--- title: 'Candlestick Manual Part 2 | And There Will Be Part 3!' source: 'https://youtube.com/watch?v=-_F7wpyYw_U' video_id: '-_F7wpyYw_U' date: 2026-07-23 duration_sec: 884 channel: 'André Moraes' --- # Candlestick Manual Part 2 | And There Will Be Part 3! > Source: [Candlestick Manual Part 2 | And There Will Be Part 3!](https://youtube.com/watch?v=-_F7wpyYw_U) ## Summary This video is the second part of a series on candlestick patterns, focusing on two-candle patterns: bullish and bearish pregnant woman (harami), and bullish and bearish engulfing. The presenter explains the psychology behind each pattern, how to identify them on charts, and provides trading strategies with entry, stop-loss, and target levels. ### Key Points - **Introduction to Two-Candle Patterns** [00:02] — The video covers four two-candle patterns: bullish pregnant woman, bearish pregnant woman, bullish engulfing, and bearish engulfing. A third video will cover three-candle patterns. - **Bullish Pregnant Woman Pattern** [01:09] — Appears after a prolonged downtrend. First candle is a long bearish candle; second candle has a small real body completely enveloped by the first candle's real body. Indicates selling pressure exhaustion and potential reversal upward. - **Trading Strategy for Bullish Pregnant Woman** [03:33] — Buy on breakout of the second candle's high, stop loss below the low, target at moving average or resistance. Pattern offers good risk-reward ratio. - **Example: Amazon Chart** [04:18] — Shows two bullish pregnant woman patterns on Amazon daily chart from Feb-Mar 2026. Price declined from R$58 to R$50, then pattern formed and price rallied to moving average. - **Bearish Pregnant Woman Pattern** [06:12] — Appears after a prolonged uptrend. First candle is a long bullish candle; second candle is a short bearish candle with real body inside the first. Indicates buyer exhaustion and potential reversal downward. - **Example: BBSE3 Chart** [07:41] — BBSE3 had a prolonged uptrend from R$30 to R$37. Bearish pregnant woman formed, leading to a sell signal with target at 72-period moving average. - **Bullish Engulfing Pattern** [09:05] — Appears after a downtrend. First candle is a small bearish candle; second candle is a large bullish candle that completely engulfs the first. Indicates strong reversal upward. - **Trading Strategy for Bullish Engulfing** [10:43] — Buy on breakout of the second candle's high, stop below low, target at moving averages or previous resistance. - **Example: ALOS3 Chart** [11:11] — ALOS3 had a correction after uptrend. Bullish engulfing formed after a 10% drop, leading to a buy signal with target at previous low. - **Bearish Engulfing Pattern** [12:12] — Appears after an uptrend. First candle is a small bullish candle; second candle is a large bearish candle that engulfs the first. Indicates strong reversal downward. - **Example: BBDC4 Chart** [13:36] — BBDC4 had a strong uptrend from R$10 to R$14.21. Bearish engulfing formed, leading to a sell signal with target at 72-period moving average. ### Conclusion The video effectively explains four key two-candle patterns with clear psychology and practical trading examples. Viewers should watch part one for single-candle patterns and await part three for three-candle patterns. ## Transcript here on this channel. We're going to do part two of candlestick patterns. people to put it up here, for those who haven't watched this first part, where I talk about patterns with just one candle, okay? Hey, I think watch the one in the card above first, okay? It will also be in the video description. Today I'm going to talk about two-candle patterns, specifically about four patterns. Well, bullish pregnant woman, bearish pregnant woman, bullish engulfing, and bearish engulfing—these are the two-candle patterns that I like the most and trade the most. We're going to have a third video that will talk about patterns with three or more candles, okay? Basically, three candles: evening star, morning star, piercing line, dark cloud, is, in short, woman, is, abandoned baby, high or low. But that's for a third video, okay? So let's start by talking about this fancy candlestick pattern that requires two candles to form, which we call the bullish pregnant woman, okay? Let's talk a little about the psychology of this candle, okay? Basically, a pregnant woman's high Basically, a pregnant woman's high will appear after a long downward trend. Remember what I told you guys in the first video, okay? Well, this pattern in the middle of a sideways movement, man, it doesn't make any sense for us to observe or worry about it, okay? This pattern is really relevant after a long movement. So, in the case of a pregnant woman who is high, the market keeps falling, falling, falling, falling, falling, falling, falling. And then we have a day of intense sales pressure, right? Then the sellers pull the market down sharply, causing it to close at that low point. What happens? It is expected that the downward trend will continue from here. And then in the next candle you don't have that. You have a second candle, usually with a small real body. This real body needs to be enveloped by the real body needs to be enveloped by the real body from the previous day, right? Here you can see that the selling force has disappeared, right? They no longer exist; there is no longer a the market down. So here you have a lack of interest from the selling force. And of course, when you have disinterest from the selling force, buyers pay attention and start to band together to change the trend. It is very likely that from the emergence of a pattern like this, we can achieve what? The breakout from the top and from there a market upward trend. Perfect. So this pattern is formed by two consecutive candles and should always appear after a longer downward trend. The first day or the first candle, right? Because this could be in a daily, weekly, monthly chart, and so on. But the first candle is a so on. But the first candle is a bearish candle, okay? And the second is a candle that has a very small real body or even a non-existent real body. The opening and closing prices of the second day should be enclosed by the opening and closing prices of the first day. Furthermore, the color of the second day, in this case, is a high-energy color, right? Because you have the closing price happening above the opening price, which has the same color as the slide background, it marks the beginning of a new trend or at least the correction interesting to note that this will happen in the following way, right? So, you have a prolonged downward trend. Then, suddenly, you have a second day where the actual body of that second day is completely enveloped by the actual body of the first. And from there, it's interesting for us to think about what? In a buy operation starting from the breakout of the second day's high, with a stop below the low and the target at the moving average, okay? support and resistance line along the way; this target could shift. What's good is that this candlestick pattern usually provides a good payoff. The risk-return ratio for this type of pattern is very positive. Let's take a look at the graph, shall we? How does that work, okay? So, uh, I've included here a very recent chart of Amazon, okay? We can see two patterns here, like the one we just explained, okay? Well, this happened between February and March of this year, 2026. We're recording here in June 2026, so it's been 3 or 4 months since that happened. Let's go. Uh, let me give you this example , right? So here you have a process of decline in the asset. The asset went from R$58 to R$50 in a very short time. You have a day of a sharp drop, and then here's a day where you notice a complete lack of interest from the salespeople in that point on, what did the market do? It broke the record, okay? From the second day onwards, it moved at least until that first moving average, where you have a point of resistance, right? In other words, one could imagine a buy operation on this breakout, with a stop below the bottom, a first target based on the risk level, and a second target in this moving average region here, okay? The same thing happened back here, right? So you had a rapid price drop here . Then you have an extremely negative day, a second day where the real body of that second day is completely enveloped by the real body of the first. And from the breakout of this high, you have the possibility to buy with a stop below the bottom and the target at the orange moving average, the 72- period moving average, okay? So it would be an operation like this one, okay? In other words, buy on the breakout of that high with a stop below the low, a partial exit halfway through, the low, a partial exit halfway through, and a final exit. Kima, this one or this one then, okay? It's the standard high-risk pregnancy pattern for women. And the opposite of that pattern is exactly the pregnant woman on sick leave, okay? In other words, it's the opposite of that pattern. You have the market here in a strong upward trend, it just keeps going up, it just keeps going up, it just keeps going up, until one day people start tearing the price apart, pushing it way up, okay? So what do we expect? Let's hear the next lessons, if things keep rising, but that's not what's happening here. You can see a complete lack of interest from buyers in pushing the price higher in this second candle. So it's very likely that from there the price will reverse and start to fall. So it's a consecutive candles and should always appear after a longer upward trend. The first day is a long bullish candle and the second day is a short bearish candle. The opening and closing prices of the second day should be enclosed by the opening and closing prices of the first day. And the color of the second day, right, which is a bearish color, because the closing price was lower than the opening price, represents the beginning of a new trend or even a major correction. Okay, let's look at some examples, shall we? Well, we have a similar pattern here, right? The market was going up, up, up, and then suddenly here, look, okay? The royal body enveloped by the the possibility of selling with a target, okay, based on the 72-period moving average , which is what I use here with the long-term moving average, okay? The stop above the peak. And we also have a recent example, not in Amazon, but in BBSE3, okay? So come here with me and watch what happens here. BBSE3 had been in a very prolonged upward trend, right? So it went down from 30 bucks to R$ 37, okay? It just kept going up, it just kept going up. And suddenly, right? What do we see after all this climbing? What do we see? The market went up and closed at its peak, right? The buyers were causing chaos, and then suddenly, on the next trading day—since this is a daily chart—you see a complete abandonment by the buyers, all to keep pushing the price up. And from there, what comes next? This pattern emerges, which is a pregnant woman on sick leave, giving us the possibility to consider a sale, okay? From the breakout of this low with a stop above the top, a partial exit midway and a target here near the 72-period moving average. In other words, this allowed us to execute a sell transaction on this asset. Let me enjoying the content here, don't forget to leave a like. If you're not subscribed to the channel, subscribe and click the bell icon to activate notifications, so time we have a video like this. Let's go. Next, I wanted to talk about a kenda pattern that I actually like more, which is exactly the engulfing pattern, okay? The engulfing, which has a strange name, okay? But it's an easy pattern to observe. He has the high one and the low one, okay? And when it happens, it indicates a very likely reversal of the ongoing trend. Let's talk about the bullish engulfing pattern first, okay? It consists of two consecutive candles and longer downward trend. So let's start here, okay? The market, this thing here in the middle, on the sides, doesn't represent anything, okay? It represents when the market keeps falling, falling, falling, falling, falling, and then suddenly, man, the market opens extremely pessimistic, okay? Well, with a downward gap, meaning it opens below the previous day's low, and then, man, the sellers abandon the deal and the buyers take over, causing the price to buyers take over, causing the price to close way up there, way down at the bottom of the barrel, as I like to say. So, the first day is a small bearish candle and the second day is a large bullish candle, okay? The opening and closing prices for the second day should match the opening and closing prices for the first day, okay? So, uh , opening, closing, opening, , opening, closing, opening, okay? And closing. Yeah, that candle, right? okay? And closing. Yeah, that candle, right? It must swallow, right? It's embracing the first day, and the color of the second day indicates the beginning of a new trend, right? So let's go, okay? What is the example here? For example, this here, okay? The market has been falling, dropping from 14 to 10 quickly in just a few candles. Then suddenly, you have a gap compared to the previous day's closing price, and the price is closing way up there. When this happens, you buy on the breakout of the high of that second candle with a stop below the bottom and the target at the moving averages. In this case, it took a few days for that point to be broken, okay? But it was getting closer to the average of 72. I also included a recent example here that happened with allogeneic chromosomes. So let's go to happened with allogeneic chromosomes. So let's go to them, okay? Three. Perfect. Take a look at this , right? Alos 3 has a prolonged upward trend, okay? But suddenly she goes through a correction, okay? Just look at the size of that correction in percentage terms, right? She left that point and then in 10 trading sessions it fell 10%, okay? And then you left a little candle here, right? The following day, a downward gap. So what happened? A surge that took the market way up, okay? In other words, from that point on, one can imagine the beginning of a new trend, in fact, a continuation of the final upward trend of the correction. What are you going to think about? Buy on the breakout of the high, stop below the low. And in this case, the first resistance is this first resistance is this previous low here, okay? In other words, you're going to take a partial profit and target this point here as an exit point for the trade. OK? as an exit point for the trade. OK? Legal. And the opposite of a bullish engulfing pattern is exactly a bearish engulfing pattern, right? So let's get to it, okay? It's a pattern with two candles, okay? It looks, of course, like a bullish engulfing pattern, only in reverse. This pattern, formed by two consecutive candles, should very strong upward movement. So, the market keeps going up, up, up, up, with buyers driving it upwards. And then suddenly you have what? The first candle, which is a small, bullish candle, and the second, larger candle, showing exhaustion of buying pressure. The buyer puts pressure on at the opening, the gap is upwards, but from then on the sellers take over and push the price down. The opening and closing prices for the second day should match the opening and closing prices for the first day. And this color from the second day, which in this case is a bearish color, right, with the background showing that the closing price was lower than the opening price, indicates the beginning of a new trend. Perfect. Let's go. How does that work? In practice, you have an asset here that only goes up, okay? Then suddenly the buyer drives the price way up, the next day it opens high again , but it falls all day, the second day involving the real value of the first. This is the bottom engulfing pattern. Here you consider a sell order on the breakout of the low, with a stop loss above the high and the of the low, with a stop loss above the high and the target at the moving average or the previous low, in the case of a sell order. Perfect. Just like we had in BBDC4, right? And then you'll be able to observe it at various times, right? But I'm going to pick a moment here when BBDC4 is trending strongly , okay? Where did it go from R$10 to R$ 14.21? That happened in just a few moments, in just a few candles, okay? We're talking few candles, okay? We're talking about a 40% increase in a blue-chip stock, which is a lot, okay? What happens? From here, you have the price opening with a gap relative to the closing price, encompassing the first candle and forming this pattern that we call a bearish engulfing pattern. The sale happens here, the target, the stop above the top, a first partial exit and the second exit near partial exit and the second exit near this 72-period moving average region . Okay, these are the candlestick patterns that we most often find candlestick patterns that we most often find on a two-candle chart, alright? I hope call now. I'll be back in a little while to watch the third video. It'll be online soon. We're going to explain patterns with three or more candles.