Single Candlestick Patterns Made Simple

1. Doji
A Doji happens when the open and close prices are nearly the same, showing market indecision.
 When to Use:
o In trends or sideways markets to spot possible reversals or pauses.

 Where to Use:
o Near support and resistance to confirm or doubt the trend.

Types of Doji:
 Standard Doji: Shows market uncertainty.
o Tip: Wait for the next candle to confirm direction.

 Dragonfly Doji: Long lower wick; price dropped but recovered.

o Tip: May signal a bullish reversal near support.

 Gravestone Doji: Long upper wick; price rose but fell back.
o Tip: May signal a bearish reversal near resistance.

 Long-legged Doji: Long wicks on both sides; strong indecision.

o Tip: Be cautious, as the market could move sharply.

2. Hammer
A small body with a long lower wick, signaling a potential bullish reversal.
 When to Use: After a downtrend to spot a trend reversal.
  Where to Use: Near support levels or when the market is oversold.

3. Inverted Hammer
A small body with a long upper wick, signaling a possible bullish reversal.
 When to Use: At the end of a downtrend but wait for confirmation.
 Where to Use: Near support or after a big price drop.

4. Hanging Man
Looks like a Hammer but appears during an uptrend, signaling a potential bearish reversal.
 When to Use: During an uptrend to spot signs of weakness.
  Where to Use: Near resistance or when the market is overbought.

5. Shooting Star
A small body with a long upper wick, signaling a potential bearish reversal.
 When to Use: At the end of an uptrend to spot a possible drop.
 Where to Use: Near resistance or after a strong upward move.

6. Spinning Top
A small body with wicks on both sides, showing market indecision.
 When to Use: To understand uncertainty during a sideways market.
 Where to Use: Near support or resistance and wait for the next candle for clarity.
7. Marubozu
A candlestick with no wicks, showing strong buying or selling pressure.
 When to Use: To spot strong market momentum.
 Where to Use: At the start or during a trend.
Types of Marubozu:
 Bullish Marubozu: Price opens at the lowest and closes at the highest, showing strong buying.
o Tip: Confirms bullish trends or breakouts above resistance.

 Bearish Marubozu: Price opens at the highest and closes at the lowest, showing strong selling.
o Tip: Confirms bearish trends or breakdowns below support.

Double Candlestick Patterns Made Simple

8. Bullish Engulfing
A big bullish candle completely covers the smaller bearish candle before it.
 When to Use: At the end of a downtrend to signal a bullish reversal.
  Where to Use: Near strong support or when the market is oversold.

9. Bearish Engulfing
A big bearish candle completely covers the smaller bullish candle before it.
 When to Use: At the end of an uptrend to signal a bearish reversal.
 Where to Use: Near resistance or when the market is overbought.

10. Piercing Pattern

A bullish candle closes more than halfway into the previous bearish candle.
 When to Use: After a downtrend to signal a bullish reversal.
 Where to Use: Near support levels for possible trend changes.
11. Dark Cloud Cover
A bearish candle closes more than halfway into the previous bullish candle.
 When to Use: After an uptrend to signal a bearish reversal.
 Where to Use: Near resistance levels to watch for selling pressure.

12. Tweezer Tops

Two candles with similar high points, often showing resistance and a possible reversal.
 When to Use: In an uptrend to signal a bearish reversal.
 Where to Use: Near resistance or after a strong price rise.
13. Tweezer Bottoms
Two candles with similar low points, often showing support and a possible reversal.
 When to Use: In a downtrend to signal a bullish reversal.
 Where to Use: Near support or after a strong price drop.

14. Harami
A small candle is inside the body of the bigger candle before it, showing indecision.
Types of Harami:
 Bullish Harami: A small bullish candle follows a big bearish one.
o When to Use: After a downtrend to spot a reversal.

o Where to Use: Near support or when the market is oversold.

 Bearish Harami: A small bearish candle follows a big bullish one.

o When to Use: After an uptrend to spot a reversal.
 o Where to Use: Near resistance or when the market is overbought.

15. Harami Cross

A Harami pattern where the second candle is a Doji, showing strong indecision.
Types of Harami Cross:
 Bullish Harami Cross: A Doji follows a big bearish candle.
o When to Use: After a downtrend to signal a possible reversal.

o Where to Use: Near support to confirm indecision before a reversal.

 Bearish Harami Cross: A Doji follows a big bullish candle.

o When to Use: After an uptrend to signal a possible reversal.

o Where to Use: Near resistance to confirm indecision before a reversal.

Triple Candlestick Patterns Made Simple
16. Morning Star
Pattern:
1. Big bearish candle.
2. Small candle (bullish or bearish) below the first.
3. Big bullish candle closing above the middle of the first.
 Use: Signals a bullish reversal after a downtrend.
 Where to Use: Near support or oversold areas.
17. Evening Star
Pattern:
1. Big bullish candle.
2. Small candle (bullish or bearish) above the first.
3. Big bearish candle closing below the middle of the first.
 Use: Signals a bearish reversal after an uptrend.
 Where to Use: Near resistance or overbought areas.

18. Morning Doji Star

Pattern:
1. Big bearish candle.
2. Doji (small candle with almost no body) below the first.
3. Big bullish candle closing above the middle of the first.
 Use: Strong bullish reversal in a downtrend.
 Where to Use: Near support to confirm indecision before a reversal.
19. Evening Doji Star
Pattern:
1. Big bullish candle.
2. Doji (small candle with almost no body) above the first.
3. Big bearish candle closing below the middle of the first.
 Use: Strong bearish reversal in an uptrend.
 Where to Use: Near resistance to confirm indecision before a reversal.

20. Three White Soldiers

Pattern:
Three long bullish candles, each closing higher than the last.
 Use: Confirms strong bullish momentum after a downtrend or consolidation.
 Where to Use: Near support or after a breakout.
21. Three Black Crows
Pattern:
Three long bearish candles, each closing lower than the last.
 Use: Confirms strong bearish momentum after an uptrend or consolidation.
 Where to Use: Near resistance or after a breakdown.

Simple Explanation of Triple Candlestick Patterns

22. Three Inside Up
Pattern:
1. Big bearish candle.
2. Smaller bullish candle within the first.
3. Big bullish candle closing above the first candle.
 Use: Signals a bullish reversal after a downtrend.
 Where to Use: Near support levels.
23. Three Inside Down
Pattern:
1. Big bullish candle.
2. Smaller bearish candle within the first.
3. Big bearish candle closing below the first candle.
 Use: Signals a bearish reversal after an uptrend.
 Where to Use: Near resistance levels.

Simple Explanation of Multiple Candlestick Patterns

24. Rising Three Methods
Pattern:
1. Big bullish candle.
2. 2-4 small bearish candles (slight pullback).
3. Big bullish candle closing above the first.
  Use: Confirms bullish continuation during an uptrend.
 Where to Use: After minor pullbacks in an uptrend.

25. Falling Three Methods

Pattern:
1. Big bearish candle.
2. 2-4 small bullish candles (slight pullback).
3. Big bearish candle closing below the first.
 Use: Confirms bearish continuation during a downtrend.
 Where to Use: After minor pullbacks in a downtrend.

26. Bullish Separating Lines

Pattern:
1. Big bearish candle.
2. Big bullish candle opening at the same level as the first and closing higher.
 Use: Confirms strong bullish momentum during an uptrend.
 Where to Use: After temporary selling pressure in an uptrend.
27. Bearish Separating Lines
Pattern:
1. Big bullish candle.
2. Big bearish candle opening at the same level as the first and closing lower.
 Use: Confirms strong bearish momentum during a downtrend.
 Where to Use: After temporary buying pressure in a downtrend.

28. Upside Tasuki Gap

Pattern:
1. Big bullish candle.
2. Big bullish candle with a gap up.
3. Small bearish candle closing partially in the gap (but not fully).
 Use: Confirms bullish continuation during an uptrend.
 Where to Use: Near support or in a strong uptrend.
29. Downside Tasuki Gap
Pattern:
1. Big bearish candle.
2. Big bearish candle with a gap down.
3. Small bullish candle closing partially in the gap (but not fully).
 Use: Confirms bearish continuation during a downtrend.
 Where to Use: Near resistance or in a strong downtrend.

30. Mat Hold Pattern

Pattern:
1. Big bullish candle.
2. 3 small candles (bearish or neutral) staying above the first.
3. Big bullish candle breaking higher.
 Use: Confirms strong bullish continuation during an uptrend.
  Where to Use: In strong trending markets or near breakout zones.

31. Side-by-Side White Lines (Bullish Continuation)

Pattern:
1. Two or more bullish candles of similar size.
2. Each candle closes higher than the last.
 Use: Confirms strong bullish momentum in an uptrend.
 Where to Use: Near support or in a strong uptrend.

32. Side-by-Side White Lines (Bearish Continuation)

Pattern:
 1. Two or more bearish candles of similar size.
2. Each candle closes lower than the last.
 Use: Confirms strong bearish momentum in a downtrend.
 Where to Use: Near resistance or in a strong downtrend.

Simple Explanation of More Patterns

33. Inside Bar
Pattern:
1. A small candlestick is fully inside the range of the previous candlestick.
 Use: Shows indecision or pause before a breakout.
 Where: In trends or near support/resistance for potential breakouts.

34. Outside Bar (Engulfing)

Pattern:
1. The second candlestick completely engulfs the first (body and wicks).
 Use: Signals strong reversal or continuation.
 Where: At support/resistance levels to confirm price direction.

35. Island Reversal

Pattern:
1. A gap before and after a group of candles, forming an isolated "island."
 Use: Indicates a strong trend reversal.
 Where: After a long uptrend (bearish) or downtrend (bullish).

36. Belt Hold

Pattern:
 Bullish Belt Hold: A long bullish candle with no lower wick (opens at the low).
o Use: Shows a bullish reversal after a downtrend.

o Where: Near support.

  Bearish Belt Hold: A long bearish candle with no upper wick (opens at the high).
o Use: Shows a bearish reversal after an uptrend.

o Where: Near resistance.

37. Kicker Pattern

Pattern:
1. A sudden change in direction with a gap:
o Bullish Kicker: A big bullish candle follows a bearish one with a gap up.

o Bearish Kicker: A big bearish candle follows a bullish one with a gap down.

 Use: Confirms a strong reversal.

 Where: After a gap near key levels or during news events.

38. Window (Gap)

Pattern:
1. A price gap between two candles:
o Bullish Gap: Price jumps up, showing buying strength.

o Bearish Gap: Price drops down, showing selling strength.

 Use: Confirms continuation of the trend.

 Where: During strong trends or breakouts.

39. Breakaway
Pattern:
1. A five-candlestick sequence:
o Bullish Breakaway: Starts with a bearish candle, gaps down, consolidates, then ends
with a big bullish candle above the first.
o Bearish Breakaway: Starts with a bullish candle, gaps up, consolidates, then ends with a
big bearish candle below the first.
 Use: Shows a trend reversal.
 Where: Near support (bullish) or resistance (bearish).
Simple Explanation of Exotic Patterns
40. Abandoned Baby
Pattern:
 Bullish Abandoned Baby:
1. Large bearish candle.
2. Small Doji or small-bodied candle with a gap down (no overlap).
3. Large bullish candle with a gap up above the small candle.
 Bearish Abandoned Baby:
1. Large bullish candle.
2. Small Doji or small-bodied candle with a gap up (no overlap).
3. Large bearish candle with a gap down below the small candle.
 Use: Shows a strong reversal after a trend.
 Where:
o Bullish: After a downtrend, near support.

o Bearish: After an uptrend, near resistance.

41. Deliberation
Pattern:
1. Large bullish or bearish candle (strong trend).
2. Small-bodied candle (shows hesitation).
 Use: Signals a possible reversal or pause in the trend.
 Where: Near key support or resistance after a strong trend.

42. Advance Block

Pattern:
1. Large bullish candle.
2. Smaller bullish candle with a higher close.
3. Even smaller bullish candle with a higher close and long upper wick.
 Use: Shows weakening momentum in an uptrend, signaling a potential reversal.
 Where: Near resistance or after a strong uptrend.
43. Matching Low
Pattern:
1. Large bearish candle.
2. Another bearish or Doji candle closing at the same level as the first.
 Use: Shows strong support at a price level, signaling a potential reversal.
 Where: At the end of a downtrend or near support.

44. Matching High

Pattern:
1. Large bullish candle.
2. Another bullish or Doji candle closing at the same level as the first.
 Use: Shows strong resistance at a price level, signaling a potential reversal.
 Where: At the end of an uptrend or near resistance.

Here's a list of 30 powerful indicators in trading, along with where to use them, when to use them, and
how to use them:

1. Moving Average (MA)

 Where to Use: In trending markets.
 When to Use: To identify trend direction.
 How to Use: A simple moving average (SMA) or exponential moving average (EMA) helps
smooth price data, confirming bullish or bearish trends.

2. Exponential Moving Average (EMA)

 Where to Use: In fast-moving markets.
 When to Use: To spot trends quickly.
 How to Use: The EMA reacts faster to price changes than the SMA, making it more sensitive to
recent price movements.
3. Relative Strength Index (RSI)
 Where to Use: In trending and range-bound markets.
 When to Use: To spot overbought/oversold conditions.
 How to Use: RSI above 70 suggests overbought (sell), and below 30 suggests oversold (buy).

4. Moving Average Convergence Divergence (MACD)

 Where to Use: In trending markets.
 When to Use: To detect trend reversals and momentum.
 How to Use: Look for MACD line crosses above or below the signal line to signal buy or sell.
Divergence with price action signals potential reversal.

5. Bollinger Bands
 Where to Use: In volatile markets.
 When to Use: To measure volatility.
 How to Use: Price touching the upper band may indicate overbought conditions, while touching
the lower band indicates oversold conditions.

6. Stochastic Oscillator
 Where to Use: In range-bound markets.
 When to Use: To identify overbought or oversold conditions.
 How to Use: When the %K line crosses above the %D line in oversold territory, it’s a buy signal.
When it crosses below in overbought territory, it’s a sell signal.

7. Fibonacci Retracement
 Where to Use: In trending markets.
 When to Use: To identify potential reversal levels.
 How to Use: Draw Fibonacci retracement from the swing low to high. Watch for price to reverse
near key levels (23.6%, 38.2%, 50%, 61.8%).

8. Volume
  Where to Use: In all markets.
 When to Use: To confirm trends and breakouts.
 How to Use: Increasing volume during price moves indicates strong momentum. Decreasing
volume can signal trend exhaustion.

9. Average True Range (ATR)

 Where to Use: In volatile markets.
 When to Use: To measure market volatility.
 How to Use: Higher ATR values suggest higher volatility, helping set stop-losses or identify
breakout points.

10. Parabolic SAR

 Where to Use: In trending markets.
 When to Use: To identify potential reversals.
 How to Use: The dots below the price indicate a bullish trend, and dots above indicate a bearish
trend.

11. Ichimoku Cloud

 Where to Use: In trending markets.
 When to Use: To identify trends and support/resistance levels.
 How to Use: If the price is above the cloud, it’s bullish; if below, it’s bearish. The cloud thickness
shows support/resistance strength.

12. Pivot Points

 Where to Use: In range-bound or consolidating markets.
 When to Use: To identify support and resistance levels.
 How to Use: Calculate the pivot point to identify levels. Breakouts above/below can indicate
strong trends.

13. Commodity Channel Index (CCI)

 Where to Use: In trending or range-bound markets.
  When to Use: To identify overbought or oversold conditions.
 How to Use: Above +100 is overbought (sell), below -100 is oversold (buy).

14. Donchian Channels

 Where to Use: In trending markets.
 When to Use: To identify breakouts.
 How to Use: Price touching the upper band indicates a bullish breakout, and touching the lower
band indicates a bearish breakout.

15. Envelope
 Where to Use: In trending markets.
 When to Use: To identify overbought/oversold levels.
 How to Use: The upper and lower bands represent boundaries where price can reverse. When
price touches these levels, consider reversal.

16. Chaikin Money Flow (CMF)

 Where to Use: In trending markets.
 When to Use: To assess the strength of a trend.
 How to Use: Positive CMF indicates buying pressure, while negative CMF signals selling
pressure.

17. On-Balance Volume (OBV)

 Where to Use: In trending markets.
 When to Use: To confirm trends with volume.
 How to Use: Rising OBV confirms bullish momentum, while falling OBV signals bearish
momentum.

18. Keltner Channels

 Where to Use: In trending markets.
 When to Use: To determine overbought/oversold conditions.
  How to Use: When price touches the upper or lower band, it suggests overbought or oversold
conditions.

19. Williams %R
 Where to Use: In range-bound markets.
 When to Use: To identify overbought/oversold conditions.
 How to Use: If the indicator is above -20, it’s overbought (sell), and below -80 it’s oversold
(buy).

20. Relative Strength Indicator (RSI) Divergence

 Where to Use: In all markets.
 When to Use: To spot trend reversals.
 How to Use: When price makes a new high but RSI doesn’t, it’s a sign of bearish divergence
(sell). Bullish divergence occurs when price makes a new low but RSI doesn’t.

21. Elder-Ray Index

 Where to Use: In trending markets.
 When to Use: To assess market strength.
 How to Use: Bullish trend when the Bull Power is greater than Bear Power. Bearish trend when
Bear Power is greater than Bull Power.

22. Trix (Triple Exponential Average)

 Where to Use: In trending markets.
 When to Use: To identify long-term trends.
 How to Use: Trix crossing above zero indicates a bullish trend; crossing below indicates a
bearish trend.

23. Detrended Price Oscillator (DPO)

 Where to Use: In trending markets.
 When to Use: To remove trends and focus on cycles.
 How to Use: When the DPO moves above or below zero, it signals changes in the market cycle.
24. Price Oscillator (PPO)
 Where to Use: In trending markets.
 When to Use: To identify trends and momentum.
 How to Use: Crossovers above and below zero line signal potential buy or sell.

25. Heikin Ashi

 Where to Use: In trending markets.
 When to Use: To smooth out price action.
 How to Use: Bullish trend when all candles are green (upward). Bearish trend when all candles
are red (downward).

26. Coppock Curve

 Where to Use: In long-term trends.
 When to Use: To identify long-term buying opportunities.
 How to Use: A rising Coppock curve signals potential buying opportunities.

27. Market Facilitation Index (MFI)

 Where to Use: In trending markets.
 When to Use: To identify momentum and market participation.
 How to Use: High MFI with a rising market suggests strong buying; low MFI with a falling
market signals weak selling.

28. Trend Line

 Where to Use: In all markets.
 When to Use: To identify support and resistance.
 How to Use: Draw lines connecting lows for uptrend and highs for downtrend. Breaks indicate
potential trend changes.

29. Price Rate of Change (ROC)

 Where to Use: In trending markets.
  When to Use: To spot price momentum.
 How to Use: When ROC is above zero, it suggests upward momentum; below zero suggests
downward momentum.

30. Gann Fan

 Where to Use: In trending markets.
 When to Use: To predict potential reversal points.
 How to Use: Gann angles help predict support and resistance levels at different angles based on
time and price movements.

Here’s a simple guide to how, where, and when to use the 30 chart patterns commonly found in technical
analysis:

Trend Reversal Patterns

These patterns help identify when the trend might change direction.
1. Head and Shoulders
o How to Use: Watch for three peaks, with the middle being the highest (head).

o Where to Use: At the end of an uptrend.

o When to Use: A reversal to a downtrend when the price breaks below the neckline.

2. Inverse Head and Shoulders

o How to Use: Look for three valleys, with the middle being the lowest.
 o Where to Use: After a downtrend.

o When to Use: A reversal to an uptrend when the price breaks above the neckline.

3. Double Top
o How to Use: Two peaks at roughly the same level.

o Where to Use: After an uptrend.

o When to Use: When the price breaks below the support level after the second peak
(signaling a downtrend).
4. Double Bottom
o How to Use: Two troughs at roughly the same level.

o Where to Use: After a downtrend.

o When to Use: When the price breaks above the resistance level after the second trough
(signaling an uptrend).

5. Triple Top
o How to Use: Three peaks at roughly the same level.

o Where to Use: After an uptrend.

o When to Use: When the price breaks below support, indicating a potential downtrend.
6. Triple Bottom
o How to Use: Three troughs at roughly the same level.

o Where to Use: After a downtrend.

o When to Use: When the price breaks above resistance, signaling a possible uptrend.

7. Rounding Bottom (Saucer)

o How to Use: A gradual curve, forming a "saucer" shape.
 o Where to Use: After a prolonged downtrend.

o When to Use: When price begins to rise, indicating a shift to an uptrend.

8. Broadening Formation (Megaphone)

o How to Use: A widening pattern with higher highs and lower lows.

o Where to Use: After a trend change or during volatile periods.

o When to Use: When the price breaks above the upper trendline (bullish) or below the
lower trendline (bearish).
9. Island Reversal
o How to Use: A gap followed by a price reversal and another gap in the opposite
direction.
o Where to Use: After a strong trend.

o When to Use: After the second gap, a reversal signal (bullish or bearish) occurs.

10. Diamond Top

 o How to Use: A pattern that looks like a diamond shape, formed by alternating swings.

o Where to Use: After a strong uptrend.

o When to Use: When price breaks below the bottom part of the diamond, signaling a
downtrend.
11. Diamond Bottom
o How to Use: Opposite of the diamond top, with alternating swings forming a diamond
shape.
o Where to Use: After a strong downtrend.

o When to Use: When price breaks above the top part of the diamond, signaling an
uptrend.

Trend Continuation Patterns

These patterns indicate that the current trend will likely continue.
12. Symmetrical Triangle
o How to Use: Two trendlines converging, with price moving within the triangle.

o Where to Use: In trending markets.

o When to Use: After a breakout (above or below the triangle), the trend continues in that
direction.
13. Ascending Triangle
o How to Use: A flat top with an upward-sloping bottom.

o Where to Use: In bullish trends.

o When to Use: After a breakout above the flat top, signaling a continuation of the uptrend.

14. Descending Triangle

o How to Use: A flat bottom with a downward-sloping top.
 o Where to Use: In bearish trends.

o When to Use: After a breakout below the flat bottom, indicating a continuation of the
downtrend.

15. Wedge (Rising Wedge)

o How to Use: A narrowing pattern with higher highs and higher lows.

o Where to Use: In uptrends.

o When to Use: When the price breaks below the wedge, signaling a potential downtrend.
16. Falling Wedge
o How to Use: A narrowing pattern with lower highs and lower lows.

o Where to Use: In downtrends.

o When to Use: When the price breaks above the wedge, signaling a potential uptrend.

17. Flag
o How to Use: A small rectangle pattern against the prevailing trend.
 o Where to Use: After a strong price movement.

o When to Use: After a breakout from the flag, the trend continues in the original
direction.

18. Pennant
o How to Use: A small triangle that forms after a strong price move.

o Where to Use: After a strong trend.

o When to Use: After a breakout from the pennant, the trend continues in the original
direction.
19. Rectangle (Channel or Range-bound)
o How to Use: Horizontal lines forming a box, with price moving between these levels.

o Where to Use: In range-bound markets.

o When to Use: A breakout above or below the rectangle signals a potential trend
continuation.
20. Cup and Handle
o How to Use: A rounded bottom (cup) followed by a smaller consolidation (handle).

o Where to Use: After an uptrend.

o When to Use: When price breaks above the handle, it signals a continuation of the
uptrend.
21. Bullish Continuation Flag
o How to Use: A small rectangular pattern after a sharp price increase.

o Where to Use: After a sharp upward movement.

o When to Use: A breakout above the flag signals a continuation of the uptrend.

22. Bearish Continuation Flag

o How to Use: A small rectangular pattern after a sharp price decrease.

o Where to Use: After a sharp downward movement.

o When to Use: A breakout below the flag signals a continuation of the downtrend.

Consolidation Patterns
These patterns show that price is taking a pause and might continue in either direction.
23. Rectangular Consolidation (Box Range)
 o How to Use: Horizontal price movement between support and resistance levels.

o Where to Use: In range-bound markets.

o When to Use: After a breakout from the rectangle, price can continue in that direction.

24. Broadening Formation (Megaphone)

o How to Use: A widening pattern with higher highs and lower lows.

o Where to Use: In volatile markets.

o When to Use: After a breakout from the formation, price continues in the breakout
direction.
25. Symmetrical Channel
o How to Use: Two converging trendlines forming a channel.

o Where to Use: In trending markets.

o When to Use: A breakout from the channel signals a potential trend continuation.

26. Horizontal Channel

o How to Use: Price moves within horizontal boundaries (support and resistance).

o Where to Use: In a range-bound market.

o When to Use: A breakout above or below the channel can signal a trend continuation.

Gap Patterns
These patterns indicate potential trend changes or continuation.
27. Breakaway Gap
o How to Use: A gap that occurs at the start of a trend.

o Where to Use: At the start of a strong trend.

o When to Use: After the gap, the trend continues in that direction.

28. Runaway Gap

o How to Use: A gap that occurs during the middle of a trend.

o Where to Use: In trending markets.

o When to Use: The gap signals that the trend is likely to continue.

29. Exhaustion Gap

o How to Use: A gap that occurs at the end of a trend.

o Where to Use: At the end of a strong trend.

 o When to Use: After the gap, watch for signs of trend reversal.

Here are more chart patterns you can use in technical analysis:
Trend Reversal Patterns (Continued)
These patterns help identify when the trend is about to change direction.
30. Broadening Wedge (Megaphone)
 How to Use: The price moves in a widening pattern with higher highs and lower lows.
 Where to Use: After a strong trend (up or down).
 When to Use: When the price breaks above the upper trendline or below the lower trendline,
signaling a reversal.
31. Falling Channel (Downward Channel)
 How to Use: A price pattern where the price moves in a downward sloping channel with lower
highs and lower lows.
 Where to Use: During a downtrend.
 When to Use: When the price breaks out of the channel to the upside, signaling a potential trend
reversal to bullish.
32. Rising Channel (Upward Channel)
 How to Use: The price moves in an upward sloping channel with higher highs and higher lows.
 Where to Use: During an uptrend.
 When to Use: When the price breaks out of the channel to the downside, signaling a potential
trend reversal to bearish.
33. Bearish Engulfing
 How to Use: A large bearish candlestick fully engulfs the previous smaller bullish candlestick.
 Where to Use: After an uptrend.
 When to Use: When this pattern appears, it signals a potential bearish reversal.
34. Bullish Engulfing
 How to Use: A large bullish candlestick fully engulfs the previous smaller bearish candlestick.
 Where to Use: After a downtrend.
 When to Use: When this pattern appears, it signals a potential bullish reversal.
35. Piercing Line
 How to Use: A bullish reversal pattern where a long bullish candlestick opens below the previous
bearish candlestick’s close but closes above its mid-point.
  Where to Use: After a downtrend.
 When to Use: When this pattern forms, it signals a potential reversal to an uptrend.
36. Dark Cloud Cover
 How to Use: A bearish reversal pattern where a large bearish candlestick opens above the
previous bullish candlestick’s close but closes below its mid-point.
 Where to Use: After an uptrend.
 When to Use: When this pattern forms, it signals a potential reversal to a downtrend.
37. Morning Star
 How to Use: A three-candlestick bullish reversal pattern consisting of a long bearish candlestick,
followed by a small-bodied candlestick (Doji or spinning top), and then a long bullish
candlestick.
 Where to Use: After a downtrend.
 When to Use: When the price closes above the previous high, signaling a reversal to bullish.
38. Evening Star
 How to Use: A three-candlestick bearish reversal pattern consisting of a long bullish candlestick,
followed by a small-bodied candlestick, and then a long bearish candlestick.
 Where to Use: After an uptrend.
 When to Use: When the price closes below the previous low, signaling a reversal to bearish.

Trend Continuation Patterns (Continued)

These patterns signal that the existing trend is likely to continue.
39. Symmetrical Broadening Triangle
 How to Use: A pattern where the price moves in a triangle shape, with lower highs and higher
lows.
 Where to Use: In both uptrends and downtrends.
 When to Use: When the price breaks out of the triangle, the trend continues in the breakout
direction.
40. Consolidation (Consolidation Range)
 How to Use: Price moves within a defined range, either horizontally or in a narrow channel.
 Where to Use: In both uptrends and downtrends.
 When to Use: A breakout above the upper boundary suggests a continuation of the uptrend;
below the lower boundary suggests a continuation of the downtrend.
 41. Bullish Pennant
 How to Use: A small triangle that forms after a sharp upward movement.
 Where to Use: After a strong upward price movement.
 When to Use: When the price breaks above the pennant, it signals a continuation of the uptrend.
42. Bearish Pennant
 How to Use: A small triangle that forms after a sharp downward movement.
 Where to Use: After a strong downward price movement.
 When to Use: When the price breaks below the pennant, it signals a continuation of the
downtrend.
43. Flagpole
 How to Use: A sharp price movement followed by a consolidation period.
 Where to Use: In trending markets.
 When to Use: After the consolidation, the price continues in the original direction (up or down).
44. Rising Wedge (Uptrend)
 How to Use: A narrowing pattern where price moves upward but with decreasing volume.
 Where to Use: During an uptrend.
 When to Use: When the price breaks below the lower trendline, signaling a possible reversal to
bearish.
45. Falling Wedge (Downtrend)
 How to Use: A narrowing pattern where price moves downward but with decreasing volume.
 Where to Use: During a downtrend.
 When to Use: When the price breaks above the upper trendline, signaling a possible reversal to
bullish.

Consolidation Patterns (Continued)

These patterns indicate price consolidation before a possible breakout.
46. Choppy Market
 How to Use: The market moves sideways in a zigzag pattern.
 Where to Use: In a market with no clear trend.
 When to Use: Watch for a breakout in either direction to confirm the next move.
47. Diamond Formation
  How to Use: A pattern with wide swings followed by tighter moves, forming a diamond shape.
 Where to Use: After strong price movements.
 When to Use: A breakout from the formation signals a continuation or reversal, depending on the
direction.

Gap Patterns (Continued)

These patterns provide important information about market sentiment and trends.
48. Common Gap
 How to Use: A small gap that occurs during normal trading activity.
 Where to Use: In trending markets.
 When to Use: This gap is less significant, but a follow-up trend can confirm its meaning.
49. Continuation Gap
 How to Use: A gap that occurs during a strong trend.
 Where to Use: In trending markets.
 When to Use: It signals that the current trend will likely continue.
50. Exhaustion Gap
 How to Use: A gap that appears near the end of a price movement.
 Where to Use: At the end of an uptrend or downtrend.
 When to Use: Watch for signs of a reversal after this gap appears, as it indicates the trend might
be running out of steam.

Support and resistance levels are key concepts in technical analysis that help traders identify potential
price points where the market may reverse or break through. Here’s a simple guide on how to add support
and resistance, when to use them, and where to use them:
What is Support and Resistance?
 Support: The price level at which an asset tends to find buying interest, causing the price to
reverse or pause its downward movement. It acts as a "floor."
 Resistance: The price level at which an asset tends to face selling pressure, causing the price to
reverse or pause its upward movement. It acts as a "ceiling."
How to Add Support and Resistance on a Chart:
1. Look for Previous Price Reactions: Identify price levels where the market has reversed
direction in the past (either from an uptrend to a downtrend or vice versa). These points often act
as support or resistance in the future.
 2. Use Horizontal Lines: Draw horizontal lines across the chart at the significant high (for
resistance) and low (for support) points.
3. Identify Swing Highs and Lows:
o Swing High: The highest point in a price movement before it turns down. This will be a
potential resistance level.
o Swing Low: The lowest point in a price movement before it turns up. This will be a
potential support level.
4. Check for Price Clusters: Support and resistance can also be identified where multiple price
points tend to cluster around the same level over a period of time.
5. Use Trendlines (for diagonal support/resistance): If the market is trending, draw trendlines to
identify diagonal support and resistance, which are typically based on higher highs or lower lows.

When to Use Support and Resistance:

 During Sideways (Range-bound) Markets: When the market is not trending and moving within
a certain range, support and resistance are particularly useful in predicting price reversals or
breakouts.
 During Trend Reversals: When the price is about to reverse direction (from uptrend to
downtrend or vice versa), key support and resistance levels often act as areas where price may
stall or reverse.
 After Breakouts: When the price breaks above resistance or below support, it can signal the start
of a new trend, and the previous support or resistance level can become a new reference point for
future price movements.
 During Consolidation: When the price is consolidating (moving sideways), support and
resistance help identify areas where the price might either break out or reverse direction.

Where to Use Support and Resistance:

1. Key Psychological Levels: Round numbers (like 100, 200, 1.0000 in forex, or $10, $50, $100 in
stocks) are often seen as psychological support or resistance levels. Traders pay close attention to
these levels.
2. Recent Highs and Lows: Identify recent swing highs and lows on the chart, as these often serve
as new support or resistance levels.
3. Moving Averages as Support/Resistance: In trending markets, moving averages (like the 50-day
or 200-day moving averages) can act as dynamic support or resistance levels.
4. Pivot Points: These are calculated support and resistance levels based on the previous day’s price
action and are commonly used for intraday trading.
 5. Previous Support/Resistance Zones: Zones or areas where the price has previously reversed
multiple times tend to become strong support or resistance in the future.

How to Use Support and Resistance in Trading:

 Buy at Support: In an uptrend, consider entering a buy position near support levels, where the
price tends to find support and reverse higher.
 Sell at Resistance: In a downtrend, consider entering a sell position near resistance levels, where
the price tends to reverse lower.
 Breakout Trades: When price breaks through resistance or support, it may indicate the start of a
new trend. Traders might enter long positions above resistance or short positions below support.
 Stop Loss Placement: Place stop-loss orders just below support for long positions, or just above
resistance for short positions, to manage risk in case the price moves against you.
 Reversal Confirmation: Watch for candlestick patterns (like Doji, Engulfing) near support or
resistance levels to confirm potential reversals.

Example:
 Support Example: In a downtrend, the price may reach a support level (e.g., $50). If it bounces
up from this point, the support level may hold, and the trader could buy the asset, anticipating a
bounce higher.
 Resistance Example: In an uptrend, the price may reach a resistance level (e.g., $100). If it faces
selling pressure and starts to drop, the trader may sell or short the asset, anticipating a price
reversal.

Key Points to Remember:

 Support and resistance levels are not always exact numbers; they are zones or areas where price
reactions are likely.
 The more times price touches a support or resistance level without breaking it, the stronger the
level becomes.
 When price breaks through support, it often turns into resistance (and vice versa).
By combining support and resistance with other indicators like moving averages, trendlines, or
oscillators, traders can increase their chances of making profitable trades.

Simplified Summary
 Reversal Patterns:
o Abandoned Baby (Bullish/Bearish): Look for reversals after a gap near key levels.
 o Matching Low: Use for strong support in a downtrend.

o Matching High: Use for strong resistance in an uptrend.

 Hesitation/Weakening Patterns:
o Deliberation: Signals a pause or reversal after a strong trend.

o Advance Block: Shows slowing momentum in an uptrend, indicating a potential bearish

reversal.
 Key Locations:
o Bullish patterns: Look near support or at the end of a downtrend.

o Bearish patterns: Look near resistance or at the end of an uptrend.

These patterns help predict market turns or pauses, providing valuable trading signals.

Simplified Summary
 Breakout Patterns (Inside Bar, Outside Bar): Use for breakouts near key levels.
 Reversal Patterns (Island Reversal, Belt Hold, Kicker, Breakaway): Look for strong trend
changes at support/resistance.
 Gap Patterns (Window, Breakaway): Confirm trend direction during strong price moves.
 Bullish Patterns: Look for these in downtrends to predict upward moves.
 Bearish Patterns: Look for these in uptrends to predict downward moves.
These patterns are useful for predicting market movements and making better trading decisions.

Simple Summary
 Continuation Patterns: Confirm ongoing trends.
 Bullish Patterns:
o Rising Three Methods: Brief pullback in an uptrend before continuing higher.

o Bullish Separating Lines: Strong upward move resumes after temporary selling.

o Upside Tasuki Gap: Bullish continuation with a gap and minor pullback.

o Mat Hold Pattern: Short pause followed by a strong bullish continuation.

o Side-by-Side White Lines: Consistent bullish candles showing strong momentum.

 Bearish Patterns:
o Falling Three Methods: Brief pullback in a downtrend before continuing lower.
 o Bearish Separating Lines: Strong downward move resumes after temporary buying.

o Downside Tasuki Gap: Bearish continuation with a gap and minor pullback.

o Side-by-Side White Lines: Consistent bearish candles showing strong momentum.

Use these patterns during trending markets to confirm whether the trend will continue.

Summary
 Bullish Patterns (Bullish Engulfing, Piercing Pattern, Tweezer Bottoms, Bullish Harami,
Bullish Harami Cross): Spot reversals in downtrends.
 Bearish Patterns (Bearish Engulfing, Dark Cloud Cover, Tweezer Tops, Bearish Harami,
Bearish Harami Cross): Spot reversals in uptrends.
 Tweezer Patterns: Use at support or resistance for early reversal signals.
 Harami and Harami Cross Patterns: Identify market indecision before potential reversals.

Summary
 Doji, Spinning Top: Show indecision and possible reversals.
 Hammer, Inverted Hammer: Spot reversals in a downtrend.
 Hanging Man, Shooting Star: Spot reversals in an uptrend.
 Marubozu: Confirm strong bullish or bearish momentum.
Summary
 Bullish Patterns:
o Morning Star, Morning Doji Star, Three White Soldiers, Three Inside Up.

o Use these in downtrends near support to spot reversals or upward momentum.

 Bearish Patterns:
o Evening Star, Evening Doji Star, Three Black Crows, Three Inside Down.

o Use these in uptrends near resistance to spot reversals or downward momentum.

 Doji Variations: Show indecision before a reversal.

 Three Soldiers/Crows: Show strong trends in bullish or bearish directions.