Master These Candlestick Patterns to Avoid Losses!
1. Bullish Engulfing
Description: A small red candle followed by a larger green candle that completely engulfs it.
Significance: Indicates strong buying pressure and suggests a potential bullish reversal after a downtrend.
2. Bearish Engulfing
Description: A small green candle overtaken by a larger red candle that engulfs it.
Significance: Signals significant selling pressure, often leading to a bearish reversal after an uptrend.
3. Dark Cloud Cover
Description: A green candle followed by a red candle that opens above the midpoint of the green but closes below it.
Significance: Suggests selling pressure and a possible bearish reversal after an uptrend.
4. Ichimoku Cloud Break
Description: Price moves above or below the Ichimoku cloud.
Significance: A breakout above the cloud suggests an uptrend, while a move below indicates downward momentum.
5. Double Top
Description: Two candles with similar highs after an uptrend.
Significance: Indicates resistance and weakening buying pressure, signaling a possible bearish reversal.
6. Double Bottom
Description: Two candles with similar lows following a downtrend.
Significance: Suggests strong support and a potential bullish reversal.
7. Bullish Harami
Description: A large red candle followed by a smaller green candle completely within its body.
Significance: Indicates diminishing selling pressure and hints at a possible bullish reversal.
8. Bearish Harami
Description: A large green candle followed by a smaller red candle enclosed within its body.
Significance: Reflects reduced buying pressure, suggesting a possible bearish reversal.
9. Indecision Pattern
Description: A series of candles showing uncertainty or lack of direction.
Significance: Signals a potential breakout or continuation; wait for confirmation.
10. Bullish Counterattack
Description: After a downtrend, the second candle opens lower but closes near the previous open.
Significance: Shows buyer interest and hints at an upward reversal.
11. Bearish Counterattack
Description: Following an uptrend, the second candle opens higher but closes near the previous close.
Significance: Indicates selling pressure and a possible downward reversal.
12. Strong Momentum
Description: Two consecutive candles moving strongly in the same direction.
Significance: Reflects solid momentum, likely indicating trend continuation.
Takeaway
Recognizing these patterns can help identify trend reversals, momentum shifts, and ideal entry or exit points in trades.