Nivesh Nukkad

1. Hammer

The hammer candlestick pattern is formed of a short body

with a long lower wick, and is found at bottom of a downward
trend.
A hammer shows that although there were selling pressure
during the day, ultimately a strong buying pressure pulls the
back up. The colour of the body can vary, but green hammer
indicate a stronger bull market than a red hammer.
High trading volume accompanying the formation of a
hammer candlestick can further strengthen its significance as
a bullish reversal signal.
It's important to consider the broader market context and
other technical indicators when interpreting the hammer
candlestick pattern to avoid false signals and increase its
effectiveness in trading decisions.
 2. Inverted Hammer

The only difference between hammer and inverted hammer

is being that the upper wick is long, while the lower wick is
short.
It indicates a buying pressure, followed by selling pressure
that was not strong enough to drive the market price down.
The inverse hammer suggets that buyer will soon have
control of the market.
Similar to the regular hammer pattern, traders often look for
confirmation signals after the formation of an inverted
hammer. A lower close in the subsequent trading session can
validate the bearish reversal indicated by the pattern.
There are variations of the inverted hammer candlestick
pattern, such as the shooting star, which has a similar shape
but appears at the top of an uptrend and carries similar
implications for a potential trend reversal.
 3. Bullish Engulfing

The bullish engulfing pattern is formed of two candlestick.

The first candle is short red body that is completely engulfed
by a longer green candle.

Though the second day open lower than the first day, the
bullish market pushes the price up, culminating in an obvious
win for the buyers.

The size of the bullish candlestick that engulfs the preceding

bearish candlestick is significant. The larger the bullish
candlestick relative to the bearish one, the stronger the
bullish reversal signal.

While the bullish engulfing pattern is commonly used on daily

charts, it can also be observed on shorter or longer
timeframes, providing valuable insights into potential bullish
reversals across different trading intervals.
 4. Piercing Line

The piercing line ia also a two stick pattern, amde up of long

red candle, followed by a long green candle.

There is usually a significant gap between the first candlestick

closing price and the green candlestick opening. It indicates a
strong buying pressure, as a price is pushed up to or above
the mid-price of the previous day.

The piercing line pattern is considered a moderately strong

bullish reversal signal. While not as potent as patterns like the
bullish engulfing, it still carries significance, especially when
observed in conjunction with other bullish indicators.
 5. Morning Star

The morning star candlestick pattern is considered a sign of

hope in a bleak market downtrend. It is a three stick pattern :
one short bodied candle between a long red and long green
candle.

The Morning Star pattern can be observed on various

timeframes, including daily, weekly, or even intraday charts.
The significance of the pattern may vary depending on the
timeframe in which it appears, with patterns observed on
higher timeframes often considered more reliable.

When trading based on the Morning Star pattern, traders

often set stop-loss orders below the low of the third
candlestick to manage risk.
 6. Three White Soldiers

The three white soldier occurs over three days. It consists of

consecutive long green candle with small wick, which open
and closes progressively higher than the previous day.

It is very strong bullish signal that occur after a downtrend,

and shows a steady advance of buying pressure.

The ideal Three White Soldiers pattern consists of three

relatively long-bodied candlesticks with minimal or no upper
shadows. Each candlestick should open within the body of
the previous candlestick and close near its high, reflecting
sustained buying pressure throughout the trading sessions.
 7. Rising Three Methods

It is the bullish pattern called as rising three method

candlestick pattern. It comprises of three short red
sandwiched within the range of two long green. The pattern
shows the trader that, despite some seeling pressure, buyers
are retaining control of the market.

While the Rising Three Method pattern is considered a

bullish continuation signal, it's essential to exercise caution
and consider other factors, such as market fundamentals
and potential resistance levels, before making trading
decisions. False signals and market reversals can still occur,
so prudent risk management is crucial.
 8. Spinning Top

A spinning top is a candlestick pattern characterized by a

small real body with upper and lower shadows of roughly
equal length. When a spinning top appears after a downtrend,
it can indicate indecision in the market. However, if it occurs
within an uptrend, it may suggest that buyers are still present
despite some uncertainty.

While a bearish spinning top may indicate a potential reversal

of an downtrend, traders often look for confirmation from
other technical indicators or chart patterns before taking
action. This confirmation can help validate the potential
reversal and increase the reliability of the signal.
 9. Bullish Belt Hold

The Belt Hold Line candlestick pattern is considered a minor

trend reversal pattern that can indicate a bullish or bearish
trend reversal, depending on the nature of the pattern and
direction of the trend in which it appears. The Japanese name
for the pattern is yorikiri, which is term used in sumo
wrestling that translates loosely to "pushing your opponent
out of the ring while holding onto his belt". This is a good
description of the pattern.

The Belt Hold Line pattern is a single candlestick pattern that

almost takes the form of a Marubozu candlestick in that it is
has a large real body, which indicates the extent of the
strength of bullish or bearish activity during the session.
However, the Belt Hold Line is only shaven at the end at
which it opened, and is called an Opening Bozu.
 10. Bullish Harami

This pattern consists of two candlesticks, where the first

candlestick is a long bearish candle, followed by a smaller
bullish candlestick that is entirely engulfed within the range
of the previous candlestick. It indicates a potential reversal of
a downtrend, with the smaller bullish candlestick
representing a period of consolidation before a potential
uptrend.
Traders often seek confirmation from other technical
indicators or chart patterns before considering the Bullish
Harami as a strong buy signal. Confirmation could come from
increased trading volume accompanying the pattern or a
subsequent bullish candlestick forming after the Bullish
Harami.
 11. Bullish Marubozu

This pattern is characterized by a single long-bodied

candlestick with little to no shadows, indicating a strong
bullish sentiment throughout the entire trading session. The
absence of shadows suggests that buyers were in control
from the opening to the closing of the session, potentially
signaling a continuation of an existing uptrend.
The absence of shadows in the Bullish Marubozu pattern
indicates that there was little to no price retracement during
the trading session. This can create a sense of confidence and
optimism among traders, as it suggests that buyers were
strong and consistent throughout the session, pushing prices
higher without hesitation.
 12. Bullish Dragonfly Doji

This pattern consists of a single candlestick with a small real

body and a long lower shadow but no upper shadow. It
suggests that despite some initial selling pressure, buyers
were able to push the price higher by the end of the session,
potentially indicating a bullish reversal.

The Bullish Dragonfly Doji pattern reflects a battle between

buyers and sellers, with sellers initially pushing the price
lower but ultimately failing to maintain control. The long
lower shadow indicates that buyers stepped in to buy at
lower prices, suggesting a shift in market sentiment towards
bullishness.
It's essential for traders to manage risk effectively when
trading based on the Bullish Dragonfly Doji pattern. Setting
stop-loss orders below the low of the candlestick or using
other risk management techniques can help protect against
potential losses if the market doesn't behave as expected.
 13. Bullish Kicker

This pattern consists of two candlesticks, where the first

candlestick is bearish and the second candlestick is bullish,
opening below the low of the previous candlestick and
closing higher. It suggests a sudden shift from bearish to
bullish sentiment and can indicate a potential reversal of a
downtrend.

Key features of the Bullish Kicker include:

1. Gap Up: The second candlestick in the Bullish Kicker pattern
opens lower than the previous candlestick's low, creating a
gap down between the two candlesticks. However, the bullish
momentum is so strong that the price quickly reverses and
closes higher than the previous candlestick's high,
completely engulfing its body.
2. Strong Buying Pressure: The Bullish Kicker pattern suggests a
sudden shift from bearish to bullish sentiment, with buyers
overpowering sellers and pushing the price significantly
higher in a short period. This strong buying pressure often
indicates the potential for a bullish reversal in the market.
 14. Bullish Homing Pigeon

This pattern consists of two candlesticks, where the first

candlestick is a large bearish candle followed by a smaller
bullish candlestick with a body that is completely engulfed
within the range of the previous candlestick. It suggests a
potential reversal from a downtrend to an uptrend.

Key features of the Bullish Homing Pigeon include:

1. Engulfing Body: The body of the smaller bullish
candlestick is completely engulfed within the range of
the previous bearish candlestick, indicating a potential
shift in market sentiment from bearish to bullish.
2. Reversal Signal: The Bullish Homing Pigeon pattern
suggests that despite strong selling pressure during the
first candlestick, buyers were able to step in and push
the price higher by the session's close. This reversal in
momentum may signal the potential for a bullish
reversal in the market.