1.

Hammer:

Hammer is a bullish reversal candlestick pattern

that occurs at the bottom of a downtrend.

This bullish candlestick pattern is formed when the

open and low prices are almost the same. This
pattern should consist of a lower shadow which is
twice as long as the real body.

When identifying this pattern when should

remember that the prior trend is a downtrend.

This pattern is formed when the real body is small

along with a long lower shadow which shows that
bears were trying to push down the prices but they
were unable to do so.

A bullish candlestick should be formed after the

Hammer which confirms that the bullish reversal
has taken place.

Below is the daily chart of Nifty 50 in which all the

above 3 points are demonstrated:
2. The Piercing Pattern:

A piercing pattern is a candlestick pattern that gives us

potential bullish reversal signs and it is formed near the
support levels at the end of a downtrend.

This pattern is made of two candlesticks, the first one is a

bearish candlestick and the second one is a bullish
candlestick.

The bearish candlestick should have a large real body and

the second bullish candlestick should be below the low of
the previous candlestick and should close above the
middle of the real body of the first candlestick.

Below is an example of the piercing pattern in the daily

chart of Sunpharma Industries Ltd.
3. Bullish Engulfing:

The bullish engulfing candlestick pattern indicates

bullish reversal which shows a rise in the buying pressure.

This pattern indicates a reversal from downtrend as more

buyers enter the market and move the prices up after a
long downtrend,

The pattern consists of two candles with the second

green candle completely engulfing the ‘body’ of the
previous red candle.

One should remember when trading with a Bullish

engulfing pattern the prior trend should be a downtrend.

Also, don’t forget to confirm the reversal signals given by

this pattern with other technical indicators as we have to
use the Relative Strength Index in our below example.
4. The Morning Star:

The morning Star is a triple bullish candlestick pattern

which indicates a bullish reversal.

As it is formed at the end of a downtrend it gives us a

warning sign that the downtrend is going to reverse to an
uptrend.

It consists of three candles; a bearish candlestick, the

second one can be either bullish or bearish with a small
body, and the third candlestick is a bullish candle.

One should remember when trading with the Morning Star

pattern the prior trend should be a downtrend.

For confirming the reversal signals given by this pattern

traders can use other technical indicators as we have to
use Relative Strength Index in our below example.
5. The Three White Soldiers:

The three white soldiers pattern is a bullish candlestick

pattern occurring at the end of a downtrend and indicating
a bullish reversal.

This pattern consists of three long bullish candlesticks

which are green in color and do not have long shadows.

This bullish candlestick pattern signals uptrend reversal

because of the strong buying pressure by the buyers.

All the three candlesticks and open within the real body of
the previous candle in the pattern.

Below is an example of a daily chart of USD/INR that

shows us how Three Soldiers Candlesticks is formed after
a downtrend:
Key Takeaways:

 Hammer is abullish candlestick pattern that is formed

when the open and low prices are almost the same.
 A piercing pattern is a candlestick pattern that gives
us potential bullish reversal signs and it is formed
near the support levels at the end of a downtrend.
 The bullish engulfing candlestick pattern indicates
bullish reversal which shows a rise in the buying
pressure.
 The morning star consists of three candles; a bearish
candlestick, the second one can be either bullish or
bearish with a small body, and the third candlestick
is a bullish candle.
 The three white soldiers pattern is a bullish
candlestick pattern occurring at the end of a
downtrend and indicating a bullish reversal.