How to Identify & Trade Bullish Homing Pigeon Patterns

Bullish homing pigeon patterns are a bullish pattern. They are a two candlestick reversal pattern that forms near support levels. They look like bullish harami’s but are a bit different. The first candle is a big bearish candle. The second smaller bearish candle fits inside the first bearish candle, thus looking like a bullish harami. Look for price to break above second candle and hold to confirm bullish reversal. Watch our video on how to identify and trade bullish homing pigeon patterns.

What Is a Bullish Homing Pigeon Pattern & How to Identify These Patterns?

A bullish homing pigeon pattern consists of two candlesticks that form near support levels where the 2nd candle fits inside the larger 1st bearish candle. Typically, when the 2nd smaller candle fits inside the first, price causes a bullish reversal.

These patterns are two day candlestick chart patterns. This pattern signifies the end of a bearish trend along with a bullish reversal. Watch our video above to learn how to trade them. They form at or near the end of a downtrend. They’re formed by bearish candlesticks but have a bullish meaning. Japanese candlesticks candlestick patterns are very popular among traders. These patterns were invented by a 17th century rice trader by the name of Homma.

Homma realized that emotions affect the way traders were trading commodities even back then. He developed a system to be able to track emotions. As traders today, we still use his system. It allows us to gauge the pulse of the markets.

Traders from all over the world can see how other traders are feeling because of candlesticks. Candlesticks by themselves tell a story. Then group together to form patterns when trading stocks.

Bullish Homing Pigeon Patterns

Basics of Bullish Homing Pigeon Patterns

Bullish homing pigeon patterns are made up of 2 candlesticks. The first one is a long bearish candle. The second candle is a smaller bearish candle. The second candle is engulfed by the first candle.

It’s a signal that sellers are losing interest. The momentum of the bearish trend is slowed by the bullish homing pigeon.

Charts are made up of the tug of war between buyers (bulls) and sellers (bears). This tug of war makes up candles and patterns. This pattern is another example of that fight.

The day following the formation of the bullish homing pigeon candle is pretty important. This confirms the reversal. If the day after is made up of a bullish candlestick, traders take it as confirmation of a trend reversal.Some traders even take gap up patterns the next day as confirmation even if the trading session wasn’t particularly bullish (bookmark our penny stocks list and stock watch lists pages, which are updated daily).

Technicals of Bullish Homing Pigeon Patterns

Bullish homing pigeon patterns are small 2 day candlestick patterns that signify a reversal. It’s important to remember that they form inside much larger patterns such as symmetrical triangle patterns. This is a pattern that is a continuation pattern whether bullish or bearish (receive our stock picks free).

If it’s a bearish continuation pattern and the bullish homing pigeon candles form near the apex, if can break down instead of reversing. Hence the importance of seeing large patterns as well as small ones.

Patterns break down all the time. Just because a 2 day reversal pattern forms, doesn’t mean it’s going to do  just that. If you can only see the small patterns and not the large ones, you’re in for a world of hurt.

We teach how to trade candlesticks in our trading rooms. Check out our trading service to learn more.

Confirmation

Technical analysis is another tool you can use to confirm this pattern. Candlesticks are the first line of defense in technical analysis because they form key areas of support and resistance.

If you’ve been trading for any amount of time, you know how important support and resistance is. They are levels traders pay attention to. You can find it from the real bodies and wicks of candlesticks as well as moving average lines.

Moving average lines are pretty important. They provide support and resistance along with buy and sell signals and equilibrium. If price gravitates away from moving average lines it’s always going to come back to it.

It’s important to look at those indicators when you’re looking to place a trade. Take our candlestick reversal patterns course.

How to Trade Bullish Homing Pigeon Patterns

  • How to trade bullish homing pigeon patterns:
  • Watch for 1st falling bearish candlestick to form
  • Next, watch for 2nd smaller candlestick to fit inside 1st candle
  • Then, watch for 3rd candlestick to break above 2nd
  • Traders take a long position once price breaks above the 2nd candlestick
  • Place stop below the base of the 2nd candle
  • Some traders take a short position once price falls below 2nd candle
  • Then place stop above the 2nd candle

Summary

bullish homing pigeon patterns

Bullish homing pigeon patterns are reversal patterns. As with any reversal pattern you want confirmation of the pattern before making a trade. Just because it’s supposed to make a bullish reversal doesn’t mean it will.

Following the price action closely is going to help you make the best decisions while trading. 

Look at the larger patterns as well as technical indicators. The more information you have the better informed you’ll be. These patterns, candlesticks and indicators aren’t crystal balls though.

You can still place a losing trade even with all the tools. Even the best traders fail 30-40% of the time. If it were easy everyone would be doing it. Take our free online courses.

Leave a Reply

Your email address will not be published.