harami in Japanese means "pregnant", the image of a candle standing in front and wrapping the candle behind is like a pregnant mother. But being pregnant, of course, will be tired and heavy, reminiscent of the weakness and fatigue of the trend ahead.

Japanese candlestick pattern: Doji and long shadow Doji

Doji is a popular Japanese candlestick pattern, it is just a single candle with the same opening and closing prices or very close together. Doji signals market indecision and are an important reversal signal of uptrend high and downtrend bottom. Nison (1991) states that Doji signals very well at a bullish top, but not very well at a downtrend bottom. A long shadow Doji is a Doji with a very long upper or lower shadow.

Doji

Long shadow Doji

How to remember: Doji in Japanese is "unchanged, same", representing the (near) equalness of the opening and closing prices of the candle.

Japanese candlestick pattern: Evening Star

Evening Star is a candlestick pattern consisting of 3 candles: a long bullish candle, followed by a small candle with a complete upper body, and finally a long bearish candle. Evening Star always appears at the top of an uptrend, showing that the trend is about to reverse.

How to remember: Evening Star similar to the evening forecast night is about to cover the sky, showing that the price will be able to reverse from up to down. The expression of 3 candles is the same as the intersection of the afternoon with the night, in which the small candle in the middle is the afternoon star, the first bullish candle represents the day, the last bearish candle represents night.

Japanese candlestick pattern: Gravestone Doji

Gravestone Doji is a Doji tombstone candle. It is a Doji candle with a long upper shadow and no lower shadow (or a very small lower shadow). The headstone Doji shows the exhaustion of the uptrend and may reverse to decrease.

How to remember: This candle looks like a tombstone viewed from the side. That's all. Or you can imagine this candle as an incense stick standing upright. Incense and gravestones are known to be out of the way, about to reverse.

Japanese candlestick pattern: Dragonfly Doji

Dragonfly Doji is dragonfly Doji candles, in contrast to headstone Doji. It signals a bullish reversal after a downtrend.

How to remember: this candle looks like a dragonfly. Dragonflies fly. Flying is a reversal, but nothing else.

Japanese candlestick pattern: Hammer

The hammer pattern is a bullish reversal pattern after a downtrend, it is a candle with a very long lower shadow (twice the real body), the upper shadow almost none or very small. It shows bullish momentum when the price falls to create candlestick but closes above when bulls push the price up.

How to remember: this candle is like a Hammer. The hammer is the hammer. The hammer represents the strength of the uptrend. The longer the hammer has a handle, the stronger it will be closed. Hammer candles with longer tails indicate a stronger uptrend.

Japanese Candle Pattern: Hanging Man

Hanging man candlestick pattern shows the fatigue of the uptrend and signals a possible reversal in the uptrend. It is a candle with a short body, a very long lower shadow, and almost no upper shadow. Generally, it is like a Hammer candlestick, except that it is at the top of an uptrend, while the Hammer is at the bottom of a downtrend.

How to remember: hanging man is the hangman. What are you doing if you hanged Prepare for a bearish reversal.