1. Doji candlestick pattern

A Doji candlestick pattern is a candlestick pattern formed in a fairly small range, with the opening price equal to the closing price. Doji candles often signal market indecision. It shows that the current trend is slowing down, which could be a sideways signal or an end of the trend in near future. The dragonfly doji could signal the end of the downtrend, and the gravestone doji could signal the end of the uptrend.

2. The Abandoned Baby

This is a three-candle reversal pattern as shown below. During an uptrend, it can help identify the top of a trend, and during a downtrend, it can help us identify a trend bottom.

The first candle is the one that moves strongly in the direction of the current trend, the middle candle is smaller and there is a gap formed with the first candle, the third candle is the inner reversal candle. accompanied by a gap with the second candle.

3. Engulfing

An engulfing candlestick pattern is a pattern of two consecutive reversing candles that can signal a reversal of the current trend on the chart. The figure below shows the engulfing candlestick pattern:

The range of the second candle completely engulfs the range of the first candle indicating a failure to either push the price higher during an uptrend or push the price lower in a downtrend.

4. Hammer

A hammer candle is a candlestick pattern that can signal a bottom in a downtrend when a new bottom is rejected and the close of a candle is much higher than the low of the day.

Hammer candles usually have a small real body, with little or no upper tail and long lower bottom creating a new bottom but eventually reversing strongly.

5. Hanging Man

Hanging man is a bearish reversal candlestick pattern in an uptrend (as opposed to a hammer candle). As shown below:

This pattern usually occurs during an uptrend, it can signal a potential reversal or a sideways trend. This candlestick pattern is better used if it is combined with other technical indicators or other trading techniques such as supportive resistance or oversold signals on technical indicators.

6. Harami candlestick pattern

The harami pattern is a 2-candle reversal pattern. This pattern signals the end of a trend, the market might go sideways before a real reversal. As shown below:

The harami pattern has a higher probability of success if the chart shows overbought effects occur.

7. Shooting Star

A shooting star pattern usually occurs during a strong uptrend. Begin to open at this candle, the price is pushed up strongly, but then reverses back and eventually closes at the price below the high of the day or closes close to the opening price or below there.

The larger the upper end of the candle indicates a rejection of buyers pushing the price up. The shooting star candlestick pattern is one of the bearish reversal candlestick patterns, indicating an end of an uptrend and a high possibility of forming a new downtrend.

These are the main candlestick patterns that traders need to keep in mind to analyze trends as well as find opportunities to trade.

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