Candlestick Patterns: Identifying Bearish and Bullish Signals
Candlestick Patterns: Bearish vs. Bullish
Bearish Patterns
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Hanging Man
- Description: A candlestick pattern with a long wick below the body and a small upper wick. The body length is usually 1/3 of the lower wick.
- Context: Indicates potential reversal from an uptrend to a downtrend, suggesting sellers are gaining control.
- Additional Info: Typically found in uptrends, signaling the exhaustion of a bullish movement.
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Shooting Star
- Description: Inversion of the Hanging Man with a small body and long wick above. Little to no lower wick present.
- Context: Signals trend exhaustion in an uptrend.
- Additional Info: Indicates a reversal might occur; the long upper wick suggests resistance.
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Gravestone Doji
- Description: Open, close, and low prices are identical, or almost so, with a long upper wick.
- Context: Reflects indecision; sellers ultimately regain control.
- Additional Info: Often appears at the top of uptrends.
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Bearish Engulfing
- Description: A large red candlestick engulfs a smaller preceding green candlestick.
- Context: Signals a reversal from bullish to bearish.
- Additional Info: Highlights strong selling pressure.
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Dark Cloud Cover
- Description: A red candle opens above the previous green close and closes below its midpoint.
- Context: Indicates a potential bearish reversal.
- Additional Info: An incomplete engulfing pattern.
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Bearish Harami
- Description: A large green candle followed by a small red candle within the former's body.
- Context: May suggest a trend reversal.
- Additional Info: A pattern signaling loss of momentum.
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Evening Star
- Description: Consists of a large green candle, followed by a Doji with a gap, completed by a large red candle that closes in the body of the first candle.
- Context: A strong bearish reversal pattern.
- Additional Info: Often seen at the top of an uptrend.
Bullish Patterns
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Hammer
- Description: Similar in shape to a Hanging Man, but occurs in a downtrend.
- Context: Signals a potential uptrend reversal.
- Additional Info: Strong indication of buyers taking control.
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Inverted Hammer
- Description: Appears at the end of a downtrend with a long upper wick and little to no lower wick.
- Context: Can indicate a bullish reversal.
- Additional Info: Requires confirmation from the following day's price action.
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Dragonfly Doji
- Description: Open, close, and high prices are similar, with a long lower wick.
- Context: Suggests a reversal to bullish sentiment.
- Additional Info: Often appears at the bottom of downtrends.
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Bullish Engulfing
- Description: A large green candle engulfs a smaller preceding red candle.
- Context: Indicates a reversal from bearish to bullish.
- Additional Info: Demonstrates strong buying pressure.
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Piercing Pattern
- Description: The green candle opens below the prior red candle and closes above its midpoint.
- Context: Signals potential bullish reversal.
- Additional Info: Indicates buyers are overcoming sellers.
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Bullish Harami
- Description: A large red candle followed by a small green candle within the former's body.
- Context: Suggests a trend reversal.
- Additional Info: Often sees buying pressure increase.
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Morning Star
- Description: A large red candle, followed by a Doji with a gap, completed by a large green candle closing in the body of the first candle.
- Context: Strong bullish reversal signal.
- Additional Info: Typically appears at the bottom of downtrends.
Reference:
www.ashikagroup.com
What Are Bearish And Bullish Candlestick Patterns? - Ashika Group
fbs.eu
Bullish and bearish reversal candlestick patterns - FBS EU
www.tastyfx.com
16 candlestick patterns every trader should know - TastyFX