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Category: Bearish reversals

Bearish reversal candlestick patterns typically appear at the end of an uptrend. They suggest that momentum has dissipated and soon the trend will turn bearish. The reliability of these formations – as always – depends very much on the timeframe and the instrument, however it can also be noted that in an established downtrend, bearish reversal candles can safely predict the end of a bullish correction phase. Oftentimes the reversal signal precedes the reversal by several candles, therefore apply stoplosses carefully.