Top 5 Candle Patterns Every Binance Trader Must Know

1. Doji: Signals indecision with near-identical opening and closing prices, hinting at a potential trend change or market pause.

2. Hammer: A reversal pattern appearing at the end of a downtrend, characterized by a small body and a long lower wick—showing buyers pushing prices up after an initial drop.

3. Shooting Star: The bearish counterpart to the hammer, forming after an uptrend with a small body and long upper wick, suggesting an upcoming downward shift.

4. Engulfing Patterns: A bullish engulfing consists of a small red candle followed by a larger green one, indicating strong buyer momentum. Conversely, a bearish engulfing involves a small green candle overtaken by a larger red one, signaling selling pressure.

5. Head and Shoulders: This trend reversal formation, with three peaks—the middle being the tallest—often warns that a current trend may be running out of steam.