There are many different Japanese candlestick patterns out there. Hundreds of them. It is a bit overwhelming and intimidating because you start to think maybe you are missing out on trades because you don’t know enough candlestick patterns. I used to think that but then I realized I don’t need to learn all of them, I just need to learn the ones that suit my trading style. I am not really concerned about continuation patterns, so I don’t look for those patterns. I like to trade the markets when they have turned from a top or a bottom. So I learned the reversal patterns.
I have 14 main reversal candlestick patterns that I memorized and that I look for daily in my trading. They are:
- Bearish Harami Cross
- Bullish Harami Cross
- Bearish Engulfing
- Bullish Engulfing
- Piercing Line (a bullish pattern)
- Dark Cloud Cover (a bearish pattern)
- Morning Star (a bullish pattern)
- Evening Star (a bearish pattern)
- Shooting Star (a bearish pattern)
- Hammer (a bullish pattern)
- Long Lower Shadow (a bullish pattern)
- Long Upper Shadow (a bearish pattern)
- Inside Down (a bearish pattern)
- Inside Up (a bullish pattern)
I get more into these patterns in my ebook, which you can download here.
When I see one of these patterns I look more closely at what is going on in the market and if my analysis agrees with the pattern I will initiate a trade.