The Upside Gap Two Crows

Upside Gap Two Crows
The Upside Gap Two Crows Pattern

The Upside Gap Two Crows pattern is a rare candlestick pattern that is similar to the evening star pattern and the engulfing pattern, but with a few significant differences. Like the Evening Star pattern, the Upside Gap Two Crows pattern is a bearish top reversal pattern that consists of three candlesticks. The first candlestick in the pattern must be a bullish candlestick with a large real body and must be light in color. This bullish candlestick is followed by two smaller bearish candlesticks that almost form an engulfing pattern, except that they are both bearish and hence dark in color. The first bearish candlestick that follows the bullish candlestick must have an upside gap between its real body and the real body of the bullish candlestick, as is the case with the evening star pattern. However, the last candlestick in the pattern must open above the real body of the middle candlestick and must close below it to completely engulf the real body of the second candlestick. Where the upside-gap two crows pattern differs from the evening star pattern is in the last candlestick, which need not penetrate and close well into the real body of the first candlestick.

As the upside-gap two crows pattern is a bearish trend reversal pattern, it is only valid if it appears in an uptrend. As with most trend reversal patterns, the upside-gap two crows pattern is more significant when it appears on or near a trend line or support and resistance line.

Hanging Man / Hammer

Hammer Pattern
Hammer Candlestick

The Hanging Man and Hammer candlestick patterns are related trend reversal patterns that may appear at the end of an uptend or downtrend respectively. This is a single candlestick pattern that with a short real body, little or no upper shadow and a long lower shadow that must be at least twice as long as length of the real body. The color of the candle is not import, only its location in the current trend.

The Hammer pattern is called a takuri in Japanese, which means testing the water for its depth. This is the bullish version of the pattern. A bearish ...

Three Black Crows

Three Black Crows
Three Black Crows

The Three Black Crows pattern is the bearish counterpart of the Three Advancing White Soldiers pattern. It is a reversal pattern that consists of three bearish candlesticks that should come into consideration when it appears within an established uptrend, where it indicates a weakness in the uptrend and, potentially, the beginning of a down trend.

Each of the three candlesticks in the Three Black Crows pattern should be relatively long bearish candlesticks with little or no lower shadows. Each of the candlesticks in this pattern should mark a steady decline in ...

Engulfing Pattern

Bullish Engulfing Pattern
Bullish Engulfing

The Engulfing pattern is a reversal candlestick pattern that can appear at the end of an uptrend or at the end of a downtrend. The first candlestick in this pattern is characterized by a small body and is followed by a larger candlestick whose body completely engulfs the previous candlestick's body.

The colors of the candlesticks that make up the engulfing pattern are important. When the engulfing pattern appears at the end an uptrend, it is a bearish reversal signal and indicates a weakness in the uptrend and ...

Tweezers Pattern

Tweezers Top
Tweezers Top

The Tweezers Top and Tweezers Bottom patterns are minor trend reversal patterns that consist of two candlesticks with the same approximate high or the same approximate low respectively. The two candlesticks should have alternating colors with the first confirming the current trend and the second indicating a weakness in the trend. The reliability of these patterns increase when the first candlestick is has a large real body while the second candlestick has a short real body.

In the Tweezers Top pattern, the first candlestick should be a bullish candlestick with a ...

Continuation Patterns

Continuation Patterns
Three Methods

Continuation patterns indicate that there is a greater probability of the continuation of a trend than a trend reversal.. These patterns are generally formed when the price action enters a consolidation phase during a pre-existing trend. During the consolidation phase, the trend appears to change; however, the continuation of the preceding trend is more probable.

Some of the common continuation patterns include the cup and handle pattern, flags and pennants, symmetrical triangles, ascending triangle and desc...

Reversal Patterns

Trend Reversal Patterns
Harami Pattern

Reversal patterns mark the turning point of an existing trend and are good indicators for taking profit or reversing your position. Generally, trend reversal patterns indicate that a support level in a downtrend or a resistance level in an uptrend will hold and that the pre-existing trend will start to reverse. These patterns allow you to enter early in the establishment of the new trend and are usually result in very profitable trades.

The common reversal patterns include the double tops and double bottoms, triple tops and triple bottoms, broadening tops and broadening bottoms, ...

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