Investor’s Library: Fundamental Analysis, Technical Analysis, and Income Investing (Collection)

Chapter 4 Complex Stick Patterns

Any pattern of three or more candlesticks appearing without breaks is a complex pattern. Three-stick patterns are stronger indicators than two-stick moves, as you might expect. Another point worth remembering is that a complex pattern is not limited to only three consecutive sticks. A pattern can easily become a trend when it moves beyond three sticks. Complex patterns can be divided into two broad categories. Reversal patterns appear at or near the end of the current trend and anticipate a change in the opposite direction. Directional patterns are indicators pointing to a new trend as it develops or as continuation of an existing trend.

Complex Patterns

Candlestick formations consisting of three or more consecutive ...