The Japanese candlestick pattern is Asia's most famous trading method, besides Ichimoku, it is also responsible for the success and popularity of Eastern technical analysis. If the West has Price Action, Elliott wave or indicator, the East is famous for the Japanese Candlestick Pattern.

However, trading with Japanese Candlestick Patterns is quite difficult because candlestick patterns are diverse and difficult to remember. Coupled with each pattern is a different sentiment of the crowd, which leads to difficulty in remembering and applying Japanese candlesticks of Traders. In this article, share how to remember the most common Japanese candlestick patterns and their sentiment. Let's see together.

Japanese Candlestick Pattern: Bullish/Bearish Engulfing

The Bullish/Bearish Engulfing candlestick pattern always consists of a pair of 2 opposite candles, in which the rear candle wraps the entire preceding candle into it. If the candlestick behind is a bullish candle that surrounds the previous bearish candle, it is a Bullish Engulfing, if the opposite candle is a bearish candle that surrounds the front bullish candle, it is a Bearish Engulfing.



Bullish/Bearish Engulfing both show the exhaustion of the previous trend and signal an imminent reversal.

How to remember: the word Engulfing in English is "submerge", you just need to remember that when you encounter a pair of candles and the next candle engulfs the previous candle, it will be Engulfing.

Japanese Candlestick Pattern: Bullish/Bearish Harami

This is the opposite candlestick pattern to Engulfing, which also includes 2 candles, but the first candle will wrap the second candle. Bearish Harami usually occurs when preceded by an uptrend, including the first bullish candle and then either bullish or bearish. In contrast, Bullish Harami consists of the first bearish candle and the following candle is covered by it, the next candle is both bullish or bearish. Harami is a candlestick that shows a weakening of the trend but not necessarily a reversal. Harami can also be referred to as the inside bar in Price Action.

How to remember: Harami in Japanese is "pregnant", the image of the candle standing in front of the candle behind is like a pregnant mother. And pregnancy is naturally exhausting and heavy, reminiscent of the weakness and fatigue of the trend ahead.

Japanese Candlestick Pattern: Doji and Long Shadow Doji

Doji is a pretty famous Japanese candlestick pattern, it is just a single candle with the opening and closing prices equal or very close to each other. Doji signals market indecision, and is an important reversal signal of uptrend tops and downtrend bottoms. Nison (1991) states that the Doji signals very well at the top of an uptrend, but not so well at the bottom of a downtrend. A Long Shadow Doji is a Doji with a very long upper or lower shadow.

How to remember: Doji in Japanese is "no change, same", representing the (nearly) equal of the opening and closing prices of the candle.

Japanese Candlestick Pattern: Evening Star

Evening Star is a candlestick pattern consisting of 3 candles: 1 long bullish candle, followed by 1 small candle and whose body is completely above the body of the 1st candle, and finally 1 long bearish candle. Evening Star always appears at the top of an uptrend, indicating that the trend is about to reverse.
How to remember: Evening Star translates into Vietnamese as "afternoon star", similar to the afternoon sunset predicting the night will soon cover the sky, showing that the price will have the ability to reverse from up to down. The expression of 3 candles is similar to the intersection of afternoon and 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 the night.

Japanese Candlestick Pattern: Gravestone Doji

Gravestone Doji is a Tombstone Doji candle. It is a Doji candle with a long upper shadow and no lower shadow (or very small lower shadow still true). The tombstone doji represents the exhaustion of the uptrend and a possible reversal to the downside.
How to remember: This candle looks like a tombstone from the side. That's all. Or you can imagine this candle as an incense stick being stuck vertically. Incense and gravestones know that it's remote, about to reverse and decrease.

Japanese Candlestick Pattern: Dragonfly Doji

The Dragonfly Doji is the Dragonfly Doji candle, the opposite of the Tombstone Doji. It signals a bullish reversal after a downtrend.
How to remember: This candle looks like a dragonfly. Dragonflies fly. Flying is a bullish reversal and nothing more.

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 (double the real body), the upper shadow is almost absent or very small. It showed bullish momentum when the price dropped to create a candlestick but closed above when pushed up by the Bulls.
How to remember: this candle resembles a Hammer. Hammer is hammer. The hammer represents the strength of the uptrend. The longer the handle, the stronger the hammer. Hammer candles with longer tails show a stronger uptrend.

Japanese Candlestick Pattern: Hanging Man

The Hanging man candlestick pattern shows the exhaustion of the uptrend and signals the possibility that the uptrend may reverse. It is a candle with short body, very long lower shadow, almost no upper shadow. In general, it is the same as the Hammer candlestick, except that it is located at the top of the uptrend, and the Hammer is at the bottom of the downtrend.
How to remember: a hanging man is a hangman. After hanging, what else is there to do? Prepare for a bearish reversal.