BEST CANDLESTICK PATTERNS

1 Dis 2021

Combinations confirming the reversal of the "bearish trend"

1. Inverted hammer and combinations of hammers. The hammer has a large shadow under the small green body, and the inverted hammer has a large shadow over the small red body. It appears, like all subsequent combinations, at the base of the downtrend, before the reversal.

2. "Bullish harami" consists of two candles: the first with a long red body, which covers the second with a short green body. A distinctive feature is that this model assumes a price gap. The fact is that "harami" in Japanese means pregnant, so if you look closely at the drawing, you will see that the body of the right candle is, as it were, inside the body of the left candle.

3. Short candles in the "star position". A "star" is a candle with a fairly small body, formed after the break with the closing of the previous candle, usually having a large body. Therefore, in this model, the candle should appear at the bottom of the downtrend, have a short body and open with a break down compared to the previous candle. The third red candle with a short body should close above the first candle.

4. "The morning star in the position of three candles." Here, the first candle should be red, which indicates a strong downward movement, the second has a short body and is formed with a gap relative to the first candle, and the third candle is necessarily green, the price of which has increased to at least a value at the level of half the body of the first candle. Ideally, the morning star should have a gap before and after the second candle, but the gap between the second and third candles is rare.

5. A short candle in the "harami" position. This combination is similar to the "bullish harami" that we described earlier, only in this case the second candle is short and red, but it is also located in the body of the first candle. The third candle is necessarily green.

Combinations confirming the reversal of the "bullish trend"

6. "Bearish harami" is the same as "bullish harami", only a long green body should appear first, and a short red body should appear second, and the body of the right candle is absorbed by the body of the first candle. The next candles go out.

7. "Bearish absorption". Here, the first is a short green candle, and the second is a long red one, and if you look, the body of the left candle is inside the body of the right candle. After that, the price decreases.

8. "Shooting star" is a short candle with a missing lower shadow and a very long upper one.

9. The bear cross "harami" is formed when the first candle is long and green, and the second candle ("child") is a "doji".

10. "A three-line star in thought" or in another way "the repulsed offensive of three white soldiers". This combination reflects a gradual steady increase in prices and consists of three candles, the opening price of each of which is located inside or near the previous green body. The closing price of candles is equal to or approaching the maximum prices. If the second and third candles (or only the third candle) show signs of weakening, that is, their bodies gradually decrease or relatively long upper shadows form, then the "repulsed offensive of three white soldiers" model is formed. This pattern should cause particular alarm if it appears after a long uptrend.