Candlestick Patterns for Trading Cryptos & Stocks Part 2

Sepehr Vafaei

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There are three types of patterns:

  • Continuation: The current trend continues.
  • Reversal: The direction will reverse.
  • Neutral: Nothing considerable happens.

All the patterns discussed in this part are reversal patterns.

If the pictures are not working on the phone or you can't see the whole picture due to problems like being zoomed in, then please read this article on your laptop, tablet, or desktop computer.

Bullish Engulfing

When a green candle comes after a red candle and engulfs its range.

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Bearish Engulfing

The opposite of bullish engulfing happens.

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Bullish and bearish engulfing are used alongside other factors when detecting reversal patterns. A reversal pattern indicates a possible change in the trend.

A bullish reversal pattern indicates the start of an upward trend. A bearish pattern indicates the start of a downward trend.

Bullish patterns indicate buyers are either in control or taking it.

Bearish patterns indicate sellers are either in control or taking it.

Bullish Harami

Harami in Japanese means pregnant. It is a bullish reversal pattern.

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Bearish Harami

It is a bearish reversal pattern.

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Bullish Harami Cross

It is a bullish reversal pattern. This pattern signals the start of an uptrend. The second candlestick in his pattern is a Doji Cross which itself alone is not considered bullish but also a bearish candlestick.

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Bearish Harami Cross

The mirror image of the previous pattern. This signals the start of the downtrend.

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Bullish Kicking

A red candlestick followed by a green one and there is a gap up.

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Bearish kicking

A green candlestick followed by a red one and there is a gap up.

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Bullish Two Soldiers

Two successive green candlesticks with a usually small body. It signals strongly the possible start of an uptrend.

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Bearish Two Crows

Two successive red candlesticks with a usually small body. It signals strongly the possible start of a downtrend.

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The rest of the patterns in this part consist of three candlesticks.

Morning Star

A Red candlestick followed by two green candlesticks like in the image. The third candle covers at least %50 of the first candle.

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Evening Star

A Green candlestick followed by two red candlesticks like in the image. The third candle covers at least %50 of the first candle.

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Morning Doji Star

Like morning star but the second candlestick is Doji. It is considered a weaker signal than a morning star pattern.

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Evening Doji Star

Like evening star but the second candlestick is Doji. It is considered a weaker signal than an evening star pattern.

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Three White Soldiers

It is a bullish reversal pattern. Three consecutive green candles. Each candle has usually a small body. usually, there is a big green candle after this pattern. Usually, this pattern happens when the price is going down but the reversal is starting.

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Three Black Crows

It is a bearish reversal pattern. Three consecutive red candles. Each candle has usually a small body. Usually, there is a big red candle after this pattern. Usually, this pattern happens when the price is going up but the reversal is starting.

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