Price Action
Cornerstone concept of 6. The language of individual candles and short multi-bar formations.
What it is
Price action is the study of what individual candles tell you in context. A doji at the top of a range means something different than the same doji in mid-trend. A bullish engulfing bar after three down days is more meaningful than one inside a chop range.
BlitzPulse detects 18 single + multi-bar patterns plus Wyckoff events (spring, upthrust, test, sign of strength/weakness) and multi-bar reversals (double tops, head & shoulders, wedges).
What it tells you
Each pattern carries an empirical hit rate per symbol. We do not claim "engulfing bars are reliable"; we tell you what AAPL's engulfing bars have done historically and let you decide.
Categories detected:
- Single-bar: doji, marubozu, pin bar, hammer, hanging man.
- Two-bar: engulfing, harami, inside, outside, piercing line, dark cloud cover, tweezer top/bottom.
- Three-bar: morning star, evening star, three white soldiers, three black crows.
- Five-bar: rising / falling three methods.
Visual example
A bullish engulfing bar at the bottom of a structural retracement to a Higher Low with an FVG nearby is a high-quality setup; the same engulfing bar in mid-trend chop is filler.
That's why BlitzPulse runs candle patterns alongside market structure and Smart Money — context determines value.
How to use it
- Confluence rule: a pattern alone is one data point. The
confluence ladder (
/trading-intel/intraday/confluence-ladder) ranks patterns by 2-of-3 / 3-of-3 layer agreement. - Sample size matters: a pattern with 80% hit rate on 5 samples is luck. Demand ≥30 samples before treating a stat as evidence.
- Direction: not every pattern has direction — doji is neutral, inside bar is neutral, marubozu is directional.
When NOT to trust it
- Patterns marked experimental (hit rate < 55%) — the historical edge is weak. Treat as a data point, not as evidence.
- Patterns on illiquid symbols — the pattern may form but the move doesn't materialize because nobody trades the stock.
- During earnings, FOMC, or major news — pattern signal-to-noise collapses around catalysts.
Related concepts
(Full library of ~60 pattern-specific cards rolls out over 30 days.)