CANDLESTICK PATTERNS – READING PRICE PSYCHOLOGY IN JUST 1 IMAGE
This image summarizes 4 classic candlestick patterns that every trader should know:
🔹 Hammer
– Appears after a downtrend
– Long lower shadow → sellers are rejected
– Indicates a potential bullish reversal
🔹 Shooting Star
– Appears after an uptrend
– Long upper shadow → buyers are exhausted
– Warns of a potential bearish reversal
🔹 Bullish Engulfing
– Bullish candle “completely engulfs” the previous bearish candle
– Shows that buyers are taking control
– Buy signal in line with the trend
🔹 Bearish Engulfing
– Bearish candle “completely engulfs” the previous bullish candle
– Sellers are completely dominant
– Sell / take profit signal
⚠️ EFFECTIVE USAGE (VERY IMPORTANT)
❌ Do not use single candles to enter trades
✅ Combine with:
- Trend
- Support / resistance
- Market structure
- Volume or news timing
📌 Candlestick patterns = confirmation signals, not the “holy grail"
