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INDICATOR#16
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    Hanging Man / Dragonfly Doji


        Pattern: Reversal
        Trend: Bearish
        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 an uptrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies the potential for further sell-offs. Since the certainty for a Hanging Man indicator is low, the trend reversal can be confirmed by a black candlestick or a large down gap on the next trading day accompanied by a lower close. 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 Hanging Man.

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INDICATOR#17
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Harami


    Pattern: Reversal
    Trend: Bearish
    Reliability: Low

     

How to Identify it

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

What it Means

After a long white day at the high end of an uptrend, a black candlestick opens lower than the previous day’s close. Trading is typically light and the day ends with a close lower than the open and within body of the first day; a signal that the current uptrend is losing strength. 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#18
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   Harami Cross


        Pattern: Reversal
        Trend: Bearish
        Reliability: Moderate

    

    How to Identify it

        * A long white day occurs
        * The second day is a doji that is within the range of the previous day’s real body

   What it Means

    After a long white day at the high end of an uptrend, the market opens lower than the previous day’s close. Trading is typically light and the day ends with a close at the same price as the open and within body of the first day; an even stronger signal than the basic Harami pattern that the current uptrend is losing strength.

     

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INDICATOR#19
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         Identical Three Crows


        Pattern: Reversal
        Trend: Bearish
        Reliability: High



         

   How to Identify it

        * Three black days occur, each with a close below the previous day
        * Each day opens at the close of the previous day

    What it Means

    In an uptrend three long black days occur that open at the previous day’s close. This pattern is similar to the Three Black Crows pattern but typifies a more severe loss of buying power. A bearish trend is almost certain.

     

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INDICATOR#20
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  In Neck


        Pattern: Continuation
        Trend: Bearish
        Reliability: Moderate

         

   How to Identify it

        * The first day is a long black day
        * The second is a white day that opens below the low of the previous day and closes barely above or equal to the close of the previous day

   What it Means

    The In Neck pattern is a less severe relative of the On Neck pattern. A small rally is built by the second day, but ends near the close of the previous black day. Although, as in the case of the On Neck pattern, the downtrend should prevail, it may take longer to evolve.

     

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INDICATOR#21
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   Kicking

        Pattern: Reversal
        Trend: Bearish
        Reliability: High

         

    How to Identify it

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

   What it Means

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

     

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INDICATOR#22
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Meeting Lines


    Pattern: Reversal
    Trend: Bearish
    Reliability: Moderate

     

How to Identify it

    * The first day is a long white day, and has a body that is above the previous trend
    * The second day is a long black day, and has a body that is also above the previous trend.
    * Both days have identical closes

What it Means

In an uptrend two days open above the previous trend. Even though the second day opens high, it rallies to close at the close of the previous day. This typically means a benchmark has be defined by traders, and a reversal is likely. The bearish Meeting Lines pattern is similar to, but less reliable than the Dark Cloud Cover pattern.

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INDICATOR#23
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On Neck

    Pattern: Continuation
    Trend: Bearish
    Reliability: Moderate

     

How to Identify it

    * The first day is a long black day
    * The second is a white day (not long) that opens below the low of the previous day and closes at the low of the previous day

What it Means

The On Neck pattern is typical in a downtrend. The fact that a small rally is built by the second day, but ends at the low of the previous black day indicates that the bears should prevail.

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INDICATOR#24
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    Separating Lines


        Pattern: Continuation
        Trend: Bearish
        Reliability: Low

         

    How to Identify it

        * The first day is a white day
        * The second day is a black day that has the same opening price as the first day

   What it Means

    In downtrend a long white day occurs. The second day, however, picks up where the previous day’s trading left off and rallies to close lower. This suggests that the downtrend should remain intact.

     

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INDICATOR#25
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  Side-by-Side White Lines

    Pattern: Continuation
    Trend: Bearish
    Reliability: Moderate

     

How to Identify it

    * The first day is a black day
    * The second day is a white day that gaps down
    * The third day is a white day of about the same body length and close as the second day

What it Means

In a downtrend a black day is followed by two white that are gapped below the first day. This typically means the shorts are covering their positions, and no reversal is about to occur. The downtrend should remain intact for the near future.

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INDICATOR#26
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Three Black Crows


    Pattern: Reversal
    Trend: Bearish
    Reliability: High

     

How to Identify it

    * Three black days occur, each with a close below the previous day
    * Each day opens within the body of the previous day
    * Each day closes near or at its lows

What it Means

In an uptrend three long black days occur with consecutively lower closes. This pattern suggests that the market has been at a high price for too long, and investors are beginning to compensate for it.

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INDICATOR#27
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   Three Inside Down

        Pattern: Reversal
        Trend: Bearish
        Reliability: High

         

   How to Identify it

        * A bearish Harami pattern occurs in the first two days
        * The third day is a black day with a lower close than the second day

   What it Means

    This pattern is a more reliable addition to the standard Harami pattern. The third day is confirmation of the bearish trend reversal.

     

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INDICATOR#28
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Three-Line Strike

    Pattern: Continuation
    Trend: Bearish
    Reliability: Low

     

How to Identify it

    * Three long black days occur with consecutively lower closes
    * The fourth day opens lower, but closes above the open of the first day

What it Means

The white day drives prices back to where they were at the start of the pattern. If the bearish trend was strong before the pattern, then it should continue.

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INDICATOR#29
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    Three Outside Down

        Pattern: Reversal
        Trend: Bearish
        Reliability: High

        

   How to Identify it

        * A bearish Engulfing pattern occurs in the first two days
        * The third day is a black day with a lower close than the second day

   What it Means

    This pattern is a more reliable addition to the standard Engulfing pattern. The third day is confirmation of the bearish trend reversal.

     

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INDICATOR#30
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    Thrusting

        Pattern: Continuation
        Trend: Bearish
        Reliability: Low

         

    How to Identify it

        * The first day is a long black day
        * The second is a white day that opens below the low of the previous day and closes into the body of the previous day, but below the midpoint

    What it Means

    The Thrusting pattern is a weaker relative of the On Neck and In Neck continuation patterns. A rally is built by the second day, and closes well into the body of the previous black day. However, since the second day’s close doesn’t even reach the midpoint of the first day’s body, the bulls will likely be discouraged and the downtrend will continue.