Pattern Cheat Sheet & Best Practices

Here's your quick reference for all patterns organized by signal type and reliability.

Strong (Most Reliable):
- Morning Star / Morning Doji Star
- Bullish Engulfing
- Bullish Kicker
- Three White Soldiers
- Abandoned Baby (bullish)
- Three Line Strike (bullish)

Moderate:
- Hammer
- Piercing Line
- Tweezer Bottom
- Bullish Harami

Weak (Need confirmation):
- Inverted Hammer
- Bullish Belt Hold
- On-Neck (sometimes fails)

Strong (Most Reliable):
- Evening Star / Evening Doji Star
- Bearish Engulfing
- Bearish Kicker
- Three Black Crows
- Abandoned Baby (bearish)
- Three Line Strike (bearish)

Moderate:
- Shooting Star
- Dark Cloud Cover
- Tweezer Top
- Bearish Harami

Weak (Need confirmation):
- Hanging Man
- Bearish Belt Hold

Bullish Continuation:
- Rising Three Methods
- Mat Hold (bullish)
- Tasuki Gap (bullish)

Bearish Continuation:
- Falling Three Methods
- Mat Hold (bearish)
- Tasuki Gap (bearish)

1. Context is Everything
- Reversal patterns need a prior trend to reverse
- Pattern at support/resistance > pattern in no-man's land

2. Volume Confirmation
- Higher volume on pattern = more reliable
- Especially important for engulfing and soldiers/crows

3. Wait for Confirmation
- Don't act on the pattern candle itself
- Wait for next candle to confirm direction

4. Use Multiple Timeframes
- Pattern on daily + pattern on 4H = stronger signal
- Higher timeframe pattern > lower timeframe

5. Set Proper Stops
- Below/above the pattern extreme
- Account for ATR/volatility

1. Pattern Hunting: Seeing patterns that aren't there because you want to trade

2. Ignoring Context: A hammer in a strong downtrend is less reliable than one at major support

3. No Stop Loss: Patterns fail - always have an exit plan

4. Overcomplicating: Simple patterns (engulfing, hammer) work as well as exotic ones

5. Ignoring Higher Timeframe: A bullish pattern on 5m means nothing if daily is bearish

You've completed the Candlestick Pattern Encyclopedia! You now know:

- 40+ candlestick patterns
- Single, double, and multi-candle formations
- Reversal vs continuation signals
- How to combine patterns with context

Practice spotting these patterns in real charts. Start with the common ones (Hammer, Engulfing, Morning/Evening Star) before looking for exotic patterns.