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
Hanging man is the name of a bearish trend reversal pattern, which forms at the top of an uptrend. The Japanese gave this name because it looks like a head with the feet dangling down. It is a single candlestick pattern that has a long lower shadow and a small…
Posted in Bearish reversals
The bearish deliberation pattern is formed by two long white candlesticks that are followed by a small white candle. The market is in an uptrend. The second day has a higher close than the first day. On the third day typically a short white candle, a spinning top or a…
Posted in Bearish reversals, and Bullish reversals
The white spinning top candlestick pattern has a single candle. The body of the candlestick is white and very small. The upper and lower shadows are longer than the body. In this pattern, the opening and closing stock prices are near each other. This pattern forms when there’s indecision among the…
Posted in Bearish reversals
The bearish engulfing candlestick pattern is considered to be a bearish reversal pattern. It forms usually at the top of an uptrend. It consists of two candlesticks: the first is white and the second black. The size of the white one is not that important, but should not be a…
Posted in Bearish reversals
This five candle pattern develops in a continuous uptrend. The first three days of the ladder top pattern are three long white candlesticks. This section of the formation corresponds the three white soldiers candlestick pattern. The fourth day has a higher closing price. The long lower shadow shows that the…
Posted in Bearish reversals
The dark cloud cover pattern consists of two candlesticks; the first is white and the second black. Both candlesticks should have large bodies and the shadows are usually small or don’t exist. The black candlestick must open above the previous close and close below the midpoint of the white candlestick’s…
Posted in Bearish reversals
The black opening marubozu is a single candlestick pattern with a long black body, a lower shadow and the lack of upper shadow. The day opens and prices go below the opening price. Prices continue to move down all day thus forming the long black body. The closing price is…
Posted in Bearish reversals
The bearish breakaway pattern consists of five candles. It is a reversal formation that occurs during an uptrend. The first candle in the formation is long and white. The second candle is also long; price opens higher creating a gap. The third candle can be both black and white, but…
Posted in Bearish reversals, and Bullish reversals
It is a Japanese candlestick pattern having a smaller body than wicks or shadows. It looks like a cross, inverted cross or a plus sign. The word doji refers to both the singular and plural form. A doji reflects hesitation on the market. Prices move above and below the opening…
Posted in Bearish reversals
Bearish belt hold is a single bearish reversal pattern, appearing in an uptrend. In this pattern, the day opens at its high level, but then price falls and closes near its low, not necessarily at the lows of the day. The candle is a black opening marubozu. It has very…