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Bearish Reversal Patterns: Essential Candlestick Signals Every Trader Should Know
In trading, recognizing bearish reversal patterns is crucial for identifying potential trend changes and protecting profits. These patterns help traders spot shifts in market sentiment from bullish to bearish, allowing them to exit long positions or enter short trades at the right time.
This guide covers six powerful bearish reversal patterns that signal a potential market downturn:
- Shooting Star – A small body with a long upper wick, appearing after an uptrend.
- Bearish Engulfing – A large red candle completely engulfs the previous green candle, showing strong selling pressure.
- Evening Star – A three-candle pattern indicating a transition from bullish to bearish sentiment.
- Dark Cloud Cover – A bearish candle that opens above the previous green candle but closes below its midpoint.
- Tweezer Top – Two candles with equal highs, indicating strong resistance.
- Three Black Crows – Three consecutive strong red candles signaling a bearish reversal.
By the end of this article, you’ll understand how to identify, confirm, and trade these bearish reversal patterns effectively.
1. Shooting Star: A Warning Sign for Bulls
What is a Shooting Star?
The Shooting Star is a single-candle bearish reversal pattern that appears at the top of an uptrend. It has:✔ A small real body near the low of the candle.✔ A long upper wick (at least twice the size of the body), showing rejection of higher prices.✔ Little or no lower wick, indicating that sellers gained control by the close.
blog.revold.us/bearish-reversal-patterns-essential-candle...
Bearish Reversal Patterns: Essential Candlestick Signals Every Trader Should Know
In trading, recognizing bearish reversal patterns is crucial for identifying potential trend changes and protecting profits. These patterns help traders spot shifts in market sentiment from bullish to bearish, allowing them to exit long positions or enter short trades at the right time.
This guide covers six powerful bearish reversal patterns that signal a potential market downturn:
- Shooting Star – A small body with a long upper wick, appearing after an uptrend.
- Bearish Engulfing – A large red candle completely engulfs the previous green candle, showing strong selling pressure.
- Evening Star – A three-candle pattern indicating a transition from bullish to bearish sentiment.
- Dark Cloud Cover – A bearish candle that opens above the previous green candle but closes below its midpoint.
- Tweezer Top – Two candles with equal highs, indicating strong resistance.
- Three Black Crows – Three consecutive strong red candles signaling a bearish reversal.
By the end of this article, you’ll understand how to identify, confirm, and trade these bearish reversal patterns effectively.
1. Shooting Star: A Warning Sign for Bulls
What is a Shooting Star?
The Shooting Star is a single-candle bearish reversal pattern that appears at the top of an uptrend. It has:✔ A small real body near the low of the candle.✔ A long upper wick (at least twice the size of the body), showing rejection of higher prices.✔ Little or no lower wick, indicating that sellers gained control by the close.
blog.revold.us/bearish-reversal-patterns-essential-candle...