High profit candlestick patterns

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Here we will cover the well-known candlestick
patterns for informational purposes only. The schematics on the left
shows how it may look in the real chart. Every pattern has a funny name
and brief description. You don't have to remember them all! We will talk
about one very simple but effective pattern in Chapter IV: Simple scalping strategy. Just keep an eye on some reversal and continuation patterns.

II.1. Bullish reversal patterns

This category of candlestick patterns signals a
potential trend reversal from bearish to bullish. Before a pattern
appears, you should identify a short-term downtrend. We will talk about trend definition later in Chapter III: What is the market trend?.
Important to note, a reversal pattern does not necessarily result in
complete trend reversal, but a minor change or pause in price action.

	Morning Star A small body that gaps downward implies indecision between buyers and sellers and potential trend reversal. The reversal is confirmed by bullish candlestick on the third day.		Piercing Line A long bearish candlestick is followed by a long bullish candlestick that opens below the previous day's low and closes within the first day body (and above the midpoint of this body). The market feels uncertain to make new lows.
	Abandoned Baby A Doji (candlestick with very small body) appears and completely gaps below the bearish candlestick. The reversal is confirmed by the second gap and bullish candlestick.		Three Inside Up A bullish Harami pattern (discussed later) appears in the first two days. The reversal is confirmed by bullish candlestick on the third day that closes higher than previous candlestick.
	Three Outside Up A bullish Engulfing pattern (discussed later) appears in the first two days. The reversal is confirmed by bullish candlestick on the third day that closes higher than previous candlestick.		Three White Soldiers Three consecutive bullish candlesticks. Each opens within the body of the previous candlestick and closes at a new high.
	Concealing Baby Swallow Very rare pattern. Two consecutive bearish Marubozu candlesticks appear (candlesticks with long body and short shadows). The third candlestick with long upper shadow gaps downward. The fourth bearish Marubozu candlestick completely engulfs the previous candlestick.		Engulfing Simple. The body of the bullish candlestick engulfs the body of the previous bearish candlestick.
	Dragonfly Doji A Doji with long lower shadow and no (or very short) upper shadow looks like a dragonfly. It implies indecision between buyers and sellers and it seems that buyers took the price back for a moment.		Gravestone Doji Similar to Dragonfly Doji, but the upper shadow is long and the lower shadow is very short or none.
	Doji Star A Doji with small trading range gaps below the previous bearish candlestick. It implies indecision between buyers and sellers.		Harami Cross A bullish Harami pattern (discussed later) appears. Additionally, the second candlestick is a Doji.
	Three Stars In The South Very rare. The first bearish candlestick has long lower shadow and very short upper shadow. The second candlestick is similar to the first one, but it's a bit smaller and its low is higher than the previous low. The third candlestick is also bearish and lies within the range of the previous candlestick.		Breakaway Long bearish candlestick is followed by a gap. The next three consecutive bearish candlesticks make new lows. Suddenly, a long bullish candlestick appears and closes inside the gap between the first two candlesticks.
	Harami Simple. The body of the bullish candlestick is engulfed by the body of the previous bearish candlestick.		Hammer Hammer is a candlestick with a small body, long lower shadow as compared to the body and very short or no upper shadow. This implies that sellers cover their positions. Color of the hammer is not important here.
	Inverted Hammer Inverted Hammer is a candlestick with a small body, long upper shadow as compared to the body and very short or no lower shadow. This implies that sellers can't push price lower. Color of the Inverted Hammer is not important here.

II.2. Bullish continuation patterns

Bullish continuation patterns signal that the
established trend will continue. Before a pattern appears, you should
identify a short-term uptrend. We will talk about trend definition later. A continuation pattern often lead to consolidation.

	Rising Three Methods A long bullish candlestick is followed by some small candlesticks forming a brief downtrend that does not exceed the low of the first candlestick. The fifth bullish candlestick closes at a new high. It confirms that the bullish mood has resumed.		Three Line Strike Three consecutive bullish candlesticks, each closing at a new high, are followed by a bearish candlestick that opens at a new high and closes below the first day's open.
	Mat Hold A long bullish candlestick is followed by a gap and then by some small candlesticks forming a brief downtrend that does not exceed the low of the first candlestick. The fifth bullish candlestick gaps upward and closes at a new high. It confirms that the bullish mood has resumed.

II.3. Bearish reversal patterns

This category of candlestick patterns signals a
potential trend reversal from bullish to bearish. Before a pattern
appears, you should identify a short-term uptrend.
We will talk about trend definition later. Important to note, a
reversal pattern does not necessarily result in complete trend reversal,
but a minor change or pause in price action.

	Evening Star A small body that gaps upward implies indecision between buyers and sellers and potential trend reversal. The reversal is confirmed by bearish candlestick on the third day.		Dark Cloud Cover As opposed to Piercing Line, a long bullish candlestick is followed by a long bearish candlestick that opens above the previous day's high and closes within the first day body (and below the midpoint of this body). The market feels uncertain to make new highs.
	Abandoned Baby A Doji (candlestick with very small body) appears and completely gaps above the bullish candlestick. The reversal is confirmed by the second gap and bearish candlestick.		Three Inside Down A bearish Harami pattern (discussed later) appears in the first two days. The reversal is confirmed by bearish candlestick on the third day that closes lower than previous candlestick.
	Three Outside Down A bearish Engulfing pattern (discussed later) appears in the first two days. The reversal is confirmed by bearish candlestick on the third day that closes lower than previous candlestick.		Three Black Crows Three consecutive bearish candlesticks. Each opens within the body of the previous candlestick and closes at a new low.
	Upside Gap Two Crows A long bullish candlestick is followed by an upward gap and a bearish candlestick. The body of the third bearish candlestick engulfs the body of the previous candlestick and closes above the the first day's close. Weakening of the uptrend is evident.		Engulfing Simple. The body of the bearish candlestick engulfs the body of the previous bullish candlestick.
	Dragonfly Doji A Doji with long lower shadow and no (or very short) upper shadow looks like a dragonfly. It implies indecision between buyers and sellers.		Gravestone Doji Similar to Dragonfly Doji, but the upper shadow is long and the lower shadow is very short or none.
	Doji Star A Doji with small trading range gaps above the previous bullish candlestick. It implies indecision between buyers and sellers.		Harami Cross A bearish Harami pattern (discussed later) appears. Additionally, the second candlestick is a Doji.
	Advance Block Three consecutive bullish candlesticks. Each opens within the body of the previous candlestick and closes at a new high. Each body is smaller than the previous day's body. It signals weakening of the uptrend.		Two Crows A long bullish candlestick is followed by an upward gap and a bearish candlestick. The third bearish candlestick opens within the body of the previous candlestick and closes within the first day's body.
	Breakaway Long bullish candlestick is followed by a gap. The next three consecutive bullish candlesticks make new highs. Suddenly, a long bearish candlestick appears and closes inside the gap between the first two candlesticks.		Harami Simple. The body of the bearish candlestick is engulfed by the body of the previous bullish candlestick.
	Shooting Star Shooting Star is a candlestick with a small body, long upper shadow as compared to the body and very short or no lower shadow. This implies that buyers cover their positions. Color of the Shooting Star is not important here.		Hanging Man Hanging Man is a candlestick with a small body, long lower shadow as compared to the body and very short or no upper shadow. This implies that buyers can't push price higher. Color of the Hanging Man is not important here.

II.4. Bearish continuation patterns

Bearish continuation patterns signal that the
established trend will continue. Before a pattern appears, you should
identify a short-term downtrend. We will talk about trend definition later. A continuation pattern often lead to consolidation.

	Falling Three Methods A long bearish candlestick is followed by some small candlesticks forming a brief uptrend that does not exceed the high of the first candlestick. The fifth bearish candlestick closes at a new low. It confirms that the bearish mood has resumed.		Three Line Strike Three consecutive bearish candlesticks, each closing at a new low, are followed by a bullish candlestick that opens at a new low and closes above the first day's open.
	Mat Hold A long bearish candlestick is followed by a gap and then by some small candlesticks forming a brief uptrend that does not exceed the high of the first candlestick. The fifth bearish candlestick gaps downward and closes at a new low. It confirms that the bearish mood has resumed.