Japanese Candlestick Patterns Reference

This reference provides definitions and recognition logic for common Japanese candlestick patterns.

1. Hammer & Hanging Man

  • Description: Small body at the upper end of the trading range, long lower shadow.
  • Logic:
    • Body: abs(Open - Close)
    • Lower Shadow: abs(Low - min(Open, Close))
    • Upper Shadow: abs(High - max(Open, Close))
    • Requirement: Lower Shadow >= 2 * Body.
    • Requirement: Upper shadow is very short or non-existent.
  • Context:
    • Hammer: Occurs after a downtrend, bullish reversal signal.
    • Hanging Man: Occurs after an uptrend, bearish reversal signal.

2. Engulfing Pattern (吞没形态)

  • Description: Two candles where the second candle’s body completely “engulfs” the first candle’s body.
  • Logic:
    • max(Open2, Close2) > max(Open1, Close1)
    • min(Open2, Close2) < min(Open1, Close1)
    • (Open1 - Close1) * (Open2 - Close2) < 0 (Opposite colors/directions)
  • Context:
    • Bullish Engulfing: Second candle is white (阳线), first is black (阴线), occurs after downtrend.
    • Bearish Engulfing: Second candle is black (阴线), first is white (阳线), occurs after uptrend.
    • Pre-requisite: Must follow a clear trend, not horizontal movement.

3. Dark Cloud Cover & Piercing Pattern (乌云盖顶与刺进形态)

Dark Cloud Cover (乌云盖顶)

  • Context: Occurs after an uptrend.
  • Logic:
    • Candle 1: Strong white (阳线).
    • Candle 2: Opens above Candle 1’s High, but closes deep within Candle 1’s body.
    • Strict Requirement: Close2 must be below the midpoint of Candle 1’s body (Close2 < (Open1 + Close1) / 2).

Piercing Pattern (刺进形态)

  • Context: Occurs after a downtrend.
  • Logic: Opposite of Dark Cloud Cover. Close2 must be above the midpoint of Candle 1’s body.

4. Star Patterns (星线)

  • Description: Small body that “gaps” away from the previous large body.

Morning Star (启明星)

  • Structure: 3 candles.
  • Logic:
    1. Large black (阴线) body.
    2. Small body (Star) that gaps down from Candle 1’s body.
    3. White (阳线) body that moves deep into Candle 1’s body.

Evening Star (黄昏星)

  • Structure: 3 candles.
  • Logic:
    1. Large white (阳线) body.
    2. Small body (Star) that gaps up from Candle 1’s body.
    3. Black (阴线) body that moves deep into Candle 1’s body.

Variations:

  • Doji Star: The middle star is a Doji (Open ≈ Close).
  • Abandoned Baby: Gaps exist between the star and both flanking candles (rare and strong).
  • Shooting Star: Small body at the lower end, long upper shadow, occurs after uptrend.