Candlestick patterns are the 'barometer' of market sentiment. By identifying candlestick patterns, one can clearly capture changes in bullish and bearish forces and predict trend reversals or continuation signals. The following 11 classic patterns are categorized by reversal (trend reversal), continuation (trend adjustment followed by continuation), and undecided direction, with key identification points + practical techniques, essential for beginners!
I. Bullish Reversal (Fall → Rise, Capture Trend Turning Point)
1. Double Bottom/W Bottom
Shape: During a decline, two tests of similar lows form a 'W', with the middle high being the 'neckline'.
Logic: Two bottoms tested without breaking, bears exhausted, bulls take over.
Practical: Break through the neckline + increased volume (confirming buyers) to enter, set stop loss below the neckline/second low.
2. Multiple Bottoms/Bottom Reversal
Shape: Oscillation at low levels three times or more, ultimately breaking above the upper range.
Logic: Repeated tests of the bottom without making new lows, support is very stable, the market transitions from 'bearish dominance' to 'bullish accumulation'.
Practical: Focus on 'valid breakout' (increased volume + breaking upper edge), can add positions on support retest, set stop loss at the lower edge of the oscillation range.
3. Rounded Cup Handle
Shape: First a gentle decline forms a 'rounded bottom' (U-shape), after some oscillation at the bottom, it slightly retraces to form a 'cup handle', and ultimately breaks through the upper edge of the cup handle.
Logic: Rounded bottom shows bearish decay, bulls enter; the cup handle is a 'washout', digesting profit-taking.
Practical: Cup handle amplitude ≤ cup body 1/3, break through the upper edge of the cup handle + increased volume to enter, target looks at 'cup body height' (vertical distance from bottom to cup top).
II. Bearish Reversal (Rise → Fall, Escape the Top Warning)
4. Head and Shoulders Top
Shape: Three peaks in an uptrend (head is the highest, left and right shoulders are slightly lower), the line connecting the lows is the 'neckline'.
Logic: Right shoulder is lower than the head, bulls are weak, bears counterattack, trend reverses.
Practical: Break below neckline + volume confirmation, enter short, set stop loss above the neckline/right shoulder high, target looks at 'head → neckline vertical distance' (downward equivalent).
5. Ascending Wedge
Shape: In an uptrend, upper and lower bounds converge (upper bound slope < lower bound), rise becomes narrower.
Logic: The slope of the uptrend flattens, bulls lack strength, momentum declines to turn bearish.
Practical: Enter short after breaking the lower bound, set stop loss at the high point of the wedge upper bound, the terminal pattern of the rise is more reliable (do not misjudge low wedge).
III. Bullish Continuation (After a consolidation, further rise, opportunity to add positions)
6. Ascending Triangle
Shape: In an uptrend, the pullback lows move up (ascending support line), highs encounter resistance at the same level, ultimately breaking through the resistance.
Logic: Buyer strength increases (support moves up), breaking resistance continues to rise.
Practical: Enter upon increased volume breaking resistance, set stop loss below the support line, target looks at 'triangle height' (vertical distance from resistance to support).
7. Ascending Flag
Shape: A rapid rise (flagpole) followed by a downward-sloping parallel consolidation (flag area), breaking through the upper edge of the flag area.
Logic: Flagpole = strong rise; flag area = digesting profit-taking, after consolidation bulls continue assault.
Practical: Flag area consolidation ≤ 2 weeks, break through upper edge + increased volume to enter, target reference is 'flagpole length' (distance from the starting point of the flagpole to the high point before consolidation).
IV. Bearish Continuation (After a decline, further drop, opportunity to add short positions)
8. Descending Flag
Shape: A rapid drop (flagpole) followed by an upward-sloping parallel consolidation (flag area), breaking below the lower edge of the flag area.
Logic: Flagpole = strong bearish; flag area = bullish consolidation, followed by a bearish continuation.
Practical: Flag area consolidation with reduced volume (bears are weak), break below the lower edge to enter short, set stop loss at the upper edge of the flag area, target reference is 'flagpole length' (downward equivalent) #币圈 #k线分析 #区块链