1 Price-Bar Pattern
• Long Lower Shadow
-
Bullish signal
-
Lower shadow must be at least the size of the real body
-
Longer lower shadow: more reliable that it is a bullish
trend
trend
-
Bearish signal
-
Upper shadow must be at least the size of the real body
-
Longer upper shadow: more reliable that it is a bearish
Hammer
• Found in downtrend
• Short body at the top of price range
• Little to no upper shadow
• Lower shadow must be at least
twice the length of real-body
• Signals: Reversal pattern when
found in a downtrend
• Short-term outlook indication
• Real body can be black or white
(white: stronger sign
– Bullish gap for next session
– Subsequent session shows white real body above that of
the hammer’s real body
\
• Found in uptrend
• Found
in downtrend
• Short body in
the middle of two long
Hammer
• Low reliability, requires confirmation– Bullish gap for next session
– Subsequent session shows white real body above that of
the hammer’s real body
\Hanging Man
• Found in
uptrend
• Short body at
the top of price range
• Little to no
upper shadow
• Lower shadow
must be at least
twice the
length of real-body
• Warning of a
potential downward
• Short-term
outlook indication
• Also requires confirmation
Hanging Man
Shooting Star
• Found in uptrend
• Short body at
the bottom of price
range
• Little to no
lower shadow
• Upper shadow
must be at least
twice the
length of real-body
• Signals:
Reversal pattern
• Short-term
outlook indication
• Real body can
be black or white
(black: stronger signal)
Shooting Star
• Low
reliability, requires confirmation
– Bearish gap
for next session
– Subsequent
session shows black real body below that of
the shooting star’s real body
Inverted Hammer
• Short
body at the bottom of price
range
• Little
to no lower shadow
• Upper
shadow must be at least
twice
the length of real-body
• Signals:
Reversal pattern
• Short-term
outlook indication
• Real
body can be black or white
(white: stronger signal)
(white: stronger signal)
Inverted Hammer
Spinning Top & Doji
wicks
• Market closed
relatively unchanged
• Indicates
indecision (‘standoff’ after
significant
price movement)
• Trend losing
momentum; possible
turning point
• Doji/
Long-legged Doji: stronger
signal
• Open and
close are the same
• Insignificant in sideway markets
More Doji Patterns
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