Written

By:UMERFAROOQAWAN
LEARNINGACADEMY

CONTENTS
About the Authors
.............................................................................................................
......................... 3 Introduction
.............................................................................................................
..................................... 4 What is A Candlestick Pattern ?
...........................................................................................................
5 Bullish Reversal Candlestick Pattern
.................................................................................................. 6

Hammer
...........................................................................................................................
...................,.....,. 6 Bullish Engulfing Pattern
..................................................................................................................,........
7 Piercing Pattern
...........................................................................................................................
............... 8 Tweezer Bottom
...........................................................................................................................
.............. 9 Morning Star
...........................................................................................................................
.................... 10

How To Find Bullish Reversal Pattern In Chart

.............................................................................. 11

Hammer
...........................................................................................................................
........................... 11 Bullish Engulfing Pattern
...........................................................................................................................
12 Piercing Pattern
...........................................................................................................................
............... 12 Tweezer Bottom
...........................................................................................................................
.............. 12 Morning Star
...........................................................................................................................
.................... 13

Bearish Reversal Candlestick Patterns

................................................................................................ 14

Shooting
Star.....................................................................................................................
........................... 14
Bearish Engulfing Pattern
..........................................................................................................................
15
Dark Cloud Cover
...........................................................................................................................
............. 16
Evening Star
...........................................................................................................................
..................... 17
Tweezer Top
...........................................................................................................................
..................... 18

How To Find Bearish Reversal Pattern In Chart

.............................................................................. 19

Bearish Engulfing
Patttern...............................................................................................................
........... 19
Evening Star
...........................................................................................................................
...................... 19
Dark Cloud Cover
...........................................................................................................................
............ 20
Tweezer Top
...........................................................................................................................
..................... 20
Shooting Star
...........................................................................................................................
.................... 20

Neutral Candlesticks Pattern

.............................................................................................................
....... 21

Spinning Top
...........................................................................................................................
..................... 21 Doji Candle
...........................................................................................................................
........................ 22

Continuation Candlestick Pattern

.............................................................................................................
23

Rising Three Method

...........................................................................................................................
........... 23
Falling Three Method
...........................................................................................................................
.......... 24
Bullish Harami
...........................................................................................................................
...................... 25
Bearish Harami
...........................................................................................................................
.................... 26

How To Find Continuation Candlestick

Pattern................................................................................... 27

Bearish Harami
...........................................................................................................................
.................... 27 Bullish Harami
...........................................................................................................................
..................... 27 Falling Three Method
...........................................................................................................................
......... 28 Rising Three Method
...........................................................................................................................
.......... 28

Candlestick Patterns Cheat Sheet

How To Understand Any Candlestick Pattern Without
Memorizing A Single One.............. 29 1.The Color Of The Body
Tells you Who's In Control
.............................................................................. 29 2.The Length
Of The Wick Represents Price Rejection
.......................................................................... 30 3.The Size/Ratio
Of The Body To The Wick Tells You " Whole Story " OR "
Psychology..... 31- 32
Japanese candlestick chart patterns originated from a Japanese rice trader
called Munehis Homma during 1700s.

Almost 300 year's later .

It was introduced to the western world by Steve Nison , In his book called
"Japanese Candlestick Charting Techniques"
Now, it's likely the original ideas have been modified which now results in
the candlestick patterns you use today.
Anyway, that's the brief history behind Japanese candlestick patterns .
Moving on ..
Let's learn How to read A Candlestick Chart .

INTRODUCTION
Here's the thing:
There are many ways to read a Chart .
You can use Japanese Candlestick Chart , Renko Chart , Bar Chart , Line
Chart ,Heikin Ashi Chart , Point & Figure Chart , And etc
You're probably wondering:
" Which one should I use ?"
Well...
If you ask me , the most popular approach is ..
"CANDLESTICK CHART PATTERN "
Why?
Because it's easy to learn - and it works.
that's why I've created this monster guide to teach you everything you need
to know about Candlestick Patterns ( and how to trade it like pro ).

Here's what you'll learn:

What is A Candlestick Pattern ?

How Do You Read Japanese Candlestick Chart ?
Bullish Reversal Candlestick Pattern .
How To Find Bullish Reversal Pattern In Chart .
Bearish Reversal Candlestick Patterns .
How To Find Bearish Reversal Pattern In Chart .
Neutral Candlesticks Pattern .
Continuation Candlestick Pattern .
How To Find Continuation Candlestick Pattern .
How To Understand Any Candlestick Pattern Without Memorizing A Single
One.

Now ...
This is an extensive guide on Candlestick Chart Patterns (with almost 4000
words ). So, take your time to digest the materials and come back to it
whenever you need a refresher. Now Let's begin!

What is A Candlestick Pattern ?

Now, every Candlestick pattern has 4 data points . ( this is basically hint for
Trader you can read candle easily by focusing on these 4 data points ) OPEN
- The Price opening
CLOSE - The Price closing
HIGH - The highest price over a fixed time period LOW - The lowest price
over a fixed time period Here's What I mean .. ( Example )
upper shadow

( WICK )

( BULLISH )

(
BEARISH )

LOWER shadow

( WICK )

NOTICE :For a Bullish Candle , the open is always BELOW the close . For
a Bearish Candle , the open is always ABOVE the price .

Bullish Reversal Candlestick Pattern

Bullish Reversal candlestick patterns signify that buyers are momentarily in
control . However , it doesn't mean you should go long immediately when
you spot such a pattern because it doesn't offer you an " edge " in the
markets.
Instead , you want to combine candlestick patterns with other tools so you
can find a high probability trading setup ( more on that later )
For now , these are 5 Bullish reversal Candlestick chart patterns you should
know .
Hammer
Bullish Engulfing Pattern
Piercing Pattern
Tweezer Bottom
Morning Star

Let me Explain...

HAMMER :
A Hammer is a ( 1 Candle ) bullish reversal that forms after a decline in
price . Here's how to recognize :
Little to no upper shadow .

The price close at the top ( half ) of the range .

The lower shadow is about 2 Or 3 times the length of the body .

And this is what a Hammer means....

1. When the market opens, the seller took control and pushed price lower .
2.At the selling climax, huge buying pressure stepped in and pushed price
higher .
3.The buying pressure is so strong that it closed above the opening price .
In Short , A Hammer is a bullish reversal candlestick pattern that shows
rejection of lower prices .
Now , just because you see a Hammer doesn't mean that Trend will reverse
immediately you'll need more " confirmation " to increase the odds of the
trade working out and i'll cover that in details later .
Moving On.....

bullish engulfing pattern :

A Bullish Engulfing Pattern is a ( 2 Candle ) bullish reversal candlestick
pattern that form after a decline in price .
Here's how to recognize it :

The first candle has a bearish close .

The body of the second candle completely " covers" the body first candle (
without taking into consideration the shadow ).
The second candle close bullish .

And this is what a Bullish Engulfing pattern means:

1.On the first candle , the sellers are in control as they closed lower for the
period .
2.On the second candle, strong buying pressure stepped in and closed above
the pervious candle's high-- which tells you the buyers have won the battle
for now .
In essence, a Bullish Engulfing Pattern tells you the buyers have
overwhelmed the sellers and are now in control .
And lastly, a Hammer is usually a Bullish Engulfing Pattern on the lower
timeframe because of the way candlesticks are formed on multiple
timeframes . If you're not sure how it works , then go watch this video
below. Combine candlesticks video
Next...
piercing pattern :
A Piercing Pattern is a ( 2 Candle ) bullish reversal candlestick pattern that
form after a decline in price .
Unlike the Bullish Engulfing Pattern which closes above the pervious open
the Piercing Pattern closes within the body of the previous candle .
Thus in terms of strength the Piercing Pattern isn't as strong as the Bullish
Engulfing pattern .
Here's how to recognize it :

The first candle has a bearish close .

The body of the second candle closes beyond the halfway mark of the first
candle . The second candle close bullish .

And this is what a Bullish Engulfing pattern means..

1.On the first candle , the sellers are in control as they closed lower for the
period .
2.On the second candle, strong buying pressure stepped in and closed
bullishly ( more than 50% of the [previous body ) -- which tells you there
buying pressure around .
Next...
tweezer bottom :
When I mean Tweezer , I don't mean the tool use to pick you noise hair (
although it sure like it ). Instead.....
A Tweezer Bottom is a ( 2-candle ) reversal candlestick pattern that occurs
after a decline in price .
Thus in terms of strength the Piercing Pattern isn't as strong as the Bullish
Engulfing pattern .
Here's how to recognize it :
The first candle show rejection of lower prices .
The second candle re-test the low of the previous candle and closes higher .
And this is what a Tweezer Bottom means..

1. On the first candle , the sellers pushed price lower and were met with
some buying pressure .
2.On the second candle, the sellers again tried to push lower but failed and
was finally overwhelmed by strong buying pressure .
In short , a Tweexer Bottom tells you the market has difficulty trading lower
( after two attempts )and it's likely to head higher .
morning star :
A Morning Star is a ( 3 candle ) bullish reversal candlestick pattern that
forms after a decline in price .
Here's how to recognize it :

The first candle has a bearish close .

The second candle has a small ( Range ) .
The third candle closes aggressively higher (more than 50% of the first
candle )

And this is what a Morning Star means..

1. On the first shows , the sellers are in control as the price closes lower .
2.On the second candle, there is indecision in the markets as both the selling
and buying pressure are in equilibrium ( that's why the range of the candle is
small ) .
3. On the third candle , the buyers won the battle and the price closes higher
In short ,a Morning Star tells you the sellers are exhausted and the buyers are
momentarily in control .
How To Find Bullish Reversal Pattern In Chart
Great!
You've learned the different bullish reversal candlestick patterns .
Now, let's take it a step further and learn how to identify high probability
trading setups with it .
Recall:

You don't want to trade any candlestick patterns in isolation because it

doesn't offer an " edge " in the markets.
So here's how you do it...

1. If the market is trending higher , then wait for a pullback towards support .
2. If the price pullback towards support then wait for a bullish reversal
candlestick chart pattern .
3. If there's a bullish reversal candlestick chart pattern , then make sure the
size of it is larger then the earlier candles ( signaling strong rejection ) .
Here's are few cherry-picked examples :

hammer :

bullish engulfing pattern:

piercing pattern :

tweezer bottom :
morning star :

NOTE: There will be losing trades as well and this is not the " Holy Grail ".
Next Move ...

Bearish Reversal Candlestick Pattern

Bearish reversal candlestick patterns signify that sellers are momentarily in
control . Likewise , it doesn't mean you should go short immediately when
you spot such a pattern because it doesn't offer you an " edge " in the
markets.
Instead, you want to combine candlestick patterns with others tools so you
can find a high probability trading setup .
For now , these are 5 bearish reversal candlestick chart patterns you should
know :

Shooting Star
Evening Star
Dark Cloud Cover
Bearish Engulfing Pattern
Tweezer Top

shooting star :

A Shooting Star is a ( 1 candle ) bearish reversal pattern

that forms after an advanced in price .
Here's how to recognize it :

Little to no lower shadow .

The price closes at the bottom of the range .
The Upper shadow is about 2 Or 3 times the length of the body

And this is what a Shooting Star means..

1. When the market opens , the buyers took control and pushed price higher .

2. At the buying climax, huge selling pressure stepped in and pushed price
lower .
3. The selling pressure is so strong that it closed below the opening price . In
short ,a Shooting Star is a bearish reversal candlestick pattern that shows
rejection of higher prices
Now , just because you see a Shooting Star doesn't mean the trend will
reverse immediately .
You'll need more " confirmation " to increase the odds of the trade working
out and I'll cover that in details later .

Moving on ....

bearish engulfing pattern :

A Bearish Engulfing Pattern is a ( 2 candle ) bearish reversal candlestick
pattern that forms after an advanced in price .
Here's how to recognize it :

The first candle has a bullish close .

The body of the second candle completely " covers " the body first candle (
without taking into consideration the shadow )
The second candle closes bearish .

And this is what a Shooting Star means..

1. On the First candle , the buyers are in control as they closed higher for the
period .
2.On the second candle , strong selling pressure stepped in and closed below
the previous candle's low -- which tells you the sellers have won the battle
for now
In essence , a Bearish Engulfing Pattern tells you the sellers have
overwhelmed the buyers and are now in control .
Moving on ....

dark cloud cover :

A Dark Cloud Cover is a ( 2-candle ) reversal candlestick pattern that forms
after an advanced in price .
Unlike the Bearish Engulfing Pattern which closes below the previous open,
the Dark Cloud Cover closes within the body of the previous candle .
Thus in terms of strength , the Dark Cloud Cover isn't as Strong as the
Bearish Engulfing Pattern .
Here's how to recognize it :

The first candle has a bullish close .

The body of the second candle closes beyond the halfway mark of the first
candle . The second candle closes bearish .

And this is what a Dark Cloud Cover means..

1. On the First candle , the buyers are in control as they closed higher for the
period .
2.On the second candle ,selling pressure stepped in and it closed bearishly (
more then 50% of the previous body ) -- which tells you there are selling
pressure arround
Next
evening star :
An Evening Star is a (3 - Candle ) bearish reversal candlestick pattern that
forms after an advanced in price .
Here's how to recognize it :

The first candle has a Bullish close .

The second candle has a small (Range).
The third candle closes aggressively lower ( more than 50% of the first
candle ) .

And this is what an Evening Star means..

1. On the first candle ,it shows the buyers are in control as the price closes
higher .
2.On the second candle , there is indecision in the markets as both the selling
and buying pressure are in equilibrium ( that's why the range of the candle is
small )
3.On the third candle , the sellers won the battle and price closes lower

In short , An Evening Star tells you that buyers are exhausted and the sellers
are momentarily in control .
Moving On....

tweezer top :
A Tweezer Top is a ( 2 -Candle ) reversal candlestick chart pattern that
occurs after an advanced in price.
Here's how to recognize it:
The first candle shows rejection of higher prices.
The second candle re - test the high of the previous candle and closes lower.

And this is what a Tweezer Top means...

1.On the first candle, the buyers pushed the price higher and were met with
some selling pressure
2.On the second candle, the buyers again tried to push the price higher but
failed , and was finally overwhelmed by strong selling pressure .
In Short , A Tweezer Top tells you that market has difficulty trading higher (

after two attempts ) and it's likely to head lower .

How To Find bearish Reversal Pattern In Chart

Awesome !

You've just learned the differnt bearish reversal candlestick chart patterns .
Now, let's take it a step further and learn how to identify high probability
trading setups with it .

Here's how you do it ..

1. If the market is trending lower , then wait for a pullback towards

resistance .
2.If the price pullback towards Resistance , then wait for a bearish reversal
candlestick pattern .
3.If there's a bearish reversal candlestick pattern , then make sure the size of
it is larger then the earlier candles ( signaling strong rejection)
4.If there's a strong price rejection , then go short on next candle's open
5.And vice versa for long setups .

Here are a Few Cherry-picked examples :

bearish engulfing pattern :

evening star :

dark cloud cover :

TWEEZER TOP :

shooting star :
neutral candlestick patterns
Neutral Candlestick Patterns signify that both buying and selling pressure is
in equilibrium .
And these are 2 Neutral Candlestick Chart patterns that you should know:

Spinning Top
Doji
Let me explain....

spinning top :
A Spinning Top is an Neutral Candlestick chart pattern that where both
buying and selling pressure is fighting for taking control .

Here's how to recognize it :

The Candle as long upper and lower shadow .
The Candle has a small body .

And here's what a Spinning top means:

1. When the market opens. both the buyers and sellers aggressively tried to
gain control ( which results in upper and lower shadows )
2.At the end of the session , neither have gained the upper hand ( which
results in a small body )

In short , Spinning top shows signification volatility in the market but with

no clear winner . Moving On .....

LEARNINGACADEMY 21
doji candle :
A Doji Candle is represents Neutral in the markets as both buying and
selling pressure are in equilibrium .

Here's how to recognize it :

The Candle's open and close are around the middle of the Range .
The upper and Lower shadows are short and about the same length

Although Doji is a Neutral Candlestick Pattern , there are variations with

different Significance: There Are:
1.Dragonfly Doji
2.Gravestone Doji
I'll Explain ...

1.dragonfly doji :
Unlike a Regular Doji which open and close near the middle of the range .
the Dragonfly Doji open and close near the highs of the range with long
lower shadow.
This tells you there is a rejection of lower prices as buying pressure stepped
in and pushed the market higher towards the opening price .

1.Gravestone doji :
Unlike a Regular Doji which open and close near the middle of the range .
The Gravestone Doji closes open and closes near the lows of the range with
long upper shadow .

This tells you there is a rejection of higher prices as selling pressure stepped
in and pushed the market lower towards the opening price .
Moving on...

continuation candlestick patterns

Continuation Candlestick Patterns Signify that market is likely to continure
trading in the same direction.
And,If you're a trend trader, these Candlestick Patterns present some of the
best trading opportunities out there .
So here are 4 continuation patterns you Should Know :

Rising Three Method

Falling Three Method
Bullish Harami
Bearish Harami

Let me Explain....
rising three method :
The Rising Three Method is a bullish trend continuation pattern that signals
the market is likely to continue trending higher.
Here's how to recognize it :

The first candle is a larger bullish candle .

The second, third and fourth candle has a smaller range and body .
the fifth candle is a large bodied candle that closes above the highs of the
first candle .

And Here's what a Rising Three Method means ..

1.On the first candle, it shows the buyers are in domination as they closed
the session strongly .
2.On the second, third and fourth candle, buyers are taking profits which led
to a slight decline . However, it's not a strong selloff as there are new buyers
entering long at these prices .
3.On the fifth candle, the buyers regain control and pushed the price to new
highs

NOTE:-If you're familiar with western charting, you'd realized the Bullish
Flag and Rising Three method pretty much mean the same thing .

falling three method :

The Falling Three Method is a bearish trend continuation pattern that signals
the market is likely to continue trending lower .
Here's how to recognize it :

The first candle is a larger bearish candle .

The second, third and fourth candle has a smaller range and body .
the fifth candle is a large bodied candle that closes below the lows of the
first candle .
And Here's what a Falling Three Method means ..

1. On the first candle, it shows the sellers are in domination as they closed
the session strongly Lower .
2.On the second, third and fourth candle, sellers are taking profits which led
to a slight advanced . However, it's not a strong rally as there are new sellers
entering short at these prices .
3.On the fifth candle, the sellers regain control and pushed the price to new
lows .

Next...

bullish harami :
Here's the deal:
Most Trading websites or books will tell you the Bullish Harami occurs after
a decline in price . But I can't agree .
This is one of those things you must use common sense to filter out the BS
out there Think about this :
A downtrend is created using the prices of the few hundred candlesticks.
Do you think it will reverse because a Bullish Harami is formed ?
Unlikely .
Instead, the Bullish Harami works best as a continuation pattern in an
uptrend. it signals the buyers are " taking a break " and the price is likely to
trade higher.
Moving on....
Here's how you recognize a Bullish Harami :

The first candle is bullish and larger than the second candle .
The second candle has a small body and range ( it can be bullish or bearish )

And here's what a Bullish Harami means..

1.On the first candle,it shows strong buying pressure as the candle closes
bullishly .
2.On the second candle, it shows indecision as both buying and selling
pressure is similar ( likely because of traders taking profits and new traders
entering long positions )
NOTE: You can treat the Harami as an inside Bar. They mean the same thing
and can be traded in a similar context .

bearish harami :
A Bearish Harami works best as a continuation pattern in a downtrend. it
signals the sellers are " taking a break " and the price is likely to trade lower.

Here's how you recognize a Bearish Harami :

The first candle is bearish and larger than the second candle . The second
candle has a small body and range ( it can be bullish or bearish )

And here's what a Bearish Harami means...

1.On the first candle, it shows strong selling pressure as the candle closes
bearishly .
2.On the second candle , it shows Neutral as both buying and selling
pressure is similar ( likely because of traders taking profits and new traders
entering short positions ) Let's move on ..

how to find trend continuation setups

So....
You've learned what are continuation candlestick patterns and how it looks
like, Now, I'll teach you how to identify high probability trading setups with
these patterns. Here's how to do it ....

1. If the market is in a range, then wait for it to breakout out of Resistance

2.If hte market breaks out of Resistance , then wait for it to form a
continuation candlestick pattern ( like Rising Three Method or Bullish
Harami )
3.If the market forms a continuation candlestick pattern, then go long on the
break of the highs.
4.And vice versa for short setups .
Here are a few cherry-picked examples:

bearish harami :

bullish harami :
falling three method :

rising three method :

candlestickpatternscheatshe
et
You're probably wondering:
"Goshi"
" There are so many candlestick patterns. How do I remember all of them ? "
Well, you don't have to .
Because if you understand the 3 things i'm about to share with you, then you
read any candlestick patterns like a pro ( think of it like a candlestick pattern
cheat sheet ) . Here's what you must know..

1. The color of the body tells you who's in control

2.The length of the wick represents price rejection.
3.The ratio of the body to the wick tells you the " whole story "
Let me Explain...

1.THE COLOR OF THE BODY TELLS YOU WHO'S IN

CONTROL:This is a no-brainer .
When you see candle closing above the open .it tells you the buyers are in
control momentarily and that's why the market closes and higher .
And when you see a candle closing below the open, it tells you the sellers
are in control momentarily and that's why the market closes lower .
Next...

2.THE LENGHT OF THE WICK REPRESENTS PRICE

REJECTION :

Here's the thing :

If you get a long upper shadow, it shows you strong rejection of higher
prices. And if you get a long lower shadow . It shows you strong rejection of
lower prices.
But what if the shadow ( or wick ) is short ?
Then it means weak rejection of prices.
Make sense right ?
And finally..
3. THE RATIO OF THE BODY TO THE WICK TELLS YOU THE "
WHOLE STORY "

NOW...
You mustn't just pay attention to the body ( or shadow ) because it's only one
side of the story .
You must combine both to get the complete picutre .
it's like in a court case where a judge must listen to the both plaintiff and the
defendant before he gives a verdict .
Here' is a couple of examples

Strong bullish close VS Weak Price Rejection :

This tells you the buyers are in control as there is minimal selling pressure (
the short upper wick ) .

Strong Price Rejection VS Weak Bullish Close :

The sellers are in control as they have reversed most of the earlier gains (
long upper shadow ) . So , even though it's a bullish close , the overall
picture is bearish momentarily.
Does it make sense ?
Great !
Now you have what it takes to read any candlestick pattern without
memorizing a single one .
Thank you so much , I'm happy to See you that you learn
Candlestick Chart Pattern completely , and you learn a lot of
new thing's in this guide . I Hope you like it .
Second Thing that I want to share with you that If you didn't
understand by reading this guide so you have another way to
learn that is our youtube channel & our communtiy platforms .

@Cryptotraderassociation
@CRYPTO TRADER ASSOCIATION
@Crypto Trader Association
@CryptoTrader79
www.cryptotraderspk.com