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Definition:
The Black Candlestick represents normal selling pressure.

Recognition Criteria:
1. The real body of this pattern is black with normal length.
2. The upper and lower shadows are smaller than the length of the real body.

Explanation: Selling pressure is indicated by a Black Candlestick. The pattern shows that prices declined from open to close during the day and sellers were in control throughout this process.

Important Factors:
Like most other single candlestick patterns the Black Candlestick has low reliability. It reflects only one day's trading and can be interpreted both as a continuation and a reversal pattern. The pattern must be used with other candlesticks for a better or healthier confirmation of a trend.

White Candlestick

2012-05-11T22:21:00.001-07:00

WHITE CANDLESTICK

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:

The White Candlestick represents normal buying pressure.

Recognition Criteria:

1. The real body of the pattern is white with normal length.
2. The upper and lower shadows are smaller than the length of the real body.

Explanation:

White Candlestick shows buying pressure. It shows that prices advanced from open to close during the day and buyers were in control.

Important Factors:

The White Candlestick is not a reliable pattern like most other single candlestick patterns. Only one day’s trading is reflected in a White Candlestick. Hence it has potential to be interpreted as a continuation pattern as well as a reversal pattern. The neighboring candlesticks must be taken into account to have a healthier decision if the trend is continuing or not.

Short Black Candlestick

2012-05-11T22:19:00.001-07:00

SHORT BLACK CANDLESTICK

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:
The Short Black Candlestick implies relatively weak selling pressure with little price movement.

Recognition Criteria:
1. The real body of this pattern is black and short.
2. The upper and lower shadows are smaller than the length of the real body.

Explanation: The Short Black Candlestick signals a possible consolidation.

Important Factors:
Like most other single candlestick patterns, the Short Black Candlestick has low reliability. It reflects only one day's trading and can be interpreted both as a continuation and a reversal pattern. It must be used with other candlesticks for a better and healthier confirmation of a trend.

Short White Candlestick

2012-05-11T22:17:00.002-07:00

SHORT WHITE CANDLESTICK

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:
The Short White Candlestick represents relatively weak buying pressure with little price movement.

Recognition Criteria:
1. The real body of the candle is white and small.
2. The upper and lower shadows are smaller than the length of the real body.

Explanation: The Short White Candlestick signals consolidation.

Important Factors:
The Short White Candlestick is not reliable since it is a single candlestick pattern. Only one day’s trading is reflected in this pattern. It may show continuation of the trend as well as reversal. Other neighboring patterns must be taken into consideration for a healthier decision regarding the status of the trend.

Black Spinning Top

2012-05-11T22:16:00.001-07:00

BLACK SPINNING TOP

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:
The Black Spinning Top is a single candlestick pattern. Its shape is a small black body with upper and lower shadows having a greater length than the body's length.

Recognition Criteria:
1. The real body of the pattern is black and small.
2. The upper and lower shadows are longer than the real body's length.
Explanation: The market moves higher and then sharply lower, or vice versa. It then closes below the opening price creating a black body. This represents complete indecision between the bulls and the bears. The actual length of the shadows is not important. The small body relative to the shadows is what makes the spinning top.

Important Factors:
If a Black Spinning Top is observed after a long rally or long white candlestick, this implies weakness among the bulls and it is a warning about a potential change or interruption in trend.
If a Black Spinning Top is observed after a long decline or a long black candlestick, this implies weakness among the bears and it is a warning about a potential change or interruption in trend.
Like most other single candlestick patterns, the Black Spinning Top has low reliability. It reflects only one day's trading and can be interpreted both as a continuation and a reversal pattern. This pattern must be used with other candlesticks for a better and healthier confirmation of a trend.

White Spinning Top

2012-05-11T22:15:00.000-07:00

WHITE SPINNING TOP

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:

The White Spinning Top is a single candlestick pattern. Its shape is a small white body with upper and lower shadows that have a greater length than the body's length.

Recognition Criteria:

1. The real body of the pattern is white and small.
2. The upper and lower shadows are longer than the real body's length.

Explanation:

The market moves higher and then sharply lower, or vice versa. It then closes above the opening price creating a white body. This represents complete indecision between the bulls and the bears. The actual length of the shadows is not important. The small body relative to the shadows is what makes the spinning top.

Important Factors:

If a White Spinning Top is observed after a long rally or a long white candlestick, this implies weakness among the bulls and it is a warning about a potential change or interruption in trend.

If a White Spinning Top is observed after a long decline or a long black candlestick, this implies weakness among the bears and it is a warning about a potential change or interruption in trend.

Like most other single candlestick patterns, the White Spinning Top has low reliability. It reflects only one day's trading and can be interpreted both as a continuation and a reversal pattern. This candlestick needs to be used with other candlesticks for a healthier confirmation of a trend.

Four Price Doji

2012-05-11T21:42:00.000-07:00

FOUR PRICE DOJI

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:

Definition:

The Four Price Doji is a single candlestick pattern. It is simply a horizontal line that has no upper or lower shadows.

Recognition Criteria:

1. The body is a horizontal line.
2. There are no upper or lower shadows at all.
3. The open, close, high and low are the same throughout the entire day.

Explanation:

A Four Price Doji is a very rare occurrence and it may be seen only if all the four price components are equal. That is, the open, high, low, and close turn out to be the same. It represents complete and total uncertainty by traders concerning the market direction.

Important Factors:

The Four Price Doji usually occurs when a stock is very illiquid, has low volume, or the data source do not report any other price other than the closing price.

The Four Price Doji is not reliable like most other single candlestick patterns. It only reflects one day's trading and conveys a sense of complete indecision. It usually is interpreted as a reversal pattern however this indicator must be used with other candlesticks for a healthier judgment about the course of the trend.

Like all other doji types, Four Price Doji is also important only in markets where there are not many doji. In a chart characterized by many doji, the emergence of Four Price Doji do not have a signal value.

Doji

2012-05-11T21:39:00.000-07:00

DOJI

Type:	Reversal/Continuation
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Low
Confirmation:	N/A
No. of Sticks:	1

Definition:
If a security has virtually equal opening and closing prices, this leads to a Doji. The length of the upper and lower shadows of a Doji can vary and consequently the resulting candlestick may look like a cross, inverted cross or a plus sign. Doji, taken alone, is a neutral pattern.

Recognition Criteria:
1. The real body is either a horizontal line or it is significantly small (its length is not more than a few ticks).
2. The upper and lower shadows vary in length.

Explanation: The open and close should be equal in an ideal Doji. However the real life is unfortunately not that simple. A Doji with an equal open and close may be considered more robust but it is also rare in the real life. Hence it is more important to capture and understand the essence of this important candlestick. Doji is a particular signal showing indecision about the direction of the market and it represents a tug of war between buyers and sellers. Doji simply shows that prices has moved above and below the opening price during the day, but then the security closed either exactly at or very near the opening price. The overall result is a standoff. It shows that neither the bulls nor the bears were able to gain control during the day and it is possible that a turning point can develop soon.

Important Factors:
Doji is an important candlestick. It provides information on its own. It also features in other formations as an important element.
Doji is relatively easy to spot. It has a very small body with the appearance of a thin horizontal line. The very small body relative to other candlesticks is its distinguishing characteristic.
Doji needs to be interpreted in terms of a preceding trend or preceding candlesticks. The appearance of a Doji after an advance or a long white candlestick signals the fact that the buying pressure is getting weaker. The appearance of a Doji after a decline or a long black candlestick signals the fact that the selling pressure is diminishing. Essentially Doji gives the message that the forces of supply and demand are becoming more evenly matched and consequently a change in trend may be near. However Doji alone is not enough to identify a reversal and further confirmation by following signals may be warranted.
The importance of Doji as a signal is somewhat relative and depends on the characteristics of the market. It is actually important only in markets where you do not see many Doji. If there are many Doji on a particular chart, the appearance of a new Doji in that particular market is not very meaningful and its signal value is negligible.

Inverted Umbrella

2012-05-11T21:38:00.001-07:00

INVERTED UMBRELLA

Type:	Reversal
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Medium
Confirmation:	N/A
No. of Sticks:	1

Definition:

An Inverted Umbrella is characterized by having no lower shadow and but a long upper shadow. The long upper shadow shows the evidence for selling pressure, but the position of high price indicates that plenty of buyers still are around. Inverted Umbrella is a reversal pattern.

Recognition Criteria:

1. The real body of the Inverted Umbrella is either a horizontal line or it is significantly small (its length is not more than a few ticks).
2. There is no lower shadow.
3. However the upper shadow is long.

Explanation:

Inverted Umbrella indicates that buyers dominated the trading and they were able to drive the prices higher during the day. However, sellers resurfaced by the end of the day and pushed prices back to the opening price level and to the day’s low.

Important Factors:

The Inverted Umbrella has the potential to point out evidence for buying pressure and indicate a potential bullish reversal if it appears after a long downtrend, long black candlestick or if it is seen at a visible support level. Likewise it may show a failed rally and indicate a potential bearish reversal if it appears after a long uptrend, long white candlestick or if it is seen at a visible resistance level. Bearish or bullish confirmation is required in both situations.

Umbrella

2012-05-11T21:37:00.001-07:00

UMBRELLA

Type:	Reversal
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Medium
Confirmation:	N/A
No. of Sticks:	1

Definition:
An Umbrella is a type of a doji characterized with no upper shadow but a long lower shadow. The long lower shadow shows the evidence for buying pressure, but the position of low price indicates that plenty of sellers still are around. Umbrella is interpreted as a reversal pattern.

Recognition Criteria:
1. The real body is either a horizontal line or it is significantly small (its length is not more than few ticks).
2. There is no upper shadow.
3. However the lower shadow is long.

Explanation: Umbrella indicates that sellers mostly dominated trading during the day and they were able to drive the prices lower during the day. However; buyers resurfaced at the end of the day and they successfully pushed prices back to the opening level and to the day high.

Important Factors:
Umbrella has the potential to signal a bullish reversal at the bottom if it appears after a long downtrend, long black candlestick or if it is seen at a visible support level. Likewise; umbrella may signal a bearish reversal at the top if it appears after a long uptrend, a long white candlestick or if it is seen at a visible resistance level. Bearish or bullish confirmation is required in both situations.

Long Legged Doji

2012-05-11T21:36:00.000-07:00

LONG LEGGED DOJI

Type:	Reversal
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Medium
Confirmation:	Required
No. of Sticks:	1

Definition:
Long Legged Doji is characterized by very long shadows. It is an important reversal signal.

Recognition Criteria:
1. The real body of the Long Legged Doji is either a horizontal line or it is significantly small (its length is not more than a few ticks).
2. Both of the upper and lower shadows are long and they are almost equal in length.

Explanation: Long Legged Doji shows that there is a great amount of indecision in the market. This pattern is formed when prices trade well above and below the day's opening price, but then close almost at the same level as the opening price. It means that the end result is not different from the initial open despite the whole excitement and high volatility during the day. This implies a loss of sense of direction and that there is a great amount of indecision in the market.

Important Factors:
Long Legged Doji is especially important at tops.
Long Legged Doji is a single candlestick pattern. Hence, a confirmation is definitely required in the form of an opposite move to the prior trade on the next trading day in order to judge that a reversal may be starting.

High Wave

2012-05-11T21:34:00.003-07:00

HIGH WAVE

Type:	Reversal
Relevance:	Indecision
Prior Trend:	N/A
Reliability:	Medium
Confirmation:	Required
No. of Sticks:	1

Definition:

High Wave is a type of candlestick characterized with either a very long upper or a lower shadow. It has only a short real body. A group of these patterns may signal a market turn.

Recognition Criteria:

1. The real body of the candlestick is small. Its color is not important.
2. Either the upper or the lower shadow, or both shadows are long.

Explanation:

The High Wave just like long legged doji shows that there is a great amount of indecision in the market. This pattern is formed when prices trade well above and/or below the day's opening price, but then the price closes almost at the same level as the opening price. It means that the end result is not different from the initial open despite the whole excitement and volatility during the day. The pattern implies a loss of sense of direction and that there is a great amount of indecision in the market. A group of high wave candlesticks signal a possible reversal in the market.

Important Factors:

High Wave is especially important at tops.

High Wave is also a single candlestick pattern. Hence a confirmation is definitely required in the form of an opposite move to the prior trade on the next trading day in order to judge that a reversal may be starting.

Pattern Bearish

2012-05-10T23:26:00.002-07:00

BEARISH REVERSAL/CONTINUATION PATTERNS

Low reliability

Black Opening Marubozu

Black Closing Marubozu

Black Marubozu

Long Black Candlestick

BEARISH CONTINUATION PATTERNS

Low reliability

Three Line Strike

Thrusting

Separating Lines

Medium reliability

Side By Side White Lines

Downside Tasuki Gap

Downside Gap Three Methods

On Neck

In Neck

High reliability

Falling Three Methods

BEARISH REVERSAL PATTERNS
Low reliability

Medium reliability

High reliability

Black Opening Marubozu

2012-05-10T18:53:00.000-07:00

BLACK OPENING MARUBOZU

Type:	Reversal/Continuation
Relevance:	Bearish
Prior Trend:	N/A
Reliability:	Low
Confirmation:	Required
No. of Sticks:	1

Definition:
The Black Opening Marubozu is a single candlestick pattern characterized by a long black body, a lower shadow and absence of upper shadow. It is a strongly bearish candlestick pattern.

Recognition Criteria:
1. A Black Opening Marubozu has a lower shadow.
2. The day opens and prices go below the opening price. Prices continue to move down all day thus forming the long black body.
3. The closing price is below the opening price but not at the low of the day that gives us the lower shadow.

Explanation: The Black Opening Marubozu is a single candlestick pattern characterized by its long black body, displaying a shadow on the closing side but no shadow on the opening side. This shows that the day opened and prices continuously went down but they did not close at the low of the day and thus they created a lower shadow. It is a day for bears and such a bearish rally should cause concern among the bulls.

Important Factors:
A Black Opening Marubozu may be interpreted either as the initial phase of a bearish continuation pattern or it may also signal a bullish reversal depending on the preceding day's candlesticks.
In the case of an uptrend, a Black Opening Marubozu is called as a Bearish Belt Hold Pattern.
The Black Opening Marubozu is a single candlestick pattern with low reliability. It only reflects one day's trading and may be pointing either continuation or reversal. Hence it must be considered with other candlesticks to better judge the direction of the trend.

Black Closing Marubozu

2012-05-10T18:43:00.001-07:00

BLACK CLOSING MARUBOZU

Type:	Reversal/Continuation
Relevance:	Bearish
Prior Trend:	N/A
Reliability:	Low
Confirmation:	Required
No. of Sticks:	1

Definition:

The Black Closing Marubozu is a single candlestick pattern characterized by its long black body. It does not have a lower shadow but it has an upper shadow. It is an extremely strong bearish candlestick pattern.

Recognition Criteria:

1. A Black Closing Marubozu has an upper shadow.
2. The day opens, prices slightly move up creating the upper shadow but then prices start moving down all day long creating the long black body.
3. Then the day closes at the low of the day which explains the absence of the lower shadow.

Explanation:

The Black Closing Marubozu is a single candlestick pattern. As mentioned above; it is a long black body showing a shadow on the open but no shadow at close. This shows that the day opened and then prices initially went up but then they reversed direction moving below the opening level and finally closed at the low of the day. It is a day of the bears. With the bears in full force; it may show either the continuation of a downtrend or a final sell off attempt just before the bulls regain control.

Important Factors:

A Black Closing Marubozu can be either the initial phase of a bearish continuation pattern or it may signal a bullish reversal depending on the preceding day's candlesticks.

The Black Opening Marubozu is a single candlestick pattern with low reliability. It only reflects one day's trading and may be pointing either continuation or reversal. Hence it must be considered with other candlesticks to better judge the direction of the trend.

Black Marubozu

2012-05-10T18:39:00.001-07:00

BLACK MARUBOZU

Type:	Reversal/Continuation
Relevance:	Bearish
Prior Trend:	N/A
Reliability:	Low
Confirmation:	Required
No. of Sticks:	1

Definition:
The Black Marubozu is a single candlestick pattern characterized by a long black body. It does not have any shadows on either end. It is an extremely strong bearish candlestick pattern.

Recognition Criteria:
1. A black Marubozu is characterized by not having upper or lower shadows and by its long black body.
2. It shows that the prices moved down all day long after the opening thus forming the long black body.
3. Then the day closes at its lowest level that explains the absence of the lower shadow.

Explanation: A Black Marubozu forms when the opening price is equal to the high price of the day while the closing price is equal to the low price of the day. This shows that the sellers controlled the price action from the first trade to the last trade. When a Black Marubozu day occurs, the day opens and prices continue to move down all day long without stopping. It may show continuation of the downtrend or a final sell off attempt before the bulls regain control.

Important Factors:
A Black Marubozu may be the initial phase of a bearish continuation pattern but it may also signal a bullish reversal depending on the preceding day's candlesticks.
The Black Marubozu is a single candlestick pattern with low reliability. It reflects only one day’s trading with a potential to signal both continuation and reversal. It must be used with other candlesticks for the confirmation of a trend.

Long Black Candlestick

2012-05-10T18:38:00.000-07:00

LONG BLACK CANDLESTICK

Type:	Reversal/Continuation
Relevance:	Bearish
Prior Trend:	N/A
Reliability:	Low
Confirmation:	Required
No. of Sticks:	1

Definition:
The Long Black Candlestick signals strong selling pressure in the market.

Recognition Criteria:
1. The real body is black and it is relatively long.
2. The sizes of the upper and lower shadows are not important.

Explanation:
Long Black Candlesticks are indicators of strong selling pressure. A longer black candlestick means that the close is further below the opening price. The prices decline significantly following the opening showing that sellers were aggressive. Long Black Candlesticks are generally bearish formations however their interpretation also depends on their position within the broader technical picture. A Long Black Candlestick may warn a turning point or mark a future resistance level after a long rally. However Long Black Candlestick may signal panic or capitulation if it appears after a long decline.

Important Factors:
The Long Black Candlestick is a single candlestick pattern with low reliability. It only reflects one day's trading and may both be pointing out to continuation or reversal. Thus it requires consideration of other candlesticks to confirm a trend.

Three Line Strike

2012-05-10T18:34:00.000-07:00

BEARISH THREE LINE STRIKE

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Low
Confirmation:	Definitely required
No. of Sticks:	4

Definition:
This pattern is characterized by three adjacent black and long candlesticks terminated by a white candlestick driving prices back to the point where they were at the beginning of the pattern. If there was a strong bearish trend before the pattern, then it should continue.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see three long black candlesticks with consecutively lower closes.
3. Then we see a white candlestick on the fourth day opening at a lower level and closing above the open of the pattern’s first day.

Explanation:
The Bearish Three Line Strike Pattern appears during a downtrend as evidenced by the three black candlesticks. We see an opening on the fourth day that opens in the direction of the downtrend, but now shorts start covering their positions causing the prices to move strongly in the opposite direction. This may lead to doubts about market direction. However it is also a fact that this move completely eradicated the move of the previous three days. So this day should be looked upon as a day that gave the shorts the chance of being covered and if the bearish trend was strong before the pattern, the downward move should continue.

Important Factors:
A confirmation on the fifth day in the form of a black candlestick, a large gap down or a lower close is definitely required.

Thrusting

2012-05-10T18:30:00.007-07:00

BEARISH THRUSTING

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Low
Confirmation:	Required
No. of Sticks:	2

Definition:
Bearish Thrusting Pattern is characterized by a white candlestick that closes in the prior black real body, however still under the middle of the prior session’s real body. Bearish Thrusting Pattern is a bearish signal in a downtrend.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see a black candlestick in first day.
3. Then we see a white candlestick, which opens considerably lower than the low of the first day.
4. The second day candlestick closes well into the body of first black candlestick, but not above the midpoint.

Explanation:
The Bearish Thrusting Pattern shows a rally failure in a down market. The fact that the second day's close doesn't even reach to the midpoint of the first day's body discourages the bulls and downtrend continues due to lacking of buying.

Important Factors:
The Bearish Thrusting Pattern is weaker than the Bearish On Neck and In Neck continuation patterns.
A confirmation of downtrend by a black candlestick, a gap down or by a lower close on the next trading day (the third day) is required.

Separating Lines

2012-05-10T18:29:00.003-07:00

BEARISH SEPERATING LINES

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Low
Confirmation:	Required
No. of Sticks:	2

Definition:
This pattern is characterized by a white candlestick in a downtrend, which is followed by a sharply lower gap when market opens next day and shows an opening price equal to the prior day’s opening price and also a lower closing price, which is a Black Opening Marubozu.

Recognition Criteria:
1. The market is characterized by downtrend.
2. We see a long white candlestick in the first day.
3. Then we see a black body, which has the same opening price as the first day, or extremely close to it.
4. The second day candlestick is a Black Opening Marubozu.

Explanation: A white real body (especially a relatively long one) is a matter of concern for the shorts during downtrend. It shows that the bulls may be gaining control. However, if the next day opens with a downward gap and an opening price equal to the previous day’s opening price, this reinstates the bear confidence. If furthermore the day closes lower, bears feel even more confident about the fact that the downtrend will continue.

Important Factors:
The black candlestick must be a Black Opening Marubozu.
A confirmation on the third day is required to justify that the downtrend is still strong. The confirmation may be in the form of a black candlestick, a large gap down or a lower close on the third day.

Side By Side White Lines

2012-05-10T18:27:00.003-07:00

BEARISH SIDE BY SIDE WHITE LINES

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Medium
Confirmation:	Recommended
No. of Sticks:	3

Definition:
This pattern is formed by a black candlestick that is followed by two white candlesticks during a downtrend. Its particular feature is to display days that are gapped below the first day. This suggests that the shorts are covering their positions, and no reversal is expected soon. The downtrend is likely to remain intact for the near future.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see a black candlestick in the first day.
3. Then we see a white candlestick gapping down on second day.
4. Finally we see a white candlestick, which is almost the same size and is also marked with an opening price at about the same price as the opening price of the second day.

Explanation:
An ongoing downtrend is further enhanced with the long black candlestick displaying a large downward gap when market opens on the next day. The prices then may trade at higher levels all day long, however not high enough to close the downward gap. The third day then opens lower, at about the same opening price as the second day. There is evidently a resistance to further downside action, which impels the shorts to cover their positions causing a third day rally and leading to a higher close. However it is again not high enough to close the initial downward gap. As short covering terminates, prices should move lower.

Important Factors:
This Bearish Side By Side White Lines Pattern is a very rare formation.
The two side-by-side white candlesticks after gapping below a black candlestick are not only of similar size, but also the opening price should be very close.
A confirmation is recommended in the form of a black candlestick, a large gap down or a lower close on the next trading day to be sure that downtrend will continue.

Downside Tasuki Gap

2012-05-10T18:25:00.001-07:00

BEARISH DOWNSIDE TASUKI GAP

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Medium
Confirmation:	Recommended
No. of Sticks:	3

Definition:
The pattern involves two long black candlesticks with a downward gap between them during a downtrend. Pattern is completed by a third day white candlestick partially closing the gap between the first two. The white candlestick may be the result of investors temporarily taking advantage of the low buying price. However we expect the trend to continue in the downward direction.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see two long black candlesticks with a gap between them in the first and second days.
3. Then we see a white candlestick characterized with an opening within the body of the second day.
4. The body of third day candlestick closes into the gap but does not fully close the gap.

Explanation:
The Bearish Downside Tasuki Gap Pattern appears in a strongly downward moving market. The downward move is extended further by another day, which displays a gap in the direction of the downtrend. The third day has an opening well into the body of the second day and it partially fills the gap. However the gap is not filled or closed, so previous downward trend continues.

Important Factors:
The Bearish Downside Tasuki Gap Pattern is a rare formation.
The real bodies of the last two candlesticks in the Bearish Downside Tasuki Gap Pattern should be about the same size.
This Bearish Downside Tasuki Gap Pattern is a simple pattern quite similar to the Bearish Downside Gap Three Methods Pattern. The only difference is that in the Bearish Downside Gap Three Methods Pattern, the gap that is made between the first two days is filled by the third day.
A confirmation is recommended in the form of a black candlestick, a large gap up or a lower close on the next trading day to be sure that downward trend will continue.

Downside Gap Three Methods

2012-05-10T18:24:00.000-07:00

BEARISH DOWNSIDE GAP THREE METHODS

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Medium
Confirmation:	Suggested
No. of Sticks:	3

Definition:

Two long black candlesticks with a downward gap between them appear. They are followed on the third day with a white candlestick, which manages to close the gap between the first two. This should be seen as a support for the downward trend.

Recognition Criteria:

1. Market is characterized by downtrend.
2. We see two long black candlesticks with a gap between them in the first and second days.
3. Then we see a white candlestick on the third day characterized with an opening within the body of the second day.
4. The body of third day candlestick is white and it fills the gap between the first two days.

Explanation:

The Bearish Downside Gap Three Methods Pattern appears when the market is moving strongly downward. Downward move is extended further by another day showing a gap in the direction of the downtrend. The third day opening is well within the body of the second day, and it manages to completely fill the gap. This gap-closing move may be interpreted as a support level for the current downtrend.

Important Factors:

This Bearish Downside Gap Three Methods Pattern is a simple pattern with strong similarity with the Bearish Downside Tasuki Gap Pattern. The only difference is that in the Bearish Downside Tasuki Gap Pattern, the gap between the first two days is not filled by a third day body.

A confirmation of the trend is required in the form of a black candlestick, a large gap down or a lower close on the next trading day to be sure that downtrend is continuing.

On Neck

2012-05-10T18:22:00.003-07:00

BEARISH ON NECK

Type:	Continuation
Relevance:	Bearish
Prior Trend:	Bearish
Reliability:	Medium
Confirmation:	Suggested
No. of Sticks:	2

Definition:
Bearish On Neck Pattern is a black candlestick followed by a small white candlestick, which is characterized by a closing price near the low of the black candlestick during a downtrend. If the low of white candlestick is broken down, market goes further down.

Recognition Criteria:
1. Market is characterized by downtrend.
2. We see a long black candlestick in the first day.
3. Then we see a white candlestick on the second day, which opens below the low of the previous day. This day does not need to be a long day or it might resemble the Bullish Meeting Line Pattern.
4. The closing price of the second day is either the low price of the first day or almost same.

Explanation:
The Bearish On Neck Pattern is an undeveloped version of the Bullish Piercing Line Pattern. It is a similar pattern except that the second day's white body only gets up to the previous day's low. The Bearish On Neck Pattern usually appears during a decline and is a typical pattern in a downtrend. Bearishness increases with the long black first day. The market shows a gap down on the second day, but cannot continue the downtrend. Prices start going up but they stop at the previous day's low price. This bearish occurrence is uncomfortable for potential bottom pickers. The downtrend may continue for a short while.

Important Factors:
The Bearish On Neck Pattern is different from the Bullish Meeting Lines Pattern.
The likelihood of the downward trend increases if the trading volume on the second day is high.
Confirmation on third day is required in the form of a black candlestick, a gap down or a lower close.