Understanding candlestick patterns can help you spot market reversals and avoid unnecessary losses. Here are some key bullish and bearish patterns every trader should know:
Bullish Patterns (Signal a Potential Uptrend)
1. Piercing Pattern
A red candle followed by a strong green candle.
The green candle closes above the midpoint of the red one.
Indicates a bullish reversal at support levels.
2. Morning Star
A three-candle pattern: Red, small-bodied (indecision), and green.
Signals a transition from a downtrend to an uptrend.
Stronger when the green candle has high volume.
3. Morning Doji Star
Similar to the Morning Star, but the middle candle is a doji.
Confirms a bullish reversal after a downtrend.
4. Bullish Engulfing
A small red candle followed by a large green candle that engulfs it.
Indicates strong buying pressure and reversal.
5. Bullish Harami
A large red candle followed by a small green candle inside its body.
Suggests a potential trend reversal.
6. Bullish Harami Cross
Similar to Bullish Harami but with a doji in the second candle.
Signals indecision that often leads to a bullish reversal.
7. Three Inside Up
Three candles: A red, a small green inside the red, and another strong green.
Confirms a bullish reversal.
8. Three White Soldiers
Three consecutive strong green candles.
Each opens within the previous candle’s body and closes higher.
Indicates a strong bullish trend.
9. Bullish Doji Star
A red candle followed by a doji (indecision).
Confirms reversal if followed by a strong green candle.
10. Tweezer Bottoms
Two candles with similar lows at support.
Signals a potential reversal.
11. Bullish Stick Sandwich
A red-green-red pattern where the middle green candle has a higher close.
Indicates accumulation before a bullish move.
Bearish Patterns (Signal a Potential Downtrend)
1. Dark Cloud Cover
A green candle followed by a red one that closes below its midpoint.
Suggests a bearish reversal at resistance.
2. Evening Star
A three-candle pattern: Green, small-bodied (indecision), and red.
Indicates a bearish reversal at the top of an uptrend.
3. Evening Doji Star
Similar to the Evening Star, but the middle candle is a doji.
Confirms a bearish reversal when followed by a strong red candle.
4. Bearish Engulfing
A small green candle followed by a large red candle that engulfs it.
A strong bearish signal indicating trend reversal.
5. Bearish Harami
A large green candle followed by a small red candle inside its body.
Suggests a potential bearish reversal.
6. Bearish Harami Cross
Similar to Bearish Harami but with a doji in the second candle.
Indicates market indecision leading to a bearish reversal.
7. Three Inside Down
Three candles: A green, a small red inside the green, and another strong red.
Confirms a bearish reversal.
8. Three Black Crows
Three consecutive strong red candles.
Each opens within the previous candle’s body and closes lower.
Indicates strong bearish momentum.
9. Bearish Doji Star
A green candle followed by a doji (indecision).
Confirms a bearish reversal if followed by a strong red candle.
10. Tweezer Tops
Two candles with similar highs at resistance.
Indicates a potential bearish reversal.
11. Bearish Stick Sandwich
A green-red-green pattern where the middle red candle has a lower close.
Indicates distribution before a bearish move.
Final Thoughts
These candlestick patterns help traders identify trend reversals and continuation points, making them a powerful tool in technical analysis.
Check out the candlestick chart below! 👇
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