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These patterns help traders predict potential future price movements based on the current and past price action of an asset. Here's a breakdown of some common patterns shown:
Bullish and Bearish Patterns:
Three White Soldiers (Bullish) vs. Three Black Crows (Bearish): Indicate a strong continuation in the trend.Bullish Engulfing vs. Bearish Engulfing: A reversal pattern where a larger candle engulfs the previous candle, signaling a potential trend reversal.Morning Star (Bullish) vs. Evening Star (Bearish): A three-candle pattern signaling a reversal after a downtrend (Morning Star) or an uptrend (Evening Star).
Continuation Patterns:
Falling/Rising Three Methods: These are continuation patterns where small candles form between two large candles, indicating the continuation of the current trend.Bullish/Bearish Breakaway: These show a breakaway from a consolidation phase, usually indicating strong continuation.
Reversal Patterns:
Hammer (Bullish) vs. Shooting Star (Bearish): These single candle patterns indicate potential reversals. The Hammer is a bullish reversal after a downtrend, and the Shooting Star indicates a bearish reversal after an uptrend.Doji Patterns: Indicate indecision in the market and can precede reversals when followed by confirmation candles.
Gap Patterns:
Upside/Downside Tasuki Gap: This is a gap continuation pattern that appears in an uptrend or downtrend and suggests that the trend will continue.
This chart is useful for technical traders who rely on candlestick patterns to time entries and exits in the market. Each pattern gives traders a clue about where the market might be heading based on previous price action.
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