Reversal Candlestick Patterns (1)

[Kingstone]

As a candlestick trader, understanding the chart with the help of candlesticks has helped me a lot to know when to enter and exit a trade. I do believe that candles do not lie and they represent how the market really is. Still, no pattern is 100 percent true. Not candles, not indicators, not loving averages can predict the actual price the market will take. However, here are some of the reversal patterns I look forward to when placing a trade (buy or sell).

1. Bearish engulfing pattern: A bearish engulfing pattern is a bearish pattern that occurs in an uptrend. It signals that the bulls have taken the price up for long and are already losing grip on the market as sellers are setting in. It is a pattern formed by two candlesticks; a short bullish candle followed by a long bearish candle that must enclose the bullish candle by at least 50%. Some do take the trade of it covering less than 50% but I do not. It is too risky.

2. The Hammer: The hammer is a bullish signal that occurs in a downtrend. Buyers are ready to push the price back up after a bearish move. It is a single candlestick pattern, unlike the bearish engulfing pattern. It is believed that a single reversal candle is stronger than two or three candlestick reversal patterns (just a thought). It has the shape of a hammer. A small body followed by a long lower wick or called shadow or tail. Interestingly, this can have any color; green or red but it must occur in a downtrend to signify a bullish reversal.

 

[ojo2021]

Reversal candlestick formation are price actions strategy to decide when to take a trade on not. Bullish and bearish engulfing candles are powerful. If you can learn major candlestick patterns, it will really help you in trading.

 

[Setho]

There are some certain characteristics of things that might happen in the market that might be subjective of making a decision if price is going to reverse from the original trend that is already in place. For example whenever you have a candlestick whereby it is having a very big top body and a long week it means that there are more buyers than people who are selling and as such every supply was immediately demanded and taking up. This is a clear sign that the market is about to pump from a bearish market to a full-blown bull market.

 

[sincerem]

When signals at the downtrend, it means the indicators are simply going bearish and not bullish dearie. It will only color greenish, before you said it is going bullish. The red arrow or indicator, signals bearish trend, it shows that the market is collapsing and not moving at the bullish line. When you place your trade, it will simply show bearish, that's mostly how it affects each trade you place trading either, Futures or spot via any exchange site. You can also study the market using the indicators via coingecko, they have the mechanics, the right tools to show you the real market statistics of all coins even in the last one month and their about.