Reversal Japanese Candlestick Patterns is a little hard to learn, A shift in the market psychology that can reverse a trend is termed as reversal. Technical analysts spend their time in finding those price clues that can be helpful and alert them of a possible price reversal. Reversal patterns are such technical price clues that can alert the analysts about a possible price reversal. Trend reversal occurs slowly and in stages so it is important to understand that trend reversal does not mean the ending of an old trend abruptly and reversing to new but it means changing of the trend and this change is rarely a reversal. For example, if 1.3 is the value in the chart and rises to 1.4 then if the trend changes it may lower to 1.38 but lowering of it to 0.7 is least possible. Reversal Japanese Candlestick Patterns using by professional Forex traders , to identify the reversals, there is certain reversal patterns discussed below.
Reversal Japanese Candlestick Patterns
Bullish Engulfing Pattern
Bullish Engulfing Pattern also known as Piercing Pattern mixes into a hammer and can signal a reversal if it appears in a downtrend. Characteristics of this pattern include a hollow candle gaps reduce on the open after a filled candle but this hollow candle closes with in the area of the previous filled candle. A bullish reversal is signaled by the longer lower shadow. This pattern can be seen in the figure below.
Reversal Japanese Candlestick Patterns
Bearish Engulfing Pattern
Bearish Engulfing Pattern also known as Dark Cloud Cover forms a shooting star. The longer upper portion of this shooting star signals a bearish reversal. A reversal on the way is expected if this pattern occurs during rally. In this pattern, a long hollow real body is followed by a filled candle. The opening price of the filled candle is higher than its previous closing price but the current closing price of this candle lies within the hollow candle body. This pattern can be seen in the figure below.
bearish engulfing Reversal Japanese Candlestick Pattern
Morning Star
A pattern of three candles that signals the bottom reversal is the Morning Star pattern. The description of the three candles is written as below.
First candle is long filled real body.
Second candle does not touch the body of the previous candle and is made with a small real body that is either hollow or filled.
Third candle is hollow real body and this candle does not trade outside the first filled candle.
Morning star candlestick is shown in the figure below.
Morning Star Japanese Candlestick Pattern
Evening Star Reversal Japanese Candlestick Patterns
The bearish reversal in this pattern is similar to the pattern of the Morning Star. The only difference between the two is that Evening Star occurs in a market rally. Evening Star also signals the starting of a downtrend. Evening Star is also a pattern of three candles similar to the Morning Star. In Forex education category i explain more and the description of the three candles is written as below.
First Candle is long hollow real body.
Second candle does not touch the body of the previous candle and is made with a small real body that is either hollow or filled.
Third candle is filled real body and this candle does not trade outside the first hollow candle. Evening star candlestick is shown in the figure below.
Evening Star Japanese Candlestick Pattern
Doji Star
Doji is called Doji Star if a Doji gaps over a real body when the market is rising or if a Doji gaps below a real body when the market is falling. Doji stars give a strong warning that the previous trend is ready to change. Doji Stars are of two types, Evening Doji Star and Morning Doji Star. Evening Doji and Morning Doji star are shown in the figure below.
Doji Star Japanese Candlestick Pattern
Shooting Star
A bearish reversal is signaled by the shooting star pattern appearing during an uptrend. In this pattern, the upper shadow is long, the lower shadow is either little or absent and the real body is small and appears near the lower side of the Forex Trading range of this period. Shooting star candlestick is shown in the figure below.
Shooting Star Japanese Candlestick Pattern
Hammer
Hammer is the candlestick pattern appearing during a downtrend. The appearance of this pattern indicates the finish of a downtrend and beginning of a reversal. There is no upper shadow in this pattern and the real body is small and either hollow or filled. Hammer candlestick is shown in the figure below.
hammer Japanese Candlestick Pattern
Inverted Hammer
Inverted Hammer resembles with the shooting star pattern. This foreign exchange pattern contains a long upper shadow with a small real body appearing at the lower side of the range. The only difference between the shooting star and an inverted hammer is that the shooting star shows a top reversal line whereas the inverted hammer represents the bottom reversal line that means it is the bullish pattern that occurs after a downtrend. Inverted Hammer candlestick is shown in the figure below.
Inverted Hammer Japanese Candlestick Pattern
Hanging Man
Hanging Man looks like Hammer with long lower shadows, small real bodies are either hollow or filled and upper shadows are either short or do not exist. Hanging Man emerges after a rally and tells that the previous move may end. This pattern is named Hanging Man because this patter appears same as a man hanging with dangling legs. Hanging Man candlestick pattern is shown in the figure below.
Hanging Man Japanese Candlestick Pattern
Tweezers Top and Tweezers Bottom
Tweezers are two or more candles in which either highs match or lows match. Tweezers are made of shadows, real bodies and/or doji. Tweezers are so named because these can be compared with the two prongs of the tweezers. In an uptrend, highs match and the Tweezers top is created and in downtrend, lows match and Tweezers bottom is created. Tweezers Top and Tweezers Bottom patterns are shown in the figure below.
Tweezers Top And Bottom Japanese Candlestick Pattern