Bearish candlestick patterns are patterns that indicate a potential reversal of an uptrend and the start of a downtrend. Here are some of the commonly recognized bearish candlestick patterns:
Shooting Star: This is a single candlestick pattern that forms when the price opens higher, rallies, but then closes near the open price. It has a long upper shadow and a small real body. The pattern indicates that buyers initially pushed the price higher but were eventually overwhelmed by sellers.
Hanging Man: The hanging man is similar to the shooting star but occurs after an uptrend. It has a small real body and a long lower shadow with no or a very small upper shadow. The pattern indicates that despite a higher open and a rally, sellers took control and pushed the price down.
Dark Cloud Cover: This is a two-candlestick pattern that forms when a bullish candle is followed by a bearish candle that opens higher but then closes below the halfway point of the previous candle. The pattern indicates that buyers initially pushed the price higher but then sellers took control and pushed the price lower.
Evening Star: This is a three-candlestick pattern that forms at the end of an uptrend. The first candle is a bullish candle, followed by a small candle with a gap up or down from the previous candle. The third candle is a bearish candle that closes below the midpoint of the first candle. The pattern indicates that buyers are losing control and a reversal may be imminent.
Three Black Crows: This is a three-candlestick pattern that forms after an uptrend. Each candle is bearish and opens lower than the previous day's close. The pattern indicates that sellers have taken control of the market and a reversal is likely.
These are just a few examples of bearish candlestick patterns. It's important to remember that candlestick patterns should be used in conjunction with other technical analysis tools to confirm signals and avoid false signals.
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