1. Bullish Patterns
- Hammer: Indicates a bullish reversal after a decline, where the lower shadow is long.
- Inverted Hammer: Indicates a bullish reversal, with a long upper shadow.
- Bullish Engulfing: A small red candle followed by a large green candle that engulfs it, a strong bullish signal.
- Morning Star: Consists of 3 candles (red, small, green), indicating a bullish reversal.
- Three White Soldiers: 3 consecutive green candles, confirming the bullish trend.
2. Bearish Patterns
- Hanging Man: Indicates a bearish reversal after an increase, with a long lower shadow.
- Shooting Star: Resembles a star with a long upper shadow, a bearish signal.
- Bearish Engulfing: Opposite of the bullish pattern, a large red candle engulfs the green candle.
- Evening Star: 3 candles (green, small, red), indicating a bearish reversal.
- Three Black Crows: 3 consecutive red candles, confirming the bearish trend.
3. Continuation Patterns
- Rising Three Methods: Bullish, interspersed with bearish candles, then a continuation of the rise.
- Falling Three Methods: Bearish, interspersed with bullish candles, then a continuation of the decline.
Important Note
- These patterns help in market analysis, but should be supported by other indicators such as volume or moving averages.
- A good understanding of candlestick patterns is the first step to becoming a professional trader.
