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. Bearish Engulfing
The engulfing pattern is made up of two candles. In this case, the first candle must be positive and the second negative. The second candle must be larger than the first so that the first does not exceed the limits of the second candle (we say that the second candle must engulf the first).
This pattern appears at the top of upward movements and can indicate a great time to take profits.
2. Bearish Harami
It is also composed of two candles, the first must be positive and the second must be negative. In this case, in contrast to the bearish engulfing, the first candle must be larger than the second, which must not exceed the limits of the first.
Similarly, this pattern also appears at the top of highs and is a good time for profit taking.
Bearish Reversal Patterns
1. High engulfment
Composed of two candles. The first closes negatively, and the second has a positive close with a body that should engulf the entire body of the first.
This pattern appears at the bottom of bearish moves and can be a great time to open a long position.
2. High Harami
Like the others, it presents two candles. In this case, the first is negative and the second is positive and smaller, with its body within the limits of the first candle.
It is preferable that the shadows of the second candle are also within the boundaries of the first.
The Bullish Harami appears at the bottom of bearish movements and may be a good time to open a long position.
I know that the patterns discussed are very similar, but focus on the details so that you can identify each one with its particularities.
These are just a few of the many candlestick patterns that exist, but they will certainly help you. If you are interested in learning more, take a look at my profile and follow me. I am always covering content like this.
Feel free to comment with your questions and ask for an explanation on any topic you want, I will be happy to help.
Great operations to all and let's play!