In the fast-moving world of crypto, understanding candlestick patterns isn’t just helpful — it’s essential. These patterns tell the real story behind price movements and can help you avoid costly mistakes, spot trend reversals, and enter trades with confidence. Here are 6 powerful candlestick patterns every trader must know to reduce risk and maximize profit.
1. Bullish Engulfing Pattern
This pattern appears at the bottom of a downtrend and signals a potential reversal. A small red (bearish) candle is followed by a larger green (bullish) candle that completely engulfs it.
✅ Signal: Reversal to the upside — buy opportunities.
2. Bearish Engulfing Pattern
This is the opposite of the bullish version. A small green candle is followed by a large red candle that engulfs it. Found at the top of an uptrend, it warns of a reversal.
✅ Signal: Reversal to the downside — sell or short.
3. Doji Candle
A Doji shows indecision. The open and close prices are nearly identical, forming a thin cross shape. On its own, it signals uncertainty — but in context with trends, it can indicate a reversal.
✅ Signal: Wait for confirmation — possible trend change coming.
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