Commentary and Strategies for the Hong Kong Stock Market

Wednesday, May 14, 2008

Reversal and Continuation Patterns


Reversal Patterns Continuation Patterns
Head and Shoulders Channels / Rectangles
Wedges Flags and Pennants
123, Highers Lowers, Lower Highs Triangles
Double Top/Bottoms 1234s, Higher Lows, Lower Highs
Trendline, Support/Resistance
Pivots
Candlesticks

The above from p 22 of Forex Trading with Japanese Candlesticks and Chart Patterns

Japanese Candlesticks

(from Wikipedia)
  1. White candlestick - signals uptrend movement (those occur in different lengths; the longer the body, the more significant the price increase)
  2. Black candlestick - signals downtrend movement (those occur in different lengths; the longer the body, the more significant the price decrease)
  3. Long lower shadow - bullish signal (the lower wick must be at least the body's size; the longer the lower wick, the more reliable the signal)
  4. Long upper shadow - bearish signal (the upper wick must be at least the body's size; the longer the upper wick, the more reliable the signal)
  5. Hammer - a bullish pattern during a downtrend (long lower wick and small or no body); Shaven head - a bullish pattern during a downtrend & a bearish pattern during an uptrend (no upper wick); Hanging man - bearish pattern during an uptrend (long lower wick, small or no body; wick has the multiple length of the body.
  6. Inverted hammer - signals bottom reversal, however confirmation must be obtained from next trade (may be either a white or black body); Shaven bottom - signaling bottom reversal, however confirmation must be obtained from next trade (no lower wick); Shooting star - a bearish pattern during an uptrend (small body, long upper wick, small or no lower wick)
  7. Spinning top white - neutral pattern, meaningful in combination with other candlestick patterns
  8. Spinning top black - neutral pattern, meaningful in combination with other candlestick patterns
  9. Doji - neutral pattern, meaningful in combination with other candlestick patterns
  10. Long legged doji - signals a top reversal
  11. Dragonfly doji - signals trend reversal (no upper wick, long lower wick)
  12. Gravestone doji - signals trend reversal (no lower wick, long upper wick)
  13. Marubozu white - dominant bullish trades, continued bullish trend (no upper, no lower wick)
  14. Marubozu black - dominant bearish trades, continued bearish trend (no upper, no lower wick)

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