Candlestick patterns are one of the most powerful tools in crypto trading. If you understand them, you can predict market moves before they happen. If you ignore them, you risk getting trapped by fakeouts and losing money.
Here are the most important candlestick patterns every trader should know:
Bullish Engulfing
Occurs when a small red candle is followed by a big green candle that completely engulfs it. This shows strong buying pressure and usually signals a reversal to the upside.Bearish Engulfing
A large red candle fully covers the previous green candle. This pattern warns of a potential drop and often marks the start of a downtrend.Hammer
A small body with a long lower wick. Found at the bottom of a downtrend. It shows that sellers tried to push price down but buyers fought back, signaling a possible reversal.Shooting Star
Looks like an upside-down hammer. Found at the top of an uptrend. It warns that buyers are losing strength and a bearish reversal could follow.Doji
A candle where the open and close are nearly the same. It means indecision in the market. When seen after a strong move, it may signal a potential reversal.Morning Star
A 3-candle bullish reversal pattern: red candle → small indecisive candle → strong green candle. Found at the end of a downtrend.Evening Star
The opposite of Morning Star. A 3-candle bearish reversal: green candle → small candle → strong red candle. Seen at market tops.Three White Soldiers
Three strong green candles in a row. Signals strong buying momentum and often confirms a trend reversal or continuation.Three Black Crows
Three red candles in a row, each opening inside the previous one and closing lower. A strong bearish signal.Inside Bar
A smaller candle within the range of the previous candle. It shows a pause in the market. A breakout in either direction may follow.
Why This Matters:
Candlestick patterns don’t guarantee success, but they give you an edge. Combine them with support/resistance and volume for high-probability trades. Every pro trader watches these patterns — and now, so can you.
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