To succeed in cryptocurrency trading, first learn how to read candlestick charts
1. Bullish Candlestick Patterns
1. Hammer
The hammer is located at the bottom of a downtrend and has a long lower shadow, at least twice the size of the body. It indicates that despite significant selling pressure, buyers push the price up close to the opening level. A green hammer is considered more bullish than a red one.
2. Inverted Hammer
The inverted hammer pattern is similar to the hammer but has a long upper shadow above the body. It usually appears at the bottom of a downtrend, indicating potential upward movement. Even if sellers pull it down to the opening level, the price does not continue to decline, suggesting a possible bullish reversal.
3. Three White Soldiers
The three white soldiers pattern consists of three consecutive green candles, where the opening price is within the range of the previous candle's body, and the closing price exceeds the previous candle's high. The short lower shadows indicate sustained buying pressure.
4. Bullish Engulfing
The bullish engulfing consists of a longer red candle followed by a shorter green candle, where the green candle is completely within the body of the red candle, indicating a slowdown or impending end of the bearish trend.
2. Bearish Candlestick Patterns
1. Hanging Man
The hanging man is similar to the hammer but appears at the end of an uptrend, indicating that despite buyers pushing the price up, large-scale selling signifies that the market may soon turn bearish.
2. Shooting Star
The shooting star is a candlestick with a long upper shadow and a short body near the bottom, usually appearing at the end of an uptrend, indicating that after reaching a high, sellers dominate and push the price down.
3. Three Black Crows
The three black crows consist of three consecutive red candles, where the opening price is within the range of the previous candle's body, and the closing price is below the previous candle's low, indicating sustained selling pressure pushing the price down.
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