Abandoned Baby Definition The abandoned baby candlestick formation is a three bar reversal pattern that is similar to the morning and evening star formations and is a very reliable reversal signal when it occurs after a sharp rise or drop.  While it is very similar to the morning star and evening star, it has one Read the full article →

Harami Candlestick Pattern I would like to cover some secondary candlestick patterns that signal a reversal may be at hand. These are not as powerful as the formations we went over in our Candlestick Charts Reversal article; however, they are important nonetheless. This article will focus on the Harami. When the harami pattern appears, it Read the full article →

Gravestone Doji – Bearish Reversal Candlestick Gravestone Doji is a candlestick bar where the open, low, and close are at the low of the day. The gravestone doji is a bearish formation and its success rate is greatly increased when the candle forms at a market top. The psychology behind the candle is that the Read the full article →

Belt Hold Line Definition The belt hold line candlestick is basically the white marubozu and black marubozu within the context of a trend. The bullish belt hold candle opens on the low of the day and closes near the high. This candle presents itself in a downtrend and is an early sign that there is Read the full article →

Concealing Baby Swallow Candlestick Definition The concealing baby swallow occurs at the end of downtrends and is a bullish reversal signal. The pattern consists of four candlesticks that are all black (red), and is an early sign that the downtrend is deteriorating. Concealing Baby Swallow Candlestick Charting Example The first two days of the concealing Read the full article →

Overview A spinning top or (koma) is a candlestick which the body of the candlestick is smaller than the lower and upper wicks. This candle represents a neutral position in which neither the bulls or bears are able to gain control during the trading session. The color of the real body is irrelevant as the Read the full article →

Stick Sandwich Definition The stick sandwich pattern can occur in both bull and bear markets. The stick sandwich pattern consists of three candlesticks, where one candlestick has an opposite colored candlestick on both sides. The closing prices of the two candlesticks that surround the opposite colored candlestick must be same. Bearish Stick Sandwich Charting Example Read the full article →

Definition of an Inside Day An inside day is when a security trades within the high and low range of the previous day.  An inside day can occur on any chart style that shows that high and low data, but it is easiest to identify with candlesticks.  An inside day is a sign to a Read the full article →

Candlestick Charting Explained Candlestick charts are constructed using the same elements that the traditional bar charts use; however, traders using candlestick charting techniques are more interested in the sentiment indications that are derived from the different candlestick formations. In my experience, this provides a considerable edge over bar charts once you study the formations which Read the full article →

To practice the island reversal examples detailed in this article visit http://tradingsim.com. Island Reversal – Reversal Candlestick Pattern An island reversal is a chart formation where there is a gap on both sides of the candle. Island reversals frequently show up after a trending move is in its final stages. An island reversal gets it name Read the full article →