When it comes to technical analysis in trading, candlestick patterns play a crucial role in identifying potential market reversals. While many traders are familiar with popular patterns like the "Engulfing" or the "Doji," some lesser-known bearish candle patterns can be equally, if not more, effective in predicting a downturn. Here are 11 bearish candle patterns that are often overlooked, yet powerful when correctly identified.
Click here to vote for us and support us
1. Abandoned Baby
This pattern is rare but highly reliable. It forms after a strong bullish trend, indicating a potential reversal. The pattern consists of three candles: a bullish candle, a gap up doji, and a bearish candle that gaps down. The gap between the doji and the surrounding candles is what makes this pattern stand out.
2. Evening Star
The Evening Star is a three-candle pattern that signals a bearish reversal. The first candle is bullish, followed by a small-bodied candle (which can be bullish or bearish), and then a strong bearish candle. The strength of the bearish candle closing near its lows confirms the reversal.
3. Dark Cloud Cover
This two-candle pattern occurs after a bullish trend. The first candle is a strong bullish candle, but the second opens higher and closes below the midpoint of the first candle. This pattern indicates that bears are beginning to overpower the bulls.
4. Three Black Crows
This is a powerful reversal pattern made up of three consecutive bearish candles. Each candle opens within the previous candle's body and closes lower, showing consistent selling pressure.
5. Bearish Harami
The Bearish Harami is a two-candle pattern where a small bearish candle is contained within the body of the previous large bullish candle. This pattern suggests indecision in the market, with the potential for a bearish reversal.
6. Hanging Man
The Hanging Man appears at the top of an uptrend and is characterized by a small body and a long lower wick. The long wick indicates that sellers pushed prices down significantly during the session, even though the bulls managed to push it back up, signaling potential weakness in the market.
7. Shooting Star
This pattern looks like an inverted hammer but occurs at the top of an uptrend. It has a small body and a long upper wick, indicating that bulls tried to push prices higher but were met with significant resistance, leading to a potential reversal.
8. Bearish Engulfing
The Bearish Engulfing pattern is a strong reversal signal where a small bullish candle is followed by a larger bearish candle that completely engulfs it. This indicates a strong shift in market sentiment from bullish to bearish.
9. Tweezer Tops
This pattern consists of two candles with similar highs, usually after an uptrend. The first is bullish, and the second is bearish. The fact that the market couldnât surpass the previous high suggests a potential reversal.
10. Gravestone Doji
The Gravestone Doji is a single-candle pattern with no body and a long upper wick. It indicates that bulls pushed prices higher, but bears managed to bring them back down to the open price, signaling a potential reversal.
11. Bearish Belt Hold
This single-candle pattern is a long bearish candle that opens at its high with no upper shadow. It indicates that sellers controlled the session from start to finish, often appearing at the end of an uptrend as a reversal signal.
### Conclusion
These 11 bearish candlestick patterns may not be as widely taught as the more common ones, but they are powerful tools for any trader looking to refine their technical analysis skills. Recognizing these patterns in real-time can provide valuable insights into potential market reversals, giving traders an edge in their decision-making processes. Whether youâre a seasoned trader or just starting, adding these patterns to your repertoire could significantly enhance your trading strategy.
