📊 Ultimate Guide to Candlestick Patterns Every Trader Must Know! 📈
Candlestick patterns are the language of the charts. 🕯️ If you learn to read them, you gain powerful insights into market sentiment and potential price moves. Here's your go-to guide for the most important candlestick patterns used in crypto and stock trading. Let’s decode them! 🔍
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🟩 1. Bullish Engulfing Pattern 🐂
A Bullish Engulfing happens when a small red candle is followed by a large green candle that completely engulfs the previous red candle.
🔎 What it means:
It signals a strong reversal from a downtrend to an uptrend.
🔥 Key Point:
Best seen after a strong bearish move. Volume confirmation strengthens this pattern.
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🟥 2. Bearish Engulfing Pattern 🐻
A Bearish Engulfing is the opposite: a small green candle followed by a large red candle engulfing it.
🔎 What it means:
Potential reversal from an uptrend to a downtrend.
⚠️ Use With:
Resistance levels or RSI overbought signals for extra confirmation.
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🔥 3. Hammer & Inverted Hammer 🔨
Hammer: Long lower wick, small body on top.
Inverted Hammer: Long upper wick, small body below.
💡 Appears in downtrend, suggests a reversal.
🧠 Psychology:
Buyers stepped in aggressively after sellers tried to push prices down.
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🌪️ 4. Shooting Star & Hanging Man 🌠
Shooting Star: Appears at the top of an uptrend, long upper wick.
Hanging Man: Appears at the end of an uptrend, has a long lower wick.
🧨 What they mean:
A warning of potential reversal — bullish power is weakening.
🚫 Pro Tip: Don’t trade these alone — confirm with volume or trendlines
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🧱 5. Doji Pattern ⚖️
A Doji candle has almost the same open and close price.
💥 Meaning:
Indecision in the market — a potential reversal or trend continuation.
🎯 Types of Doji:
Standard Doji – Neutral
Dragonfly Doji – Bullish reversal
Gravestone Doji – Bearish reversal
