Three-candle patterns

Japanese name: ake no myojo

A three-candle pattern: a long bearish candle, a small candle (the star) with a gap down, and a long bullish candle that closes deep into the body of the first. Like Venus, which rises before the sun – it heralds higher prices.

How to recognize it

• Appears after a decline
• Candle 1: long bearish body
• Candle 2: small body (star), ideally with a gap below candle 1
• Candle 3: bullish, closes above the middle of the body of candle 1

The psychology

Candle 1 – sellers dominate. Candle 2 – the market pauses, no one is in control. Candle 3 – buyers take over and push price up. A clear story: strength → indecision → reversal.

How to trade it

Entry

At the close of candle 3 or on a retest of its middle.

Stop-loss

Below the low of the star (candle 2).

Target

The open of candle 1, then the next resistance; 2–3R.

Japanese name: yoi no myojo

A long bullish candle, a small candle (the star) above it, and a long bearish candle that closes deep into the body of the first. The mirror image of the morning star.

How to recognize it

• Appears after a rise
• Candle 1: long bullish body
• Candle 2: small body, ideally with a gap above candle 1
• Candle 3: bearish, closes below the middle of the body of candle 1

The psychology

Buyers are at the peak of their strength, then comes a stall, and after that sellers take over decisively. The star is the trend's “last evening”.

How to trade it

Entry

At the close of candle 3 or on a bounce to its middle.

Stop-loss

Above the high of the star.

Target

The open of candle 1, then the next support; 2–3R.

Like the morning star, but the middle candle is a doji. Indecision is at its maximum, so the pattern is slightly stronger.

How to recognize it

• Appears after a decline
• Candle 1: long bearish body
• Candle 2: a doji below the body of candle 1
• Candle 3: a strong bullish candle, closes above the middle of candle 1

The psychology

Complete equilibrium after a strong decline, followed by decisive buying.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Below the low of the doji.

Target

2–3R.

Like the evening star, but the middle candle is a doji.

How to recognize it

• Appears after a rise
• Candle 1: long bullish body
• Candle 2: a doji above the body of candle 1
• Candle 3: strong bearish, closes below the middle of candle 1

The psychology

Buyers reach the top, the market freezes, then sellers take over decisively.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Above the high of the doji.

Target

2–3R.

Japanese name: sutego

A rare and very strong pattern: a bearish candle, a doji with a gap down (its wicks don't touch the other candles) and a bullish candle with a gap up. The doji is left “abandoned”, alone on the island.

How to recognize it

• Appears after a decline
• Candle 1: bearish
• Candle 2: a doji whose high is below the low of candle 1 (gap)
• Candle 3: bullish, with its low above the high of the doji (gap)

The psychology

Panic peaks with the gap down, the market freezes, and then buyers come back so strongly that they open with a gap up. Everyone who sold at the bottom is trapped.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Below the low of the doji.

Target

2–3R+.

Japanese name: sutego

A bullish candle, a doji with a gap up and a bearish candle with a gap down. The doji is “abandoned” above the market.

How to recognize it

• Appears after a rise
• Candle 1: bullish
• Candle 2: a doji with its low above the high of candle 1
• Candle 3: bearish, with its high below the doji's low

The psychology

Euphoria (gap up), a stall and panic (gap down). Those who bought at the top are trapped.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Above the high of the doji.

Target

2–3R+.

Japanese name: akasanpei

Three consecutive long bullish candles, each opening within the body of the previous one and closing at a new high near its top.

How to recognize it

• Appears after a decline or consolidation
• Three long bullish candles
• Each opens within the body of the previous one
• Each closes near its high (small upper wicks)

The psychology

Buyers take control and show it three periods in a row. Sustained upward pressure – not a one-off fluke.

How to trade it

Entry

On a retest to the middle of the third candle (don't chase!).

Stop-loss

Below the middle of the first candle or below the pattern's low.

Target

Next major resistance.

Japanese name: sanba garasu

Three consecutive long bearish candles, each opening within the body of the previous one and closing at a new low near its bottom.

How to recognize it

• Appears after a rise
• Three long bearish candles
• Each opens within the body of the previous one
• Each closes near its low

The psychology

Sellers dominate three periods in a row. The “crows” land at the top – a grim omen for buyers.

How to trade it

Entry

On a bounce to the middle of the third candle.

Stop-loss

Above the middle of the first candle or above the pattern's high.

Target

Next major support.

A bullish harami confirmed by a third bullish candle that closes above the high (the open) of the first candle.

How to recognize it

• Candles 1 and 2 form a bullish harami
• Candle 3: bullish, closes above the open of candle 1
• Appears after a decline

The psychology

The harami shows the trend stopping, and the third candle proves that buyers have taken control. This is the “confirmed harami”.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Below the low of candle 1.

Target

2R.

A bearish harami confirmed by a third bearish candle that closes below the low (the open) of the first candle.

How to recognize it

• Candles 1 and 2 form a bearish harami
• Candle 3: bearish, closes below the open of candle 1
• Appears after a rise

The psychology

The market stalls, then sellers prove their control by wiping out the entire rise of candle 1.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Above the high of candle 1.

Target

2R.

A bullish engulfing confirmed by a third bullish candle closing at a new high.

How to recognize it

• Candles 1 and 2 form a bullish engulfing
• Candle 3: bullish, closes above the close of candle 2

The psychology

The reversal from the engulfing gets follow-through – buyers not only take control but also hold on to it.

How to trade it

Entry

At the close of candle 3 or on a retest.

Stop-loss

Below the pattern's low.

Target

2–3R.

A bearish engulfing confirmed by a third bearish candle closing at a new low.

How to recognize it

• Candles 1 and 2 form a bearish engulfing
• Candle 3: bearish, closes below the close of candle 2

The psychology

Sellers take control and confirm it right away.

How to trade it

Entry

At the close of candle 3 or on a bounce.

Stop-loss

Above the pattern's high.

Target

2–3R.

Three consecutive dojis, with the middle one below the other two. An extremely rare pattern of total exhaustion.

How to recognize it

• Appears after a prolonged decline
• Three dojis
• The middle doji gaps below the first and the third

The psychology

For three periods in a row the market can't make up its mind, and the middle doji marks the bottom. Sellers are completely spent.

How to trade it

Entry

Above the high of the third doji.

Stop-loss

Below the low of the middle doji.

Target

2R.

Three dojis, with the middle one above the other two. The mirror image of the bullish tri-star.

How to recognize it

• Appears after a prolonged rise
• Three dojis
• The middle one gaps above the first and the third

The psychology

Buyers run out of strength at the top – three periods of indecision, then down.

How to trade it

Entry

Below the low of the third doji.

Stop-loss

Above the high of the middle doji.

Target

2R.

Japanese name: sakizumari

Three bullish candles similar to the three soldiers, but their bodies shrink and the upper wicks get longer. The advance is losing strength.

How to recognize it

• Uptrend
• Three bullish candles with new highs
• Each body is smaller than the one before
• The upper wicks get longer (especially on the 2nd and 3rd)

The psychology

Buyers are still lifting price, but each new effort achieves less, and sellers reject the highs more and more strongly. Exhaustion.

How to trade it

Entry

Below the low of the third candle, after a bearish confirmation candle.

Stop-loss

Above the pattern's high.

Target

The start of the pattern or 2R.

Japanese name: shian boshi

Two long bullish candles followed by a small candle (often a spinning top or a star) near the close of the second. The advance stalls.

How to recognize it

• Uptrend
• Candles 1 and 2: long bullish
• Candle 3: small body, opens at or near the close of candle 2

The psychology

Buyers suddenly stop pushing – the market is “deliberating”. Time for caution.

How to trade it

Entry

Below the low of candle 3 after confirmation.

Stop-loss

Above the pattern's high.

Target

2R.

A long bullish candle, a small bearish candle with a gap up, and a second bearish candle that engulfs it but closes above the close of the first candle (the gap stays open).

How to recognize it

• Uptrend
• Candle 1: long bullish
• Candle 2: small bearish, with a gap up
• Candle 3: bearish, engulfs candle 2, closes above the close of candle 1

The psychology

Two “crows” land above the market. Despite the gap up, buyers can't hold the high prices – price closes lower twice in a row.

How to trade it

Entry

Below the close of candle 1 (as the gap fills).

Stop-loss

Above the pattern's high.

Target

2R.

Like the previous pattern, but the third candle closes deep inside the body of the first – the gap is filled.

How to recognize it

• Uptrend
• Candle 1: long bullish
• Candle 2: small bearish, with a gap up
• Candle 3: bearish, opens within the body of candle 2 and closes within the body of candle 1

The psychology

The gap up is wiped out and buyers lose all momentum. The reversal is clearer.

How to trade it

Entry

At the close of candle 3.

Stop-loss

Above the high of candle 2.

Target

2R.

A long bearish candle, a bearish harami with a very long lower wick (a new low) and a small bullish candle below the close of the second.

How to recognize it

• Downtrend
• Candle 1: long bearish
• Candle 2: small bearish body inside candle 1, but with a new low (long lower wick)
• Candle 3: small bullish, closes below the close of candle 2

The psychology

Sellers make one last attempt at a new low, but it is rejected (the lower wick), and the market stabilizes.

How to trade it

Entry

Above the high of candle 2 after confirmation.

Stop-loss

Below the low of candle 2.

Target

2R.

Two bearish candles with equal closes and a bullish candle between them. The equal closes form support.

How to recognize it

• Downtrend
• Candle 1: bearish
• Candle 2: bullish, trades above the close of candle 1
• Candle 3: bearish, closes at the level of candle 1's close

The psychology

Sellers close at exactly the same level twice and fail to break it – support forms.

How to trade it

Entry

Above the high of candle 3 after confirmation.

Stop-loss

Below the lows.

Target

2R.