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Ultimate Candlestick Pattern Guide

The document provides a comprehensive guide to candlestick patterns, detailing bullish, bearish, and continuation patterns with explanations and examples. It also includes trading strategy tips such as using indicators, considering support and resistance, and confirming signals with volume. Key patterns highlighted include Hammer, Shooting Star, and Rising Three Methods, each indicating potential market reversals or continuations.

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nyakwebadavid28
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43 views2 pages

Ultimate Candlestick Pattern Guide

The document provides a comprehensive guide to candlestick patterns, detailing bullish, bearish, and continuation patterns with explanations and examples. It also includes trading strategy tips such as using indicators, considering support and resistance, and confirming signals with volume. Key patterns highlighted include Hammer, Shooting Star, and Rising Three Methods, each indicating potential market reversals or continuations.

Uploaded by

nyakwebadavid28
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Ultimate Candlestick Pattern Guide

A clean and modern reference for the most important candlestick patterns, including real
chart examples, explanations, and strategy insights.

Bullish Reversal Patterns

Pattern Explanation

Hammer Small body, long lower wick — signals buyers reversing a downtrend.
Bullish Engulfing A small red candle followed by a large green one — buyers overpower sellers.
Morning Star Three-candle pattern showing shift from bearish to bullish control.
Piercing Pattern Green candle closes above the midpoint of prior red candle — reversal sign.
Dragonfly Doji Long lower shadow, open/close near top — buyers regained control.

Bearish Reversal Patterns

Pattern Explanation

Shooting Star Small body, long upper wick — sellers pushing back after uptrend.
Bearish Engulfing Large red candle engulfs smaller green — sellers dominate.
Evening Star Opposite of Morning Star — signals top reversal.
Dark Cloud Cover Red candle closes below midpoint of previous green — bearish reversal.
Gravestone Doji Long upper shadow — failure of bulls at resistance.

Continuation Patterns

Pattern Explanation

Rising Three Methods Temporary pullback within an uptrend before continuation upward.
Falling Three Methods Pause in downtrend before continuation lower.
Doji Indecision candle — continuation or reversal depending on context.
Spinning Top Small body with wicks — consolidation or hesitation in current trend.

Trading Strategy Tips

Pattern Explanation

Combine with Indicators Use RSI (<30 for bullish, >70 for bearish) and moving averages for confirmation.
Support & Resistance Patterns near key zones are stronger and more reliable.
Volume Confirmation Increased volume strengthens reversal signals.
Avoid False Signals Always wait for confirmation candle before entering trades.

Quick Summary

Type Pattern Key Signal


Bullish Hammer Reversal up
Bullish Bullish Engulfing Buyers overpower sellers
Bearish Shooting Star Reversal down
Bearish Bearish Engulfing Sellers overpower buyers
Continuation Rising Three Methods Uptrend continuation
Continuation Falling Three Methods Downtrend continuation

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