The candlestick chart patterns are used by traders to set up their trades, and predicting the future direction of the price movements. There are many candlestick chart patterns. I will be discussing a few of those.
✅Morning Star is formed after a downtrend indicating a bullish reversal. Generally made of 3 candlesticks, first being a bearish candle, second a Doji, and third being a bullish candle. The first candle shows the continuation of the downtrend, the second being a Doji shows indecision in the market and the third bullish candle shows that bulls are back in action.
✅Bullish Hammer is a single candlestick pattern, which is formed at the end of the downtrend and shows bullish reversal. The real body of this candle is small with a long lower wick which should be more than twice the real body. This candle is formed when the seller pushes the price downwards but at the same time buyers arrive and push the prices up.
✅Bullish Engulfing is formed after a downtrend, indicating a bullish reversal. It is formed when a bearish candle is fully engulfed by a bullish candle which shows that the bulls are back in the market.
✅Three White Soldiers is a multiple candlestick pattern that is formed after a downtrend indicating a bullish reversal. It is formed when three consecutive bullish candles appear one after the other. These three candles show a strong bullish trend.
✅Hanging Man is generally formed at the end of an uptrend and signals bearish reversal. The real body of this candle is small and is located at the top with a lower shadow which should be more than twice the real body. This candlestick pattern has no or little upper shadow.
✅Dark Cloud Cover is formed by two candles, the first candle being a bullish candle which indicates the continuation of the uptrend. The second candle is a bearish candle that opens the gap up but closes more than 50% of the real body of the previous candle which shows that the bears are back in the market and a bearish reversal is going to take place.
✅Bearish Engulfing is formed by two candles, after an uptrend indicating a bearish reversal. It is formed by two candles, the second candlestick engulfing the first candlestick. The first candle being a bullish candle indicates the continuation of the uptrend. The second candlestick chart is a long bearish candle that completely engulfs the first candle and shows that the bears are back in the market.
✅Evening Star is made of 3 candlesticks, first being a bullish candle, second a Doji, and third being a bearish candle. The first candle shows the continuation of the uptrend, the second candle being a doji indicates indecision in the market, and the third bearish candle shows that the bears are back in the market and reversal is going to take place.
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✅Morning Star is formed after a downtrend indicating a bullish reversal. Generally made of 3 candlesticks, first being a bearish candle, second a Doji, and third being a bullish candle. The first candle shows the continuation of the downtrend, the second being a Doji shows indecision in the market and the third bullish candle shows that bulls are back in action.
✅Bullish Hammer is a single candlestick pattern, which is formed at the end of the downtrend and shows bullish reversal. The real body of this candle is small with a long lower wick which should be more than twice the real body. This candle is formed when the seller pushes the price downwards but at the same time buyers arrive and push the prices up.
✅Bullish Engulfing is formed after a downtrend, indicating a bullish reversal. It is formed when a bearish candle is fully engulfed by a bullish candle which shows that the bulls are back in the market.
✅Three White Soldiers is a multiple candlestick pattern that is formed after a downtrend indicating a bullish reversal. It is formed when three consecutive bullish candles appear one after the other. These three candles show a strong bullish trend.
✅Hanging Man is generally formed at the end of an uptrend and signals bearish reversal. The real body of this candle is small and is located at the top with a lower shadow which should be more than twice the real body. This candlestick pattern has no or little upper shadow.
✅Dark Cloud Cover is formed by two candles, the first candle being a bullish candle which indicates the continuation of the uptrend. The second candle is a bearish candle that opens the gap up but closes more than 50% of the real body of the previous candle which shows that the bears are back in the market and a bearish reversal is going to take place.
✅Bearish Engulfing is formed by two candles, after an uptrend indicating a bearish reversal. It is formed by two candles, the second candlestick engulfing the first candlestick. The first candle being a bullish candle indicates the continuation of the uptrend. The second candlestick chart is a long bearish candle that completely engulfs the first candle and shows that the bears are back in the market.
✅Evening Star is made of 3 candlesticks, first being a bullish candle, second a Doji, and third being a bearish candle. The first candle shows the continuation of the uptrend, the second candle being a doji indicates indecision in the market, and the third bearish candle shows that the bears are back in the market and reversal is going to take place.
Thanks for reading and hope you like it.
Please comment and let us know your thoughts on it.
Happy Trading