1. Morning Star
This is a bullish reversal pattern made up of three candles that typically appears after a downtrend. It starts with a strong bearish candle, followed by a small-bodied candle showing indecision, and ends with a solid bullish candle. This formation signals that the momentum may be shifting upward.
2. Hammer
Appearing at the bottom of a downtrend, the Hammer is a single candle with a small body and a long lower wick. It shows that sellers pushed prices down, but buyers regained control by the close. A green hammer is generally more powerful, but red ones can also indicate a reversal when confirmed by further bullish activity.
3. Bullish Engulfing
This two-candle pattern occurs when a small red candle is followed by a larger green candle that fully engulfs the previous one. It’s a clear sign that buyers have taken the upper hand and a price surge may follow.
4. Inverted Hammer
Similar in structure to the Hammer but with a long upper wick. It shows buyers made an effort to push the price up after a downtrend. Confirmation with a bullish candle afterward strengthens the reversal signal.
5. Piercing Pattern
This two-candle formation starts with a red candle followed by a green one that opens lower but closes above the midpoint of the previous candle. It suggests that buying interest is entering the market and a reversal may be underway.
6. Three White Soldiers
This is a strong bullish reversal pattern made up of three consecutive green candles, each closing higher than the last. It represents sustained buying pressure and is often seen after a decline or consolidation period.
7. Rising Three Methods
A continuation pattern where a large green candle is followed by a series of smaller red candles within its range, then completed with another strong green candle. This setup shows a temporary pause before the uptrend resumes.
8. Dragonfly Doji
This doji has a long lower shadow and closes near its high, indicating sellers tried to push the price lower but failed. When it appears after a decline, it’s a potential sign of bullish reversal.
9. Bullish Harami
A two-candle pattern where a large red candle is followed by a small green candle that fits within the body of the previous candle. It reflects market hesitation and could signal the end of selling pressure.
Final Thoughts
Candlestick patterns are more than just visual indicators—they reflect real-time market sentiment and trader psychology. When combined with tools like support/resistance levels, volume analysis, and trendlines, these patterns can help you make more informed and confident trading decisions.
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