Find the formation

Candle twelve is the strong bullish move. Candle thirteen opens above where twelve closed, turns over, and closes below the middle of candle twelve's body. Measure against the middle of the body, not against the wick. The deeper the second body cuts past that middle, the more the warning is worth.

Now check what it is not, because that is the whole exercise. A bearish engulfing has to close below the opening of the candle in front of it. This one stops partway down. Close shape, different name, different weight: dark cloud cover is a two-candle warning from lesson two, not one of the six formations from lesson three.

Warning first. Confirmation second. Trade third, and never in another order.

Candle thirteen opens at or under where candle twelve closed and closes above where candle eleven opened. One body has covered both of the bodies before it.

Check both ends before you call it, which is the instruction lesson three gave you: the open at or under the previous close, and the close above the previous open. Traders call this one on the close alone and get it wrong regularly.

Engulfing more than one prior body is normal and it is not a disqualifier. What matters is that a single decision erased the ones before it.

Three candles: the tall teal push, then a small body that gaps clear above it, then a navy candle that closes deep inside the first one. The middle candle is the pause. It is not a small down candle and it does not have to be navy at all — what makes it the star is that it is small and it sits above.

This plate carries a trap earlier on, and you should have rejected it. Candle eleven covers most of the teal body before it but not the whole of it, so it is not a bearish engulfing. Nearly is not a formation. If you stopped there you took a shape for a rule.

The star is doubt printed at the top of a move. What follows it is the answer.

Two candles probing the same floor and being refused at it twice. The level is shared to the tick — that is the whole formation, and if the two lows are merely close it is not one.

The body colours do not matter here and the plate deliberately gives you one of each. What matters is the wick: at least sixty per cent of its own candle. If the bodies are the bigger half you are looking at two ordinary candles that happen to line up.

A shared floor is two attempts and two refusals at one price. That is worth more than one candle saying the same thing once.

The mirror of drill one, and the reason the two are in the same set. Candle fourteen opens above where thirteen closed and closes below where thirteen opened. The whole of the previous body is covered.

That last clause is the entire difference from a dark cloud cover. Drill one stopped partway down; this one goes all the way through. Same picture at a glance, different formation, and only the measurement separates them.

If you named drill one and drill five the same thing, go back and look at where each second body finishes. That comparison is what this pair is for.

Four candles, not three, and that is the point of this one. The star is a cluster: two small bodies where the textbook draws one. More than three candles is normal and it is not disqualifying.

What has to be true is the shape of the story. A decision down, a pause that goes nowhere, then a decision up that closes past the middle of the first candle's body. The middle of the body, again — the same measurement as drills one and three.

Three for three on the stars means you are reading formations rather than remembering pictures, and those are different skills.

One candle, not two. A long wick above a small body, and the body sitting at the low of the range — price was pushed up hard and gave all of it back before the candle closed.

At the end of a rally that is a shooting star. The identical shape at the end of a decline is an inverted hammer, and the shape alone cannot tell you which you are looking at. Where it prints decides what it means, which is why the run-in on this plate is not decoration.

It is one of the nine candles of doubt, so it is a warning and not an instruction. Nobody sells a rally on one wick.

The mirror of drill one. A strong bearish candle, then a bullish candle that opens below it, pierces up, and closes above the middle of that bearish body — but below where it opened. Further above the middle, more warning.

This plate also carries the second trap in the set. Candles eleven and twelve both reach down to nearly the same level. Nearly is not a tweezer bottom. A shared floor is shared to the tick or it is two candles that happen to be close, and the difference is not a matter of judgement.

Dark cloud cover on top of rallies, piercing line underneath sell-offs. Same measurement, opposite ends of the chart.

Two prongs into the same ceiling. The rally reached a price twice and was pushed off it twice, and the two highs match to the tick.

The threshold from lesson three applies here as it did on the tweezer bottom: each of those upper wicks has to be at least sixty per cent of its own candle. If the bodies are the bigger half, it is two ordinary candles that happen to line up, and that is a coincidence rather than a formation.

Compare this with drill four. Identical logic, upside down, and both of them are about a price that was tested and held.

The mirror of drill seven. A long wick below a small body sitting at the high of the range: sellers took price down through the session and buyers dragged the whole of it back before the close.

At the end of a decline that is a hammer. The same shape at the top of a rally is a hanging man, and once again the shape does not tell you which. Only the location does.

That is the last drill, and it is the second time in ten that the answer depended on where the candle printed rather than on what it looked like. That is not a coincidence in the set, and it is the thread into the next lesson.