Homing Pigeon candlestick pattern

The Homing Pigeon is a 2-candlestick pattern. The pattern is considered a bullish reversal pattern, suggesting a potential change in the direction of the trend. It indicates that despite a strong bearish sentiment initially, the bulls are starting to gain control.

The first candlestick indicates strong selling pressure in the market, while the second, smaller candlestick indicates that this selling pressure is weakening.

The pattern is similar to the Harami pattern, the difference is in the second candle: the Homing Pigeon has a red candle, while the Bullish Harami - a green one. Both appear at the end of a downtrend and represent a bullish reversal.

Construction

1st

• candle in downtrend
• long red body

2nd

• red body shorter that body of 1st candlestick
• candlestick body is engulfed (covered) by 1st candlestick body^①

The length and presence of shadows play no role in this pattern.

Traders may begin to think about the possibility of closing short positions and opening long positions. But first, the pattern needs to be confirmed. The closing of the green candlestick following the pattern above its maximum can serve as confirmation.

A stop loss order is usually placed below the price of the pattern bottom after pattern formation (not a trading advice).