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Final Candlestick Patterns Guide

The document provides a comprehensive guide to various candlestick patterns used in Forex trading, including Doji, Hammer, Hanging Man, Engulfing, Morning Star, Evening Star, Shooting Star, Bullish Harami, and Bearish Harami. Each pattern includes descriptions, trading signals, and notes on potential fakeouts and stronger signals based on market conditions. The guide emphasizes the importance of confirmation and volume when trading these patterns.

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223 views3 pages

Final Candlestick Patterns Guide

The document provides a comprehensive guide to various candlestick patterns used in Forex trading, including Doji, Hammer, Hanging Man, Engulfing, Morning Star, Evening Star, Shooting Star, Bullish Harami, and Bearish Harami. Each pattern includes descriptions, trading signals, and notes on potential fakeouts and stronger signals based on market conditions. The guide emphasizes the importance of confirmation and volume when trading these patterns.

Uploaded by

ulalaulalaa7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Complete Guide to Candlestick Patterns in Forex

Doji Candlestick Pattern


- Tiny body (open approximately equal to close), with long upper and lower shadows.

- Appears after a strong trend or in sideways markets.

- Buy if Doji appears after a downtrend and is followed by a strong bullish candle.

- Sell if Doji appears after an uptrend and is followed by a strong bearish candle.

- Fakeouts occur if there is no confirmation or multiple Dojis in a row.

- Stronger signals occur near support/resistance with volume confirmation.

Hammer Candlestick Pattern


- Small body at top, long lower wick, signals rejection of lower prices.

- Appears at the bottom of a downtrend.

- Buy when followed by a strong bullish candle at support zone.

- Fakeout if body/wick ratio is low or no volume confirmation.

- Not typically a sell signal.

- Stronger if appears after a sharp drop or news flush.

Hanging Man Candlestick Pattern


- Same shape as Hammer but appears after an uptrend.

- Indicates weakening buying pressure.

- Sell when followed by bearish candle closing below its body.

- Avoid if next candle is bullish or on low volume.

- Not reliable as a buy signal.

- Stronger with a bearish engulfing or volume spike.

Bullish Engulfing Pattern


- Large green candle completely engulfs a small red one.
- Occurs at the end of a downtrend.

- Buy confirmation if next candle closes higher.

- Fakeouts happen in ranging markets without volume.

- Best near support zones or after bearish exhaustion.

Bearish Engulfing Pattern


- Large red candle completely engulfs a small green one.

- Occurs at the top of an uptrend.

- Sell when followed by bearish continuation.

- Fakeouts without confirmation or at weak resistance.

- Stronger with high volume or overbought conditions.

Morning Star Pattern


- Three-candle pattern: long red, small body (often Doji), then long green.

- Appears at the end of a downtrend.

- Buy if third candle closes above midpoint of the first.

- Fakeouts if second candle is too large or no follow-through.

- Stronger with support zone or increasing volume.

Evening Star Pattern


- Three-candle pattern: long green, small body, then long red.

- Appears at the top of an uptrend.

- Sell if third candle closes below midpoint of first.

- Fakeouts if no confirmation or low volume.

- Best after strong uptrend near resistance.

Shooting Star Pattern


- Small body near bottom with long upper wick.

- Occurs after an uptrend.


- Sell on confirmation candle closing below body.

- Fakeouts if price closes above wick or on low volume.

- Stronger near resistance or after gap up.

Bullish Harami Pattern


- Small green candle inside a large red one.

- Occurs after a downtrend.

- Buy if followed by bullish confirmation.

- Fakeouts in choppy markets or without follow-up candle.

- Stronger when aligned with trend reversal signs.

Bearish Harami Pattern


- Small red candle inside a large green one.

- Occurs after an uptrend.

- Sell if confirmed by bearish candle.

- Fakeouts if continuation or weak candle follows.

- Stronger at resistance or with bearish divergence.

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