For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Cradle Patterns”.
– Normally it should be a signal of reversal of the current Trend.
– It occurs during a Downtrend; confirmation is required by the candles that follow the Pattern.
– The Pattern starts with a long and black Candle, during a downtrend (Due to the Traders that are selling because they are worried by the downtrend).
– Then there is a phase of indecision in the Prices (There are Doji Candles, Spinning Tops, Hammer, Inverted Hammer), so the Prices remain in a precarious balance.
– At the end of the Pattern, starts a rise in the Prices with a long and white Candle (That shows the strength of the rise).