Candlestick patterns are a powerful tool for reading the market and making informed trading decisions. By mastering these patterns, you can avoid fakeouts, nail reversals, and ride trends like a pro.
Bullish Reversal Patterns
These patterns signal a potential trend reversal and are often found at the bottom of downtrends.
1. *Hammer 🔨*
- Tiny body, long lower wick
- Appears at the bottom of downtrends
- Buyers are fighting back strong
- *Entry after bullish confirmation*
2. *Inverted Hammer ⛏️*
- Small body, long upper wick
- Found at the bottom of dumps
- Signals trend reversal incoming
3. *Bullish Engulfing 💚*
- Small red candle swallowed by a big green one
- Strong flip from bears to bulls
- Works great at support zones
4. *Piercing Line 🌅*
- Red candle followed by green closing above midpoint
- Shift in momentum to bulls
- Confirmation = key
5. *Morning Star 🌟*
- 3 candles: red ➝ indecision ➝ green
- Classic reversal formation
- Perfect at oversold or support zones
6. *Three White Soldiers 🪖🪖🪖*
- 3 strong green candles in a row
- Each opens within the last one
- Signals powerful bullish trend forming
Bearish Reversal Patterns
These patterns signal a potential trend reversal and are often found at the top of uptrends.
1. *Hanging Man 🧍*
- Same as a hammer — but at the top
- Signals bull exhaustion
2. *Shooting Star 🌠*
- Small body, long upper wick
- Appears after a pump
- Strong selling pressure detected
3. *Bearish Engulfing 🔴*
- Small green swallowed by large red
- Big bearish shift
- Stronger at resistance levels
4. *Evening Star 🌘*
- Green ➝ indecision ➝ red
- Trend killer at the top of rallies
5. *Three Black Crows 🪦🪦🪦*
- 3 nasty red candles in a row
- Bears fully in control
- Expect more downside
6. *Dark Cloud Cover ☁️*
- Green candle followed by red that closes below midpoint
- Reversal warning: bulls fading fast
Continuation Patterns
These patterns signal that the trend is not over yet.
1. *Doji ⚖️*
- Tiny body, long wicks
- Pure indecision — wait for confirmation
2. *Spinning Top 🎯*
- Small body, upper & lower wicks
- Confirms confusion — follow-up candle gives direction
3. *Bearish Tri-Star 🔻*
- Big red ➝ 2 small greens ➝ red
- Trend continuation for bears
4. *Bullish Tri-Star 🔺*
- Big green ➝ 2 small reds ➝ green
- Bulls still running the show
Final Words
Candlesticks are price action psychology in motion. By mastering these patterns, you'll be able to:
- Avoid fakeouts
- Nail reversals
- Ride trends like a pro
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