Candlestick Patterns: Identifying Bearish and Bullish Signals

Candlestick Patterns: Identifying Bearish and Bullish Signals

Candlestick Patterns: Bearish vs. Bullish

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Bearish Patterns

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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