4 Powerful Candlestick Patterns Every Trader Should Know

4 Powerful Candlestick Patterns Every Trader Should Know Image 6 1. hanging man. hanging man candlestick pattern emerges after an upward trend in prices and it signals potential topping behavior. in an uptrend, the hanging man will form consisting of just a single candle. it has a small real body at or near the top of the trading range, with a long lower shadow or “wick”. How to read candlestick patterns: 4 examples. the following section features four examples of the most powerful candlestick patterns that every crypto trader should know. you’ll get to see both bullish and bearish variants of candlestick patterns. by the end of this section, you should be able to trade cryptocurrencies much more effectively.

4 Powerful Candlestick Patterns Every Trader Should Know 4. the morning star: the morning star is a multiple candlestick chart pattern that is formed after a downtrend indicating a bullish reversal. it is made of 3 candlesticks, the first being a bearish candle, the second a doji and the third being a bullish candle. the first candle shows the continuation of the downtrend. Let’s take a look at four of the most widely used candlestick patterns along with some actual stock chart examples. the four patterns we’ll look at here are the bullish engulfing pattern, the bearish engulfing pattern, umbrella lines, and dojis. even if candlesticks aren’t your thing, almost everyone agrees the pattern names are vivid. What are candlestick patterns? candlestick patterns are a technical trading tool used for centuries to help predict price moments. each candlestick pattern has a distinct name and a traditional trading strategy. a picture is worth a thousand words, so let’s use a few to shine a light on candlesticks. Morning star. the morning star candlestick pattern is considered a sign of hope in a bleak market downtrend. it is a three candlestick pattern: one short bodied candle between a long red and a long green candle. traditionally, the ‘star’ will have no overlap with the longer bodies, as the market gaps both on open and close.