Homing Pigeon Pattern – Hidden Bullish Reversal

What is Homing Pigeon?

The Homing Pigeon is a two-candle bullish reversal pattern that appears at the end of a downtrend. It is a lesser-known variant of the Bullish Harami, which makes it a "hidden" signal. The first candle is a large bearish candle, reflecting extreme selling pressure. The second candle is a small bullish candle whose body is completely inside the body of the first candle. Notably, the second candle opens below the first candle's close but closes above the first candle's open. This behavior shows that sellers are exhausting and buyers are gradually taking control.

How to Identify the Pattern

To spot a Homing Pigeon pattern, check three conditions:

Here is the basic shape:

Note: If the second candle is a Doji, the pattern is called a "Harami Cross" or "Homing Pigeon Cross". In this lesson, we focus on the standard Homing Pigeon with a small-bodied second candle.

How to Trade It

There are three common approaches:

Additionally, look for confirmation signals:

Real Example

Suppose on the EUR/USD H4 chart, there are five consecutive bearish candles. The sixth is a long bearish candle, and the seventh opens below the sixth's close but closes modestly higher, forming a Homing Pigeon. Within 8 hours, price rallies 50 pips. If you identify it early and buy with a stop loss below the seventh candle's low, you achieve a solid reward-to-risk ratio.

Common Mistakes