10 candlestick patterns every trader should know

Candlestick charts are an essential tool for technical analysis in trading, and understanding candlestick patterns can help traders make better decisions. In this blog, we will discuss 10 of the most important candlestick patterns that every trader should know.

1. Hammer:-

The Hammer pattern is formed when the price opens and trades lower, but then rallies to close near the high. This pattern indicates a potential reversal from a downtrend to an uptrend.

2. Shooting Star:-

The Shooting Star pattern is the opposite of the Hammer pattern, formed when the price opens and trades higher, but then falls to close near the low. This pattern indicates a potential reversal from an uptrend to a downtrend.

3. Bullish Engulfing:-

The Bullish Engulfing pattern is formed when a small bearish candlestick is followed by a larger bullish candlestick that completely engulfs the previous candlestick. This pattern indicates a potential reversal from a downtrend to an uptrend.

4. Bearish Engulfing:-

The Bearish Engulfing pattern is the opposite of the Bullish Engulfing pattern, formed when a small bullish candlestick is followed by a larger bearish candlestick that completely engulfs the previous candlestick. This pattern indicates a potential reversal from an uptrend to a downtrend.

5. Morning Star:-

The Morning Star pattern is formed when a long bearish candlestick is followed by a small bullish candlestick that gaps down, followed by a larger bullish candlestick that closes above the midpoint of the first candlestick. This pattern indicates a potential reversal from a downtrend to an uptrend.

6. Evening Star:-

The Evening Star pattern is the opposite of the Morning Star pattern, formed when a long bullish candlestick is followed by a small bearish candlestick that gaps up, followed by a larger bearish candlestick that closes below the midpoint of the first candlestick. This pattern indicates a potential reversal from an uptrend to a downtrend.

7. Hanging Man:-

The Hanging Man pattern is formed when a small bullish candlestick is followed by a long bearish candlestick with a small upper wick. This pattern indicates a potential reversal from an uptrend to a downtrend.

8. Inverted Hammer:-

The Inverted Hammer pattern is the opposite of the Hanging Man pattern, formed when a small bearish candlestick is followed by a long bullish candlestick with a small lower wick. This pattern indicates a potential reversal from a downtrend to an uptrend.

9. Three White Soldiers:-

The Three White Soldiers pattern is formed when three consecutive long bullish candlesticks are formed, indicating a strong uptrend. This pattern is a bullish continuation pattern.

10. Three Black Crows:-

The Three Black Crows pattern is the opposite of the Three White Soldiers pattern, formed when three consecutive long bearish candlesticks are formed, indicating a strong downtrend. This pattern is a bearish continuation pattern.

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