Candlestick charts explained
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.
Posted in Bearish reversals, and Bullish reversals
It has very long shadows. Both of the upper and lower shadows are long and close in length and the body is lacking. This pattern forms when prices trade well above and below the day’s opening price but then close either exactly at or almost at the same level as…
Posted in Bearish reversals
The gravestone doji is a bearish reversal candlestick pattern that mostly appears at the top of uptrends. It forms when the open, low, and close are the same or about the same price. This formation has a long upper tail but no lower tail, thus it shows an upside-down capital…
Posted in Bearish reversals
Black closing marubozu is a single candle pattern. It has a long black body and an upper shadow. There is no lower shadow, showing that the closing price and the lowest price are at the same level. The pattern shows that sellers controlled the trading day from open to close,…
Posted in Bearish reversals, and Continuation patterns
The black marubozu is a simple single candle pattern. As the name suggests it is black, showing that the stock price closed on a lower level than it started the day. It has a long body without any lower or upper shadows. The day opens and prices continue to move…
Posted in Bearish reversals
Bearish harami cross is a bearish trend reversal pattern. It has two elements: a large white candle on the first day that is followed by a doji. The first day candle completely engulfs the doji. The pattern forms in a prevailing uptrend and is even more significant than a regular…
Posted in Bearish reversals
The shooting star candlestick formation is regarded as a bearish reversal pattern that typically forms at the top of an uptrend. Preceding candlesticks must be white and should have a relative large real body. The second candlestick is the star with a short black or white body that gaps away…
Posted in Bearish reversals
Bearish harami is a two-line pattern. It consists of a white body and a small black body that is completely engulfed by the body of the first day. The pattern appears in an uptrend and forecasts its reversal. The first line can be any basic candle with a white body.…
Posted in Bearish reversals
The evening star pattern is a bearish trend reversal sign. It appears on the top of an uptrend and has three elements. Elements of evening star pattern On the first day a long white candlestick forms, showing a strong buying disposition. On the consecutive day the trend is still growing…
Posted in Bearish reversals
Bearish doji star pattern is a trend reversal sign that consists of two elements. The first day is a long white candlestick, that is formed in an uptrend. The following day is a doji, with small shadows. The doji gaps up, the volume of trading is low. Characteristics The most…
Posted in Bearish reversals
Descending hawk is a bearish reversal pattern, which forms in an uptrend. On the first day a long white candle evolves in the direction of the trend. On the second day, again a white body appears. The body of the first day candle completely engulfs the second candle. Shadows are…