TABLE OF CONTENT
1. Type of candlestics in crypto chart
2. Bullish candlestick patterns
1. Type of candlestics in crypto chart
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| Image of basic candlestick patterns with labels for the body, wicks, open, close, high, and low prices. |
1. Basic Candlesticks
Each candlestick has:
Body: The filled part shows the open and close prices.
Wick (or Shadow): Thin lines above and below show the highest and lowest prices during the period.
Color: Often green (bullish, close price is higher than open) or red (bearish, close price is lower than open).
2. Common Candlestick Patterns
Bullish Patterns:
Hammer: Small body with a long lower wick. Signals potential reversal after a downtrend.
Bullish Engulfing: A small red candle followed by a larger green one, covering it entirely. Indicates a potential upward reversal.
Morning Star: Three candles red, doji (small or neutral), and green often signals the beginning of an uptrend.
Bearish Patterns:
Shooting Star: Small body with a long upper wick, suggesting a reversal downwards after an uptrend.
Bearish Engulfing: Small green candle followed by a larger red one. Indicates a potential downward reversal.
Evening Star: The opposite of a Morning Star; it appears after an uptrend and signals a potential downtrend.
Continuation Patterns:
Doji: Almost no body, showing indecision in the market. Appears during up or down trends and signals possible continuation.
Spinning Top: Small body with long wicks, showing uncertainty. Commonly seen in periods of consolidation.
3. Trend Indicators
Three White Soldiers: Three consecutive green candles with increasing prices, signaling a strong bullish trend.
Three Black Crows: Three red candles in a row, each closing lower than the previous, indicating a bearish trend.
Learning these patterns helps in understanding market psychology and can assist in making more informed trading decisions.
2. Bullish candlestick patterns
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| Crypto learning bullish candlestick patterns. |
Bullish candlestick patterns signal a potential reversal from a downtrend to an uptrend. Here are some of the most commonly used bullish patterns:
1. Hammer
A single candlestick with a small body at the top, a long lower wick, and little or no upper wick. It resembles a hammer.
Appears in a downtrend and indicates potential reversal to an uptrend as buyers step in to push prices higher.
2. Bullish Engulfing
Consists of two candles. The first is a small bearish candle, followed by a larger bullish candle that "engulfs" it.
A strong reversal signal, suggesting that buying momentum is overpowering selling pressure.
3. Piercing Line
A two-candle pattern where a bearish candle is followed by a bullish candle that opens lower but closes above the midpoint of the first candle.
Suggests a reversal, with buyers taking control and pushing prices up.
4. Morning Star
A three-candle pattern. It starts with a large bearish candle, followed by a small-bodied candle (indicating indecision), and then a bullish candle that closes into the first candle's range.
Signals the end of a downtrend and the beginning of a bullish move.
5. Three White Soldiers
Three consecutive bullish candles, each opening within the previous body and closing progressively higher.
Strong bullish pattern indicating sustained buying pressure and a likely trend reversal.
6. Doji Star
A candlestick with a very small body, appearing in a downtrend and followed by a strong bullish candle.
Signals indecision in the downtrend and a possible reversal as buyers start to gain control.
7. Inverted Hammer
Looks similar to a hammer but with a long upper wick and a small body at the bottom. It appears in a downtrend.
Indicates a potential reversal if followed by a bullish candle, as sellers lose momentum.
These patterns are often more reliable when combined with other indicators, like volume or moving averages, to confirm a trend reversal
bearish candlestick patterns
3. Bearish candlestick patterns
Bearish candlestick patterns signal potential downtrends and often indicate selling pressure in the market. Here are some of the most common bearish candlestick patterns:
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| Crypto learning Bearish candlestick patterns |
1. Bearish Engulfing: This pattern occurs when a small green candle is followed by a larger red candle, which completely engulfs the previous one. It shows that sellers have overtaken buyers and suggests a trend reversal.
2. Shooting Star: The shooting star has a small body and a long upper shadow, with little to no lower shadow. It appears at the end of an uptrend and suggests that buyers attempted to push the price up but failed, which often leads to a bearish reversal.
3. Hanging Man: Similar to a hammer but appearing at the end of an uptrend, the hanging man has a small body with a long lower shadow. This pattern shows selling pressure and suggests a possible reversal if confirmed by a following bearish candle.
4. Dark Cloud Cover: This is a two-candle pattern where the first is a large green candle and the second is a red candle that opens above the high of the previous candle but closes below its midpoint. It indicates a shift in sentiment toward bearishness.
5. Evening Star: This three-candle pattern starts with a large green candle, followed by a small-bodied candle (which can be either red or green) that gaps above the previous candle, and then a large red candle that closes below the midpoint of the first. The evening star is a strong indicator of a bearish reversal.
6. Three Black Crows: This pattern involves three consecutive long red candles with short or no shadows, each opening within the previous candle's body and closing lower. It signifies sustained selling pressure and potential continuation of a downtrend.
7. Gravestone Doji: This pattern has no real body and a long upper shadow, with the open and close prices near the low of the day. It suggests that buyers tried to push prices higher but failed, often leading to a reversal in an uptrend.
Understanding these patterns can help traders anticipate potential downtrends, but it's essential to confirm signals with other indicators or patterns to avoid false moves.