Price Action Patterns

Pattern Library

• Engulfing Candlestick Pattern — The engulfing pattern is one of the most widely recognised two-candle reversal signals. A bullish engulfing occurs when a small bearish candle is completely engulfed by a larger bullish candle, suggesting buyers have overwhelmed sellers. The bearish engulfing is the mirror image.
• Hammer Candlestick Pattern — The hammer is a bullish reversal candlestick pattern that forms after a decline. It shows that sellers pushed price sharply lower during the bar, but buyers stepped in and forced price back up before the close. That rejection of lower prices can signal that bearish momentum is weakening.
• Pin Bar (Pinocchio Bar) — The pin bar is a single-candle reversal pattern characterised by a long wick (or shadow) that 'probes' beyond a key level before price snaps back. It signals rejection of a price level and is one of the most popular patterns among price action traders.
• Doji Candlestick Pattern — The doji is a candle where the open and close are virtually the same, creating a cross-like shape. It represents indecision between buyers and sellers. While not a strong directional signal on its own, a doji at a key level after a strong move can precede significant reversals.
• Morning Star & Evening Star Patterns — The morning star and evening star are three-candle reversal patterns. The morning star signals a potential bullish reversal at the end of a downtrend, while the evening star warns of a bearish reversal after an uptrend. They are among the most reliable candlestick patterns when they appear at significant price levels.
• Inside Bar Pattern — An inside bar is a candle whose entire range (high to low) fits within the range of the previous candle. It represents a contraction in volatility and consolidation. Inside bars often precede breakout moves and are popular among price action traders for both continuation and reversal setups.
• Three White Soldiers & Three Black Crows — Three white soldiers consist of three consecutive long bullish candles, each opening within the previous candle's body and closing progressively higher. Three black crows are the bearish equivalent. These patterns signal strong conviction and are often seen at the start of powerful trend moves.
• Marubozu Candlestick Pattern — A marubozu is a single candle with no (or very small) shadows — the open equals the low and the close equals the high (bullish marubozu), or the open equals the high and the close equals the low (bearish marubozu). It represents complete dominance by one side of the market.