First of all, I would like to point out a few things. These patterns are not 100% guaranteed, but they have a high success rate and probability of consolidation. These patterns should not be used in narrow consolidations, but rather in broad consolidations with well-defined movements.
A reversal pattern is applied to the last movement made by the market; it does not necessarily mean a trend reversal but rather a momentary price correction.
Bullish Reversal Patterns:
1. Hanged Man
For this pattern to be proven, the candle must have a small body and a large lower shadow. The candle can be either green or red, but a red candle (black in the image) reinforces the selling pressure. It must not have an upper shadow or it must be insignificant.
The hanging man appears at the top of an upward movement and signals a possible correction or the beginning of a downward movement.
2. Shooting star or falling star
For the pattern to consolidate, the candle must have a small body and an upper shadow approximately two and a half times larger than the body. If it has a lower shadow, it must be insignificant. Just like the hanging man, the shooting star can be positive or negative, but if it is negative, it will reinforce the pattern.
This candle appears at the top of upward movements.
Bearish Reversal Patterns:
1. Hammer
Perhaps the most famous of the patterns; if it has been on the market for some time I think it is hard to believe that you are not familiar with it.
To be confirmed as a hammer, the candle must have a small body and a lower shadow about two and a half times larger than the body. It is best if there is no upper shadow, but if there is, it should be negligible. Like the others, the pattern accepts both colors for the Candle, but in this case, if it is positive, it will reinforce the pattern.
The hammer appears after an upward corrective movement or after a downward trend.
2. Inverted hammer
It has a small body and a long upper shadow. If it has a lower shadow, it must be very small. Similar to the others, it can be of both colors, but if it is positive, it will reinforce the reversal pattern.
It appears after downward movements or after upward corrections.
Bullish or bearish reversal pattern
1. Tweezers
I left this pattern for last because it can be either a bearish reversal (tweezer base) or a bullish reversal (tweezer top).
The pattern consists of two candles. The first one must be in favor of the trend (negative for a downtrend and positive for an uptrend); the second one can be of any color, but it is preferable that it be the color opposite to the current movement.
Both candles must reach a bottom or top at the same price, creating a support or resistance zone. Often a third candle will occur that respects the support or resistance provided by the previous two. The candles may or may not have shadows.
These are just a few of the many candlestick patterns that exist, but they will certainly help you in your operations from now on. If you are interested in learning more patterns like these, follow me and I will soon address them.
To test what you've learned here take a look at the $BNB 15 minute chart and try to recognize some of the patterns.
Great operations to all and let's play!