1. Bullish Reversal Pattern (First Pattern)
Identification:
Initially, several red candles appear, indicating a downward trend (price decline).
Then, green candles start forming, suggesting a market reversal with prices increasing.
Potential Direction:
Upward.
This is a bullish reversal pattern, meaning the market is likely to move from a downtrend to an uptrend.
---
2. Bearish Reversal (Second Pattern)
Identification:
The market initially moves upward with green candles.
Then, a candle with a long upper wick forms, indicating that buyers failed to push the price higher.
Following this, red candles appear, showing a potential reversal.
Potential Direction:
Downward.
This signals a bearish reversal, meaning the market may start declining.
---
3. Evening Star Pattern (Third Pattern)
Identification:
The market is in an uptrend with green candles.
A small candle (either a doji or with a small body) forms next, indicating indecision.
This is followed by a large red candle, signaling a reversal.
Potential Direction:
Downward.
---
4. Bearish Engulfing Pattern (Fourth Pattern)
Identification:
The market is moving upward with green candles.
A large red candle then forms, completely engulfing the previous green candle.
Potential Direction:
Downward.
This is known as a bearish engulfing pattern, indicating that sellers have taken control.
---
5. Doji Pattern (Last Pattern)
Identification:
The candle has a very small or almost non-existent body (the green and red portions are nearly equal).
This signals indecision or a potential pause in the market trend.
Potential Direction:
The trend might reverse or change, usually indicating a downward shift.
---
These candlestick patterns are essential for identifying market trends and predicting potential price movements. However, itâs crucial to consider other factors such as volume and support/resistance levels when using them for analysis.
