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INDICATOR#1
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Abandoned Baby

Pattern: Reversal
        Trend: Bullish
        Reliability: High



      How to Identify it

        * First day is usually a long black day
        * Second day is a doji that gaps in the direction of the previous trend
        * The third day is a white day, gapping in the opposite direction, with no overlapping shadows

   What it Means

    In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal is given by the white third day, and is well defined by the upward gap.

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INDICATOR#2
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   Belt Hold

        Pattern: Reversal
        Trend: Bullish
        Reliability: Low

         

      How to Identify it

        * A white body occurs in a downtrend with no lower shadow

   What it Means

    In a downtrend, a white body occurs with an open that is also the low for the day. This may signify a rally for the bulls.

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INDICATOR#3
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Breakaway

        Pattern: Reversal
        Trend: Bullish
        Reliability: Moderate

         

      How to Identify it

        * The first day is a long black day
        * The second day is a black day that gaps below the first day
        * The third and fourth days continue to in the direction of the second with lower consecutive closes
        * The fifth day is a long white day that closes into the gap between the first and second days

   What it Means

    A downtrend sees prices bottoming out and leveling off. The result is a long white day which does not close the gap into the body of the first day. This suggests a short term reversal.

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INDICATOR#4
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Concealing Baby Swallow

    Pattern: Reversal
    Trend: Bullish
    Reliability: High



  How to Identify it

    * The first two days are Black Marubozu days
    * The third day is black day that gaps downward, but trades into the body of the second day
    * The fourth day is a Black Marubozu day that engulfs the third day

   What it Means

In a strong downtrend, highlighted by two consecutive Black Marubozu days, a gapping black day trades into the body of the previous day. The last day, another Black Marubozu, shows investors selling off, as it closes at a new low. This provides an opening for the shorts to cover their positions. A bullish reversal should ensue.

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INDICATOR#5
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Doji Star


        Pattern: Reversal
        Trend: Bullish
        Reliability: Moderate

    

      How to Identify it

        * First day is a long black day
        * Second day is a doji that gaps in the direction of the previous trend
        * The shadows of the doji should not be long

   What it Means

    In a downtrend, the market bolsters the bears with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions have been changed. Confirmation of the trend reversal would be a higher open on the next trading day.

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INDICATOR#6
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Engulfing

    Pattern: Reversal
    Trend: Bullish
    Reliability: Moderate

     

  How to Identify it

    * A long black day occurs
    * The second day is a white that completely engulfs the real body of the first day

   What it Means

Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day’s open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three Outside patterns.

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INDICATOR#7
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Inverted Hammer / Gravestone Doji


        Pattern: Reversal
        Trend: Bullish
        Reliability: Low/Moderate

    

      How to Identify it

        * Small real body at the lower end of the trading range
        * Upper shadow usually no more than twice as long as the real body
        * No (or almost no) lower shadow

   What it Means

    As the market opens below the close of the previous day, the bulls rally briefly, but not enough to close above the previous day’s close. As this leaves shorts in a losing position, the Inverted Hammer presents the potential for an upcoming rally. Confirmation of the trend reversal would by an opening above the body of the Inverted Hammer on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than an Inverted Hammer.

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INDICATOR#8
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Hammer / Dragonfly Doji

        Pattern: Reversal
        Trend: Bullish
        Reliability: Low/Moderate

    

      How to Identify it

        * Small real body at the upper end of the trading range
        * Lower shadow at least twice as long as the real body
        * No (or almost no) upper shadow

   What it Means

    There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (the close is higher than the open price). Since the certainty for a Hammer indicator is low, the trend reversal can be confirmed by a higher open and an even higher close on the next trading day. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hammer.

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INDICATOR#9
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Harami

    Pattern: Reversal
    Trend: Bullish
    Reliability: Low



  How to Identify it

    * A long black day occurs
    * The second day is a white day where the real body is completely engulfed by the real body of the first

   What it Means

After a long black day at the low end of a downtrend, a white candlestick opens higher than the previous day’s close. The price is driven up, as many shorts are covered, which encourages further buy-ins. The Harami indicator should be confirmed with the next trading day’s candlestick following the reversal trend. The Harami pattern is also the first two days of the Three Inside patterns.

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INDICATOR#10
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Harami Cross

    Pattern: Reversal
    Trend: Bullish
    Reliability: Low



  How to Identify it

    * A long black day occurs
    * The second day is a doji within the real body of the previous day

   What it Means


After a long black day at the low end of a downtrend, the market opens higher than the previous day’s close and closes at the open. The Harami Cross indicator is more definite than the basic Harami indcator, and signifies a reversal for the bulls.

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INDICATOR#11
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Homing Pigeon


    Pattern: Reversal
    Trend: Bullish
    Reliability: Moderate



  How to Identify it

    * The first day is a long black day
    * The second day is a smaller black day that is within the body of the first day

   What it Means

In a downtrend, the bears continue to have their way. However, the second day opening and closing within the body of the first day suggests an erosion of the downtrend. Ensuing sell-offs, followed by buy-ins could result in a bullish reversal.

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INDICATOR#12
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Kicking


    Pattern: Reversal
    Trend: Bullish
    Reliability: High

     

  How to Identify it

    * The first day is a Black Marubuzo day
    * The second day is a White Marubuzo day that gaps upward

   What it Means

This pattern is a strong sign that the market is headed upward. With this indicator, the previous market direction is not as important as with other indicators.

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INDICATOR#13
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Ladder Bottom

        Pattern: Reversal
        Trend: Bullish
        Reliability: Moderate

    

      How to Identify it

        * Three black days occur with consecutively lower opens and closes
        * The fourth day is black with some upper shadow
        * The fifth day is a white day that opens above the body of the fourth day

       What it Means

    In a considerable downtrend, the shorts may have a chance to sell and take in any profits by the fourth day. This results in a gap upward on the fifth day. If the body of the fifth day is long, or the volume of trading is high, a bullish reversal has likely occurred.

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INDICATOR#14
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Mat Hold

        Pattern: Continuation
        Trend: Bullish
        Reliability: High

    

      How to Identify it

        * The first day is a long white day
        * The second day gaps up and is a black day
        * The second, third, and fourth days have small real bodies and follow a brief downtrend pattern, but stay within the range of the first day
        * The fifth day is a long white day that closes above the close of the first day

   What it Means

    The Mat Hold pattern is similar to the Rising Three Methods pattern. In an uptrend, a long white day occurs, following by three days of small real bodies that fall into a short downtrend. On the fifth day, the bulls come in strong to close at a new high. It appears that attempts to reverse the trend occurred, but failed. The upward trend should continue.

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INDICATOR#15
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Matching Low

        Pattern: Reversal
        Trend: Bullish
        Reliability: Moderate

    

      How to Identify it

        * The first day is a long black day
        * The second day is a black day with a close equivalent to the first day’s close

       What it Means

    In a downtrend two black days occur with equal closes. This suggests short-term support, and can cause a reversal on the next day of trading.