Lets go on with candlestick reversal patterns. To see the previously discussed patterns, check this.
Gosh, people have really put great names to the patterns, haven’t they? Okay, going on now. This pattern looks pretty much the same as Morning and Evening Doji Stars, but the Doji here must also have a gap from the shadows of the first and third body. So that the Doji sort of looks like .... an abandoned baby, what else can I say :D
Upside Gap Two Crows
This is only a bearish pattern. The first candlestick should be empty and there should be a gap both between first and second and also first and third candlestick. The third day should open higher and close lower than the second day. These two candlesticks should be both filled.
This means that two long candlesticks, of which one is empty and one is filled have the same closing price.
Unique Three River Bottom
This is one very unique pattern that doesn’t form too often but when it does, it’s a good signal. It’s a bullish pattern where the first body is long filled body, second body opens higher than the previous close, makes a new low compared to the first day and closes near the high of the day. Third day now opens lower than the second day’s body but higher than the second day’s low and closes below the close of the second day. Huh, getting confusing hehe? Nah, just keep reading.
Three white soldiers & Three Black Crows
See the image and you’ll understand why this pattern is called 3 white soldiers. Basically it’s 3 long candlesticks that close higher every day. Ideally the prices open in the middle of the previous day’s body. Note that the upper shadows shouldn’t be too long meaning that the day’s close should be quite close to the day’s high. NOTE THAT THIS PATTERN OCCURS IN A DOWNTREND. Three Black Crows is exactly the opposite pattern.
Identical Three Crows
It’s special case of the three black crows pattern – each day opens exactly or almost exactly at the previous day’s close. This pattern occurs in uptrend.
This pattern stems from the three white soldiers. However, it is different in a way that this pattern now occurs in uptrend and it looks a bit different. All days need to close a bit higher than the previous day and open within the previous day’s body, the shadows on the second and third day should be quite long. Each body is smaller than the previous.
This pattern again looks like the three white soldiers but the third soldier seems to be a bit crippled (smaller body or a star and with shorter shadows) and gapped compared to the second soldier. Note that the two first soldiers do not neccessarily need to be the same length, even though they both need to be long.