The Most Common Candlestick Patterns

What we want to do right now is to help you understand the most common Candlestick patterns out there. candle stick patterns make for a great trading aid that will help you place the right trades at the right times, but you do of course need to be able to read them. Let’s take a look at some of the most common examples right now.

Five Bullish Candlestick Patterns

First off, but take a look at the five most common bullish candle stick patterns out there. Keep in mind that a bullish candlestick pattern signifies that there is a trend reversal on the horizon, and moreover it signifies that prices will go from a downtrend into an upward trend. Remember folks, bullish means that the market prices are set to increase.

The Hammer

Common bullish candle stick pattern that you will ever encounter is called the hammer. The hammer features a green candle that has a very short body and a long lower wick. this hammer pattern is most often found at the bottom of a downtrend, with other green candles usually following suit. A hammer usually indicates that there was strong selling pressure throughout the day, but strong buying pressure drove the price back up.

Candlestick Patterns

The Inverted Hammer

This is a similar bullish candlestick pattern to the previous one, with this one being the inverted hammer, and this one sees a green candle with a very short body and along upper Wick. This is combined with a short lower Wick. The inverted or inverse hammer pattern usually always indicates that there is strong buying pressure that is then followed by selling pressure, but the selling pressure wasn’t quite strong enough to drive the market price back down. It indicates that buyers will soon have control of the market.

Inverted Hammer

The Piercing Line

This particular candlestick pattern is a simple one that features just two candles. The piercing line candle stick pattern is made out out of one long red candle that is followed by a long green candle. The defining characteristic of this piercing line pattern is that there is usually always a large gap between the closing price of the first candle stick and the opening price of the second candlestick. This generally indicates that there is strong buying pressure because the price is being up pushed upwards to or above the mid price point of the previous day.

Piercing Line

Bullish Engulfing

Yet another very common bullish candle stick pattern that you need to know about is known as bullish engulfing. here you will see 2 candlesticks, with the first one usually being a red one with a short body, which is then completely engulfed by a larger green candle. The second day usually opens lower than the first day, but the bullish market then pushes the price upwards.

Candlestick Patterns

Three White Soldiers

The 5th and final of the bullish candlestick patterns that we want to take a look at is known as the three white soldiers. This particular candle stick pattern consists of three very long green candles, and they all have very small wicks. These candles all close progressively higher than on the previous day, and it is therefore an extremely strong bullish candle stick pattern that generally occurs after a downtrend. This indicates that there is a steady advance of buying pressure.

Three White Soldiers Pattern


Five Bearish Candlestick Patterns

Now that you know what the five most common bullish candlestick patterns are, let’s take a look at the five most common bearish candle stick patterns. Remember that these are patterns that generally occur at the end of an uptrend, and signify that a downtrend in market prices is on the horizon.

The Hanging Man

The first of the bearish candlestick patterns is known as the hanging man. This candle stick pattern is the same shape as the hammer but it generally forms at the end of an uptrend. this is a pattern that signifies that there was significant selling during the day, but that buyers were then able to push the price back upwards. this sell off during the day is seen as a sign that the bulls are losing control of the market.

The Evening Star

Another one of the most common bearish candlestick patterns that you will encounter is known as the evening star. This is a Candlestick pattern that consists of three separate candles. This particular pattern forms when there is a short handle that is stuck in between a long green candle and a large red candle. This usually indicates that there is a reversal of the current uptrend that is likely to occur. this pattern is particularly strong when the third candle erases all of the gains made by the first candle.

Bearish Engulfing

Bearish engulfing is another one of the most common candle stick patterns out there. This candle stick pattern happens at the end of an uptrend, and it is generally characterized by a candle that has a small green body which is then completely engulfed by a much larger red candle. This generally signifies that there is a peak or a slowdown of price movement, and that’s a downturn is on the horizon. The lower the second candle is, the stronger the new downtrend is likely to be.

Candlestick Patterns

Dark Cloud Cover

The dark cloud cover Candlestick pattern is yet another bearish one that signifies that a market downtrend is on the horizon. Here you will see two different candle sticks, one of which is red and it opens up above the previous green body. This candle closes below the midpoint of the previous green candle. It’s a strong signal that the bears have taken over the market and that the price is being pushed lower.

Three Black Crows

The 5th and final candlestick pattern that we want to look at is the three black crows pattern. Where you’ll see three consecutive long red candles. They all have either no wicks at all or very short wicks. The previous day, but pressure from the sellers then always pushes the prices lower and lower which each of the closes. This is a very strong sign that a bearish downtrend is going to start.

Candlestick Patterns | Three Black Crows


The Bottom Line on Candlesticks

There you have it folks in the five most common bearish candlestick patterns and the five most common bullish candlestick patterns. Remember that there are of course dozens more, but those are the most common ones that you need to be familiar with.

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