Rare Candlestick Formations

What are Rare Candlestick Formations?

Rare candlestick formations are the long tail of the Japanese candlestick catalog: patterns like the advance block, deliberation, three stars in the south, unique three-river bottom, concealing baby swallow, stick sandwich, homing pigeon, counterattack lines, upside-gap two crows, and three-line strike. Each is defined by a strict sequence of body sizes, colors, gaps, and shadow relationships. Most are variations on familiar mechanics: the homing pigeon is a harami built from two bearish candles (the inside bar strips the same idea down to pure range), the advance block is a three-candle advance with shrinking bodies and lengthening upper shadows, and counterattack lines are opposite-colored candles meeting at the same close.

The catalog has a traceable lineage. Steve Nison introduced Japanese candlestick charting to Western traders with his 1991 book, and later encyclopedic references, notably Greg Morris's pattern catalog and Thomas Bulkowski's statistical encyclopedia of candlesticks, standardized the definitions and counted occurrences across large stock databases. Those counts confirmed what the definitions imply: several formations, the concealing baby swallow chief among them, print so seldom that decades of daily data yield only a handful of examples.

Their rarity is arithmetic. Every added condition (an exact gap, a matching close, a third or fourth qualifying candle) multiplies away candidates, and several formations require true opening gaps that almost never print in around-the-clock markets. That same rarity makes the statistics thin: samples are too small for dependable base rates, so the traditional bullish or bearish labels rest on the classical literature rather than on strong evidence.

Read as a group, the rare tail still teaches the grammar of the catalog, because nearly every exotic name encodes a familiar mechanic. Shrinking bodies inside an advance (advance block, deliberation) describe fading momentum, the same message a morning star's stalled middle candle delivers. Long lower shadows probing and failing beneath a decline (three stars in the south) echo the rejection logic of a hammer or pin bar, while the homing pigeon's shrinking second body tells the same stalling story as any harami. And multi-candle sequences such as the three-line strike compress a small trend plus its full retracement into one unit, kin to the two-bar reversal.

How to identify rare candlestick formations

Manual identification means checking strict conditions in order; most traders let a screener surface candidates, then verify by hand.

1. 1Establish the prior trend first: almost every formation in this group is defined relative to an existing advance or decline, and a textbook-perfect candle sequence without the required context does not qualify.
2. 2Check the specification candle by candle: body color and relative size, whether each open gaps beyond the prior body, and where each close lands. Near-misses are how most misidentifications happen.
3. 3Confirm the venue can even produce the pattern: formations requiring true opening gaps effectively exist only in markets that close between sessions, such as daily stock charts.
4. 4Run a full-catalog screener to surface candidates, then verify the flagged bars against the written definition rather than trusting the label.
5. 5Before acting, note the location relative to support, resistance, and trend stage, and wait for the confirmation candle the classical texts usually require, typically a close beyond the pattern's extreme.

How traders use it

• For screener completeness: full-catalog scanners flag every recognized formation so nothing slips past, leaving the context judgment to the trader.
• As taxonomy: mapping a rare pattern back to its common relative (a doji-based star, an engulfing variant) usually explains its intended logic better than memorizing the exotic name.
• With reduced weight: given tiny historical samples, these are best treated as context notes beside structure and volume, not standalone signals.
• As confirmation-dependent triggers: classical sources generally want the next candle to close beyond the formation's extreme, a filter that removes many prints that would otherwise fail immediately.
• As training material: working out why the advance block warns during an uptrend, or why the three-line strike is classically filed as continuation, builds pattern literacy faster than memorizing names.

Rare formations vs. the common canon