Bearish Japanese candlesticks usually appear when there is strong selling pressure, and indicate the possibility of a continuation of the downtrend or a reversal of the uptrend. There are several common patterns that reflect the downtrend, including:
1. Hanging Man candlestick
It appears in an uptrend and indicates weakness in buyers and the possibility of a downtrend starting.
2. Bearish Engulfing candlestick
It consists of two candles, where the second candle (bearish) completely engulfs the first candle (bullish), indicating strong selling pressure.
3. Shooting Star candlestick
It has a small body and a long upper shadow, and appears at the top of the trend, indicating the possibility of a downward reversal.
4. Dark Cloud Cover candlestick
It consists of two candles: the first is bullish and the second falls below the middle of the body of the first candle, indicating increased selling pressure.
If you notice any of these patterns in your charts, it may be a good idea to study the support and resistance levels carefully, and develop a risk management plan.
