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Six bullish candlestick patterns are described that signal a reversal from a downtrend to an uptrend. These include the hammer, inverse hammer, bullish engulfing, piercing line, morning star, and three white soldiers patterns. Each pattern indicates buying pressure is overcoming selling pressure through features like long lower wicks, engulfing of previous candles, or three consecutive candles closing higher. Traders can use these patterns to identify opportunities to open long positions and profit from an emerging upward trend.

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Chandradip Adhikari
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25 views

Untitled Document

Six bullish candlestick patterns are described that signal a reversal from a downtrend to an uptrend. These include the hammer, inverse hammer, bullish engulfing, piercing line, morning star, and three white soldiers patterns. Each pattern indicates buying pressure is overcoming selling pressure through features like long lower wicks, engulfing of previous candles, or three consecutive candles closing higher. Traders can use these patterns to identify opportunities to open long positions and profit from an emerging upward trend.

Uploaded by

Chandradip Adhikari
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Six bullish candlestick

patterns
Bullish patterns may form after a market downtrend, and signal a
reversal of price movement. They are an indicator for traders to
consider opening a long position to profit from any upward
trajectory.

Hammer
The hammer candlestick pattern is formed of a short body with a
long lower wick, and is found at the bottom of a downward trend.

A hammer shows that although there were selling pressures during


the day, ultimately a strong buying pressure drove the price back
up. The colour of the body can vary, but green hammers indicate a
stronger bull market than red hammers.
Inverse hammer
A similarly bullish pattern is the inverted hammer. The only
difference being that the upper wick is long, while the lower wick is
short.

It indicates a buying pressure, followed by a selling pressure that


was not strong enough to drive the market price down. The inverse
hammer suggests that buyers will soon have control of the market.
Bullish engulfing
The bullish engulfing pattern is formed of two candlesticks. The first
candle is a short red body that is completely engulfed by a larger
green candle.

Though the second day opens lower than the first, the bullish
market pushes the price up, culminating in an obvious win for
buyers.

Piercing line
The piercing line is also a two-stick pattern, made up of a long red
candle, followed by a long green candle.

There is usually a significant gap down between the first


candlestick’s closing price, and the green candlestick’s opening. It
indicates a strong buying pressure, as the price is pushed up to or
above the mid-price of the previous day.

Morning star
The morning star candlestick pattern is considered a sign of hope in
a bleak market downtrend. It is a three-stick pattern: one
short-bodied candle between a long red and a long green.
Traditionally, the ‘star’ will have no overlap with the longer bodies,
as the market gaps both on open and close.

It signals that the selling pressure of the first day is subsiding, and a
bull market is on the horizon.
Three white soldiers
The three white soldiers pattern occurs over three days. It consists
of consecutive long green (or white) candles with small wicks, which
open and close progressively higher than the previous day.

It is a very strong bullish signal that occurs after a downtrend, and


shows a steady advance of buying pressure.

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