forexlessons.org XTrade promo

Main bullish formations

Table of Contents

Following we will describe and show in visual all the main bullish formations. It is important to use and remember these as they are significant and important part of the technical analysis and overall unreplaceable part of the forex traders tools.
We hope you can find the information enough as details, and if you got something to add, you are free to contact us.

Piercing Line

Piercing Line is turning trend formation. Candlestick with large black body is followed by gap and as big but white body on the second day, which has price of closing upper the middle of the first day.

Criteria of identification:

bullish Piercing LineThe market is in ascending trend. On the first day we have black candlestick. Next is price of opening with gap on direction of the ascending trend. Everything is just like the bears want it. But the direction is changing and the price of closing on the second day is much higher than this on the previous day. Already we feel that the bears are loosing their power and the expectations are for turning the trend. Potential buyers start to believe that new lowest level wont be reached and may be is a time to buy long positions.

Important factors:

In Bullish Piercing formation as higher in the body of the black candlestick is the price of closing on the first day, as sure is the eventually turning the trend. The perfect situation is, when the price of closing is higher than the middle of the black body. A confirmation for turning the trend with white candlestick, gap in ascending direction, or reaching new highest price is recommended. Equivalent of this candlestick – formation is Piercing Line graphic:

Kicking formation

The Kicking formation is a combination from white Marubozu followed by black Marubozu. After the black Marubozu the market opens with big gap, which has price of opening higher than the price of opening from previous day. To the end of the session a white Marubozu is formed.

bullish Kicking formationCriteria of identification:

Bullish Kicking formation is very clear signal, for that the market will continue in ascending trend. For difference from the other formations, here is not important which the direction of the previous trend is. The price of opening on the second day is with gap and by the end of the day it reaches to new highest level which is the same with the price of closing.

Important factors:

We must be careful when we find this combination, to be sure that the both candlesticks don’t have down or upper shades (both must be Marubozu). Bullish Kicking formation is similar with Bullish Separating Lines with this difference, here we have gap, and in the other formation the prices of opening on the both days are the same. Although the Kicking formation is with high level of confidence, a confirmation with white candlestick, gap in ascending direction, or reached new higher price, is necessary. Equivalent of this candlestick – formation is Kicking Formation graphic:

Abandoned baby

Abandoned Baby is a very rare formation. It is composite from a Doji Star, which is divided, with a gap, from the first and the third day.

bullish Abandoned babyCriteria of identification:

On descending trend we have big black candlestick, and the second day opens with a gap. On the end of the day the price of closing is the same like this on opening. This shows that the positions which the player has taken on the market have changed. The finally signal for turning the trend is given by the ascending gap which opens from the third day and the white candlestick, formed by the end of this session.

Important factors:

The formation Bullish Abandoned Baby is very rare. Although it is with high confidence, a confirmation on the next day with white candlestick, gap in ascending direction, or reaching new higher price is recommended. Equivalent of this candlestick – formation is In Neck Bearish graphic:

Morning Doji Star

This is a formation composed by three candlesticks, which gives us a signal for turning of the descending trend. Candlestick with big black body is followed by doji, which opens with a gap forming doji star. At the end we have candlestick with big white body, which has price of closing in the body from the first day.

bullish Morning Doji StarCriteria of identification:

A candlestick with big black body on the first day, proves that the bears still has the control of the market. On the second day a doji is formed, which shows the shortage of sellers to continue control of the descending trend. A confirmation for turning the trend is the third day which is white candlestick with big body. The perfect situation for Bullish Morning Doji Star formation we have when a gap is happened before and after the middle Doji. The second gap is rarer but it raises the confidence for turning the trend.

Important factors:

The formed Doji may not be only one.
This formation is with very big level of confidence, but it is recommended a confirmation on the next day, with white candlestick, gap in ascending direction or new highest price reaching. Equivalent of this candlestick – formation is Morning Doji Star graphic:

Morning Star

This is a formation formed from three candlesticks, which gives a signal for turning the descending trend. Candlestick with small body (the color doesn’t matter) which opens with a gap, forming a star. At the end we have candlestick with big white body, which has price of closing in the body from the first day. The third day is the confirmation for turning the trend.

bullish Morning StarCriteria of identification:

Candlestick with big black body on the first day shows that the bears still have the control on the market. On the second day, a candlestick with small body is formed, which shows the shortage of enough sellers, to continue the control of descending trend. A confirmation, that the bulls will take the initiative and probably turning the trend is the third day, which is a white candlestick with big body. The perfect variant for Bullish Morning Star formation we have when there is a gap before and after the middle candlestick. The second gap is rarer but it increases the confidence for turning the trend.

Important factors:

The formed star, which color doesn’t matter, may not be the only one. This formation is with very high level of confidence, but it is recommended a confirmation on the next day with white candlestick, gap in ascending direction, or reaching new top price. Equivalent of this candlestick – formation is Morning Star graphic:

Three Inside Up

Three Inside Up formation is just another name to confirm Bullish Harami formation. The third day is confirmation for turning the trend.

bullish Three Inside UpCriteria of identification:

The first two days from this formation are the same like Bullish Harami, and the third day is confirmation for turning the trend, we have white candlestick which reaches new level.

Important factors:

This formation is with very high level of confidence, but it is recommended a confirmation on the next day with white candlestick, gap in ascending direction or reaching a new highest price. Equivalent of this candlestick – formation is Three Inside Up graphic:

Three Outside Up

Three Outside Up is just the other name of confirmation of Bullish Engulfing formation. The third day is a confirmation for turning the trend in ascending.

bullish Three Outside UpCriteria of identification:

The first two days from this formation are Bullish Engulfing, and the third is a confirmation for turning the direction of the trend, we have white candlestick which reaches new highest level for the last three days.

Important factors:

This formation is with very high level of confidence but it is recommended a confirmation on the next day with white candlestick, gap in ascending direction or reaching new highest level. Equivalent of this candlestick – formation is Three Outside Up graphic:

Three White Soldiers

Three White Soldiers formation shows surly turning the trend. It is characterized with three candlesticks with big white bodies, with prices of opening close to the prices of closing from the previous day.

bullish Three White SoldiersCriteria of identification:

Bullish Three White Soldiers formation is formed, when market is such a long time in lowest levels. After price reaches a potential bottom, we sat long white candlestick from the first day, followed by another two similar by size, which reaches new highest levels. This induces bears to close their short positions and the control already is taken by bulls.

Important factors:

The prices of opening on the second and the third day must be in the range of the bodies from previous candlestick. It is best if the price of opening is in the range higher than the middle of the body from previous day.
This formation is with very high level of confidence but it is recommended a confirmation on the next day with white candlestick, gap in ascending direction or reaching new highest price. Equivalent of this candlestick – formation is Three White Soldiers graphic:

Concealing Baby

We have two black Marubozu. On the third day again a candlestick with black body which reaches new lowest level is formed. Next is black Marubozu which is a signal for these who are on short positions for eventually turning the descending trend.

bullish Concealing BabyCriteria of identification:

Two black Marubozu show continuing the descending trend. On the third day we saw a gap which also confirms the trend direction. But price starts to move upper the range of closing from the second day. Next day opens with big gap but to the end of the day the price of closing again is lower than the previous. This fourth day is a good possibility for bears to close all short positions and we expect eventually turning the trend.

Important factors:

This formation is with very high level of confidence but it is recommended to confirm on the next day with white candlestick, gap in ascending direction or reaching new top price. Equivalent of this candlestick – formation is Concealing Baby graphic:

Dragonfly Doji Line

Dragonfly Doji formation is one candlestick, which is formed by reaching the bottom of the descending trend. This formation is close to Hammer, but there we have a body. In Dragonfly Doji prices of opening, closing and the top reached of the day are the same.

bullish Dragonfly Doji LineCriteria of identification:

We have market, which is in descending trend. The price fast reaches to the lowest levels, but at the end of the session it is the same like the top for the day. Unsuccessful try of the descending trend to close on new lowest levels means its turning. If the price of opening on the next day is higher than the previous bears surely would think of closing a part of short positions.

Important factors:

Bullish Dragonfly Doji formation is stronger than Bullish Hammer. Its confidence is also stronger, but a confirmation for turning the trend with white candlestick, big ascending gap or next price of closing higher than the previous. Equivalent of this candlestick – formation is Dragonfly Doji Line graphic:

Bullish Engulfing

Engulfing formation is characterized with candlestick with big white body, which swallows totally the previous black candlestick formed in descending trend. The white body from the second day is not necessary to swallow the shades from the first day.

bullish engulfing candleCriteria of identification:

While we have bearish moods, we saw increasing of mistrust to continuing of descending trend. On the next day bulls take the initiative and the price of closing is higher than the price from the first day. This means only one thing – descending trend have lost its power and will turn.
Important factors:
The size of these two bodies from the first and the second day is very important factor. If the first day is with very small body (or even may be a doji), and the second day is with very big white body, this is a very good indicator that the bears have lost the control and the trend will turn. Equivalent of this candlestick – formation is Bullish Engulfing graphic:

Long – Legged Doji Line

Long Legged Doji formation is a doji characterized with very long shades. It shows unsure between buyers and sellers. One of the most important signals for trend turning.

bullish Long Legged Doji LineCriteria of identification:

Long Legged Doji formation shows that there is unsure from the traders, which after all close the session with price of closing same as price of opening. This is interpreted like the market has lost orientation for its direction.

Important factors:

Long Legged Doji formation is very strong when is forming on the top of ascending trend.
This is a formation formed only by one candlestick, confirmation with moving on the opposite direction as the direction of previous trend, is absolutely necessary. Equivalent of this candlestick – formation is Long Legged Doji Line graphic:

Gravestone Doji Line

Gravestone Doji is specified Doji which has prices of opening and closing, similar as lowest price reached for the day. The formation Gravestone Doji is turning trend formation, which is close to Inverted Hammer with the difference that here isn’t formed body.

bullish Gravestone Doji LineCriteria of identification:

The market opens under the price of closing from previous day. Next there is a try to reach this price but on the end of the session prices of closing and opening are the same as the highest for the day. This is not already a clear sign for turning and we must wait until the next day. If the price of opening on the next session is higher than the highest reaches from Gravestone Doji, this means that these which were with short positions from the previous day start to lose. As long the market keeps the price higher than Gravestone Doji, as much short positions are closed.

Important factors:

Gravestone Doji needs a confirmation on the next day, with white candlestick, large ascending gap or next price of closing higher than the previous. Equivalent of this candlestick – formation is Gravestone Doji Line graphic:

Doji Star

Doji star formation is a doji, which is separated with a gap from long black candlestick, by time of descending trend.

bullish Doji StarCriteria of identification:

Usually when we have star, following long black candlestick in descending trend, this is a sign for turning of the polarities of the market. After this star, already we have right conditions for moving of the market in the bull’s camp. The power of descending trend is lost and a turning is next.

Important factors:

A confirmation is recommended on the third day with white candlestick, big ascending gap or next price of closing higher than the previous, to be sure that the trend really has turned. Equivalent of this candlestick – formation is Doji Star graphic.

Harami Cross

The Harami Cross formation is a candlestick with big black body, followed by doji. This is a main bullish turning trend formation. It is stronger than Harami.

bullish Harami CrossCriteria of identification:

Bullish Harami Cross formation is very strong and clear signal for weak descending trend. On the first day we have big black candlestick, which is followed by Doji. This shows that we could expect eventually turning of the trend.

Important factors:

Bullish Harami is weaker than Bullish Harami Cross, which is a main turning formation. Very often Harami shows exactly the bottom reached by the market. Confirmation on the third day is recommended, but it is not necessary. It may be with white candlestick, big ascending gap or follow price of closing higher than previous one, to be sure that the trend really has turned. Equivalent of this candlestick – formation is Harami Cross graphic.

Homing Pigeon

The formation Homing Pigeon is small black body, which is swallowed by previous large black body candlestick.

bullish Homing PigeonCriteria of identification:

The Bullish Homing Pigeon formation is a signal for weak power of the descending trend. On the first day we have large black candlestick, which is followed by black candlestick with small body. This shows that we may expect eventually turning of the trend.

Important factors:

Important requirement for this formation is on the second day to have small body of formed black candlestick, and it must be totally swallowed from the first day body. Usually after this formation the market comes to canal trade.
A confirmation on the third day is necessary. It may be with white candlestick, big ascending gap or next price of closing higher than the previous, to be sure that the trend really turned. Equivalent of this candlestick – formation is Homing Pigeon graphic.

Matching Low

The Matching Low formation is happening when two black candlesticks have the same price of closing in descending trend. Expectations are for turning the trend on the third day.

bullish Matching LowCriteria of identification:

The market is in descending trend, and for proof of that is formed long black candlestick on the first day. On the next day the price of opening is higher but to the end of the day, again closes on the same level as on the first day. This formation clearly shows the level of support around the price of closing, and if bears ignore this fact, mat be too late when they decide to close their positions.

Important factors:
A confirmation on the third day is necessary. It may be as white candlestick, big ascending gap or next price of closing higher than previous, to be sure that the trend really have turned. Equivalent of this candlestick – formation is Matching Low graphic.

Meeting Lines (counterattack)

Sometimes we see how the market opens with large gap on descending trend direction and on the end of the session, price of closing is very close to the price of closing on the previous day. This formation is Meeting Lines.

bullish Meeting LinesCriteria of identification:

The first candlestick on time of descending trend is long black. Although the next day opens on hardly lower level, bears feel very comfortable, until the end of the session the price of closing reaches the price of closing from the previous day. This brings uncertainty about continuing of the trend.

Important factors:
The Bullish Meeting Lines is comparable with Bullish Piercing Line, which has nearly the same by size, two candlesticks. The difference is that, on the first, bulls do not continue the attack until reaching to the body of the first session. Piercing Line is stronger signal for turning the trend. A confirmation on the third day is necessary. It may be with white candlestick, large ascending gap or next price of closing higher than the previous, to be sure that the trend has turned. Equivalent of this candlestick – formation is Meeting Lines (counterattack) graphic.

Stick Sandwich

The Stick Sandwich formation is characterized with three candlesticks, which have higher prices of opening than the prices of closing from previous day, but finally the last day closes near to the price of closing from the first day. This may be interpreted as the price has found new level of support, which eventually may mean turning of the trend.

bullish Stick SandwichCriteria of identification:

In Bullish Stick Sandwich formation we have descending trend. On the second day the market opens hardly upper the price of closing from the first day and until the end of the session reaches new higher level. Next is again price of opening on higher level, but bears again take the control and the price of closing from third day is close to that from two days before. This formation shows us, that the market has found new level of support, near to the price of closing from the first and the third day and it is possible trend to turn.

Important factors:
A confirmation on the fourth day is necessary. It may be with white candlestick, large ascending gap or next price of closing higher than the previous one, to be sure, that the trend really has turned.

Equivalent of this candlestick – formation is:
Stick Sandwich graphic

Three Southern Stars

There are three black candlesticks, with smaller bodies by time of descending trend. They shows that every day bears are loosing their power and may come sellers. The possibility for turning the trend soon is increased.

bullish Three Southern StarsCriteria of identification:

This formation which is formed in descending trend shows us how day after day the range of trade is decreasing and the lowest price is increasing. After reaching the lowest level on the first day, next is little correction and now lowest price on the second day is higher than the previous, on the third day we have black Marubozu, which is in the range of trade from the second day. Already is sure that bears are ready to close the second part from their short positions if following new higher price of closing.

Important factors:

A confirmation on the fourth day is necessary. It may be white candlestick, large ascending gap or next price of closing higher than the previous one, to be sure that the trend really has turned. Equivalent of this candlestick – formation is Three Southern Stars graphic:

Tri Star Bottom

The Tri Star formation is very rare, but it is clear signal for turning the trend. It is formed with three doji, and the middle is Doji Star.

bullish Tri Star BottomCriteria of identification:

In case with Bullish Tri Star formation, we have market which is long time in descending trend. The first Doji shows uncertainty of continuing the trend. The second Doji clear indicate that the market has lost its direction. At last the third Doji warns that the trend has turned.

Important factors:

A confirmation on the fourth day is necessary. It may be white candlestick, large ascending gap or next price of closing higher than the previous, to be sure that the trend really has turned. Equivalent of this candlestick – formation is Tri Star Bottom graphic.

BreakAway

We have descending trend. But also we see that price is forming bottom, and by result on the fifth day we have candlestick with larger body, which don’t swallows the gap, opened between first and second day. But expectations are for turning of the trend.

bullish BreakAwayCriteria of identification:

The formation Bullish Breakaway is happening in descending trend and shows that the sells are increasing by the point when the market is oversold. Start with big black candlestick, which leaves gap after it, by trend direction. Next are three days, which are reaching lower levels from previous. All candlesticks in this formation are black except the third day, which may be white. Three days after opened gap are close to Three Black Crows formation. It seems that descending trend is confirmed after this gap and these three lowest levels reached. But they also show decreasing of the power of bears. At last is formed large white candlestick in opposite direction, which swallows three previous days, but don’t closes totally opened gap, which shows that turning is not sure yet.

Important factors:

A confirmation is necessary on the sixth day with white candlestick, large gap in ascending direction or price of closing higher than the previous day. Equivalent of this candlestick – formation is BreakAway graphic.

Ladder Bottom Bullish

In this formation, all with opened short positions have the chance to close them on the fourth day. The fifth day opens with a gap and forms large white body, which shows turning the descending trend.

bullish Ladder BottomCriteria of identification:

We have strong descending trend. On the fourth day the price reaches levels higher than the price of opening, but until the end of this session again closes with new lowest level. This is a warning for everyone, which are taken the short positions that the descending trend may not continue much longer. On the next day, the price of opening is with a gap on opposite direction and until the end of the day, we have reached new highest level, which is promises turning of the trend.

Important factors:
A confirmation is necessary on the sixth day, with white candlestick, large gap in ascending direction or price of closing higher than this on the fifth day. Equivalent of this candlestick – formation is Ladder Bottom Bullish graphic.

Belt Hold

The Belt Hold formation is with one candlestick, which is White Opening Marubozu and it is forming on time of descending trend. As large is the white body, as possible is turning of the trend.

bullish Belt HoldCriteria of identification:

The market opens with large gap on direction of previous descending trend. At first we may think that this trend will continue its direction, but then bulls took the control and until the end of the day the price of closing is near to the highest level reached on this session. Maybe this is a signal for turning of the trend

Important factors:
Turning of the trend in Bullish Belt Hold formation, demands a confirmation on next day with white candlestick, large gap in ascending direction or price of closing higher than this of the previous day. Equivalent of this candlestick – formation is Belt Hold graphic.

Hammer

The Hammer formation is formed by one candlestick, and it is near to Dragonfly Doji, but the price of opening and closing are not the same here.

bullish HammerCriteria of identification:

We have descending trend, which is confirmed with reaching by time of the session to new lowest level. But bit by bit Bulls are taking the control and until the end of the day the price of closing is near to the price of opening. From that we may think of turning of the descending trend.

Important factors:

If this hammer is with white body, this is a stronger signal for turning of the trend. The Bullish Dragonfly Doji is defined as stronger than Bullish Hammer. The confidence of Bullish Hammer is low. This demands a confirmation on the next day with white candlestick, large gap on ascending direction, or price of closing higher than this on the previous day. Equivalent of this candlestick – formation is Hammer graphic.

Inverted Hammer

The Inverted Hammer formation is formed by two candlesticks, and the first day is with large black body, and the second day we have inverted in 180 degrees hammer. This formation is similar to Shooting Star in ascending trend and it is a potential signal for turning it.

bullish Inverted HammerCriteria of identification:

The formation Bullish Inverted Hammer must be in descending trend direction. On the day of forming, the price of opening is near to the lowest. Next is a change of direction but bulls cant stand the control until the end of the session and on the end the price of closing is near to the price of opening. This is not still a clear sign for turning of the trend, so we must wait the reaction on the next day. If then the price of opening is higher than the body of this inverted hammer, these who are opened short positions previous day, already start to loose. As long is that perspective continuing, as possible is short positions to be closed. This is a premise for turning of descending trend.

Important factors:
The confidence of Bullish Inverted Hammer is low. This demands confirmation on the next day with white candlestick, large gap in ascending direction or price of closing larger than this on the previous day. Equivalent of this candlestick – formation is Inverted Hammer graphic.

Harami

The formation Harami is characterized with small body on the second day, which is swallowed from the previous large black body. “Harami” is old Japanese word for “pregnant”. The black candlestick from the first day is the “mother”, and the small candlestick from the second day is the “baby”.

bullish HaramiCriteria of identification:

The Bullish Harami formation is a signal for uncertainty on continuing of trend direction. The first day we have serious confirmation for that the control is in bears. On the second day is formed a white candlestick with small body, which shows that bulls are ready to turn the trend direction.

Important factors:
The Bullish Harami formation doesn’t shows surely turning of the trend. It is more possible a continuing of the trade canal.
A confidence of Bullish Harami is low. That hardly demands a confirmation on the next day with white candlestick with large gap on ascending direction or price of closing larger than this from the previous day. Equivalent of this candlestick – formation is: Harami graphic