Candlestick Patterns 4.

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Metatrader (MT4/MT5) Indicator

 Overview

The Candlestick Patterns indicator recognizes over 30 Japanese Candlestick Patterns and
highlights them beautifully on the chart. It is simply one of those indicators price action
traders can't live without.

o Boost your technical analysis overnight

o Detect japanese candlestick patterns easily

o Trade reliable and universal reversal patterns

o Hop onto established trends safely using continuation patterns

o The indicator is non-repainting and implements alerts

o It includes a multi-symbol and multi-timeframe scanner

o The scanner scans all the instruments in the Market Watch

o The indicator implements a multi-timeframe dashboard

It detects so many patterns that the chart might look really cluttered, making it difficult to
read. The trader might need to disable undesired patterns from the indicator inputs to make
the chart more readable.

o It detects 1-bar, 2-bar, 3-bar and multi-bar patterns

o It detects reversal, continuation and weakness patterns

o Patterns can be enabled or disabled

Enhance your trading activity with the best and most complete Candlestick Patterns
Recognition indicator, just like our customers have already done.

Reversal Patterns

The indicator recognizes the following reversal patterns.

Break-Away (a.k.a Line Strikes)

This Candlestick Pattern could also be called Pump and Dump, and only differs from the
Morning Star in the number of congestion bars present before the latest market participants
are caught with their pants down. This particular formation might take place with or without
gaps, and with or without breaking the low of the first bar.
Fakey (a.k.a Hikkake)
The Fakey Pattern indicators rejection of an important level within the market. The pattern
consists of an inside bar followed by a false break and then a close back within its range.
The entry is triggered as price moves back up past the high of the inside bar. The opposite
applies in the bearish version.
Counter Gaps
Sometimes a gap becomes a sudden and explosive reversal, in which bulls or bears counter-
attack and force other market participants to cover their positions. Several patterns are used
to describe this situation, but the indicator blends all of them into one single pattern. This
pattern has only one implication: you should trade the reversal and help the big hands to take
down the price
Three Soldiers / Three Crows
A candlestick pattern that is used to predict the reversal of the current downtrend. This
pattern consists of three consecutive long-bodied candlesticks that have closed higher than
the previous day, with each session's open occurring within the body of the previous candle.
Opposite for shorts.
Hammers / Shooting Star / Hanging Man
Hammer candlesticks form when a security moves significantly lower after the open, but
rallies to close well above the intraday low. The Shooting Star is a single day pattern that
can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It
looks just like a Hammer turned upside down, indicating that buyers are not willing to bid
the price higher.
Engulfing
This reversal pattern consists of two candles. The first day is a narrow range candle that
closes down for the day. The sellers are still in control of the stock but because it is a narrow
range candle and volatility is low, the sellers are not very aggressive. The second day is a
wide range candle that "engulfs" the body of the first candle and closes near the top of the
range. The opposite applies in the bearish version.
Outside Up / Outside Down
This pattern is one of the more clear-cut three day bullish reversal patterns. The formation
reflects buyers overtaking selling strength, and often precedes a continued rally in price. In
fact up to day-two we have a bullish Engulfing pattern, itself a strong two-day reversal
pattern, and this pattern emerges when we wait for confirmation.
Harami
When you see this pattern the first thing that comes to mind is that the momentum preceding
it has stopped. On the first day you see a wide range candle that closes near the bottom of
the range. The sellers are still in control of this security. Then on the second day, there is
only a narrow range candle that closes up for the day. This pattern is not especially reliable,
it is better to wait for confirmation using the Inside Up or Inside Down pattern.
Inside Up / Inside Down
This is a three-bar reversal pattern. Up to day-two we have a simple Bullish Harami pattern.
Haramis give a clear-cut formation reflecting buyers overtaking the strength in the
downtrend. This formation often precedes a continued rally in price. With just a Harami
pattern, most candlestick analysts will usually wait for additional conformation before
entering a long position. The Inside formation is that confirmation.
Morning Star / Evening Star
A three day bullish reversal pattern that is very similar to the Morning Star. The first day is
in a downtrend with a long black body. The next day opens lower with a Doji that has a
small trading range. The last day closes above the midpoint of the first day. The Morning
Star is the basic anatomy of a sudden Pump and Dump operation in the market.
Kickers
Kickers are one of the most explosive and powerful reversal patterns. Like most candle
patterns there is a bullish and bearish version. In the bullish version, the security is moving
down and the last red candle closes at the bottom of the range. Then, on the next day, the
stock gaps open above the previous day's high and close. This "shock event" forces short
sellers to cover and brings in new traders on the long side. The opposite takes place in the
bearish version.
Piercing / Dark Cloud
This is also a two-candle reversal pattern where on the first day you see a wide range candle
that closes near the bottom of the range. The sellers are in control. On the second day you
see a wide range candle that has to close at least halfway into the prior candle. Those that
shorted the security on first day are now sitting at a loss on the rally that happens on the
second day. This can set up a powerful reversal.
Belt Hold
A significant gap down occurs. The remaining price action for the day occurs to the upside.
This triggers a buying spree. Shorts cover their positions due to concern over this price
action. The opposite applies in the bearish version. This pattern has only one implication:
you should trade the reversal and help the big hands to take down the price.

Continuation Patterns

The indicator recognizes the following continuation patterns.

Rising Three / Falling Three

A bullish continuation pattern in which a long white body is followed by three small body
days, each fully contained within the range of the high and low of the first day. The fifth day
closes at a new high and forces bears to cover their shorts. The opposite applies in the
bearish version. This is one of the most reliable continuation patterns available. The PZ
Candle Patterns indicator can recognize rising and falling patterns of multiple bars in length.
Tasuki Gap
A continuation pattern with a long white body followed by another white body that has
gapped above the first one. The third day is black and opens within the body of the second
day, then fills in the gap between the first two days, but does not close the gap. This
suggests that the uptrend will continue and might be a good time to get into the market at a
good price. The opposite applies in the bearish version.
Side by Side Gap
A continuation pattern with a long white body followed by another white body that has
gapped above the first one. The gap might be closed or not, but two bullish days announce
that the market is inclined to climb higher. This pattern is much more effective if the third
day closes above the second day's high. The opposite applies in the bearish version.
Windows
The same as a Western gap. Windows are continuation candlestick patterns. When the
market opens a window to the upside, it is a rising window. It is a bullish candlestick pattern
and the rising window should be support. There is much psychology behind windows. Gaps
can act as resistance or support. The trend might continue strongly or it might fill the gap
first. The market can also reverse right after a gap.

Weakness Patterns

The indicator recognizes the following weakness patterns.

Advance Block / Descend Block

This formation is similar to the Three Soldiers formation. However, the Advance Block
chart alerts traders to the weakness of the upside price action since the close of the second
and third days are significantly less than their highs, each bar having a smaller body and
longer upper wick than the preceding one. The opposite applies in the bearish version. A
variation of this pattern, also recognized, is Three Stars in the north and Three Stars in the
south, which only difference is that each bar makes a lower high than the previous one.
 Deliberation
This formation is very similar to the Advance Block and Descend Block patterns. The key
difference is that all of the weakness shows up on the third day. The first two days have
powerful upward moves. The quick change in sentiment opens the window for daytraders to
initiate shorts or capture profits. This pattern is not very reliable, but it certainly sets the
mood for a convincing reversal pattern in the future.

Neutral Patterns

The indicator recognizes the following neutral patterns.

Marubozu
The Marubozu takes place when a security has traded strongly in one direction throughout
the session and closed at its high or low price of the day. A marubozu candle is represented
only by a body; it has no wicks or shadows extending from the top or bottom of the candle.
The white marubozu candle indicates that buyers controlled the price of the stock from the
opening bell to the close of the day, and is considered very bullish. The opposite applies in
the bearish version.
Squeeze Alert (a.k.a Master Candle)
Just as its name suggests, the squeeze alert pattern should be treated as a valuable alert
signal that the market is in for a swift and dramatic change of direction. This three
candlestick formation rarely occurs, but when it does you should immediately tighten your
stoploss and trade the next breakout of the master candle when it takes place.
Dojis
The doji is probably the most popular candlestick pattern. The stock opens up, goes nowhere
throughout the day and closes right at or near the opening price. Quite simply, it represents
indecision and causes traders to question the current trend. Several dojis and other
indecision patterns together usually mean that a squeeze is coming, and are useful to detect
congestion zones. Variations like Long Legged Doji, Dragonfly Doji, Gravestone Doji and
stars are not worth detecting, since their trading implications are not much different.
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