Candlestick Patterns: Bidirectional, Continuation & Gap
Engulfing, Harami, Marubozu, Kicking and more -- patterns that depend on trend context, confirm continuations, or involve gaps.
This article covers three groups of patterns: bidirectional reversal patterns that signal in either direction depending on the preceding trend, continuation patterns that confirm the existing trend is still intact, and gap patterns that involve price gaps between candles.
Bidirectional Reversal Patterns (14)
These patterns can signal either a bullish or bearish reversal. The direction depends on the trend that precedes the pattern. Simula outputs +100 for the bullish variant and -100 for the bearish variant, so you always know which direction was detected.
A small candle followed by a larger candle whose body completely engulfs the first candle's body. Bullish engulfing: small bearish candle followed by large bullish candle. Bearish engulfing: small bullish candle followed by large bearish candle. The second candle overwhelms the first, showing a decisive shift in control.
A large candle followed by a smaller candle whose body is contained entirely within the first candle's body. The opposite of Engulfing -- the second candle 'fits inside' the first. The shrinking range signals that the prior trend's momentum is fading.
A Harami where the second candle is a Doji. The Doji (open equals close) inside the first candle's body represents a stronger indecision signal than a standard Harami -- the market has gone from a strong directional candle to perfect equilibrium.
A large candle followed by a Doji that gaps away from it. In a downtrend, the Doji gaps below the bearish candle (bullish signal). In an uptrend, the Doji gaps above the bullish candle (bearish signal). The gap plus Doji combination signals exhaustion.
Two candles of opposite color that close at the same (or nearly the same) price. The second candle opens with a gap in the trend direction but then reverses to close at the prior candle's close level. The complete reversal within one candle is the 'counterattack.'
A Marubozu (no shadows) of one color followed by a Marubozu of the opposite color that gaps away. Bullish kicking: bearish Marubozu followed by a bullish Marubozu that gaps up. This is one of the strongest two-candle patterns because both candles show total commitment from one side.
Same as Kicking but the signal direction is determined by comparing the lengths of the two Marubozus rather than the gap direction. The longer Marubozu determines which side won.
A candle in the trend direction, followed by a Doji that gaps away, followed by a candle in the opposite direction that gaps back. The Doji is 'abandoned' -- its shadows do not overlap with either neighboring candle's shadows. A rare and considered-strong pattern.
A Harami pattern (large candle + small inside candle) followed by a third candle that confirms the reversal direction. Three Inside Up: bearish candle, bullish inside candle, bullish confirmation. Three Inside Down: the inverse. The third candle adds confirmation to the Harami signal.
An Engulfing pattern followed by a third candle that continues in the engulfing direction. Three Outside Up: small bearish, large bullish engulfing, bullish continuation. The third candle confirms that the engulfing candle was not a false signal.
Three consecutive Dojis where the middle one gaps away from the other two. Three consecutive candles of indecision -- with the middle one gapping -- signals a potential turning point. Extremely rare in practice.
A long candle in the trend direction, followed by a gap and three more candles that make limited progress, followed by a final candle that reverses and closes within the gap. The initial gap loses momentum over several candles, and the final candle breaks back toward the pre-gap level.
An inside bar (candle contained within the prior candle's range) followed by a false breakout in one direction, followed by a reversal in the opposite direction. The 'fake-out' traps traders who entered on the initial breakout.
A stricter version of the Hikkake where the inside bar has specific requirements about body position relative to the surrounding candles. The tighter criteria may reduce false signals compared to the standard Hikkake.
Continuation Patterns (9)
Continuation patterns confirm that the current trend is still intact. Where reversal patterns signal a potential change in direction, continuation patterns signal that the existing direction is likely to persist. They appear as brief pauses or consolidations within a trend.
A candle with no shadows at all -- the open is the low and the close is the high (bullish) or the open is the high and the close is the low (bearish). Total dominance by one side for the entire candle. Signals strong conviction in the current direction.
A candle with no shadow on the closing end. A bullish closing Marubozu has no upper shadow (the close is the high). A bearish closing Marubozu has no lower shadow (the close is the low). Buyers or sellers maintained control through the close.
A long candle that opens at its extreme (open = low for bullish, open = high for bearish) with a small or no shadow on the opening end. The open at the extreme means the trend direction was established from the very first tick of the candle.
A candle with a body that is significantly longer than average. The extended body shows strong directional commitment. In a bullish trend, a long bullish candle confirms buyer strength. In a bearish trend, a long bearish candle confirms seller strength.
Two candles of opposite color that open at the same price. In an uptrend: a bearish candle followed by a bullish candle opening at the same level. The second candle 'separates' from the counter-trend candle at the open, resuming the original direction.
Two candles in the trend direction with a gap between them, followed by a counter-trend candle that partially fills the gap but does not close it. The failed attempt to close the gap suggests the trend-direction gap will hold.
Three candles in the same direction (like Three White Soldiers or Three Black Crows) followed by a fourth candle that reverses and engulfs all three. Despite the dramatic fourth candle, this is classified as continuation -- the fourth candle is a brief pullback before the original trend resumes.
A long trend-direction candle, followed by three small counter-trend candles that stay within the first candle's range, followed by another long trend-direction candle. The three small candles are a brief consolidation -- a 'rest' within the trend before it resumes.
Similar to Rising Three Methods: a long bullish candle, a gap up, two or three small bearish candles that hold above the first candle's close, then a final bullish candle that continues upward. The 'mat' of small bearish candles holds the gains.
Bearish Continuation (3)
A bearish candle followed by a small bullish candle that closes at or just above the first candle's low. The bullish candle barely makes any progress -- it cannot push past the prior candle's lowest point, confirming bearish control.
A bearish candle followed by a small bullish candle that closes exactly at the first candle's low. Even weaker than In-Neck -- the bounce reaches only the prior low and no further, confirming the downtrend.
A bearish candle followed by a bullish candle that closes above the first candle's low but below the midpoint of the first candle's body. The bullish candle makes more progress than In-Neck or On-Neck but still fails to reach the midpoint -- not enough to signal a reversal.
Gap Patterns (2)
These patterns involve price gaps between candles. Gaps are more common in stocks (overnight gaps) and less common in 24-hour markets like forex and crypto.
A gap in the trend direction followed by two bullish candles of similar size that sit side by side above (or below) the gap. The two matching candles holding the gap level suggest the gap will be maintained and the trend will continue.
Two candles in the trend direction with a gap between them, followed by a candle of the opposite color that opens within the second candle and closes within the first, filling the gap. Despite filling the gap, this is a continuation signal -- the gap-filling candle is a brief correction.
Where to Go Next
Bullish Reversal Candlestick Patterns -- 15 patterns signaling potential uptrend reversals.
Bearish Reversal Candlestick Patterns -- 12 patterns signaling potential downtrend reversals.
Indecision Candlestick Patterns -- 6 patterns reflecting market uncertainty.
Candlestick Patterns Overview -- how Simula detects patterns and realistic expectations.