TA Challenge: Can you spot the six common bearish candlestick patterns?
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As is widely acknowledged, market fluctuations can result in downturns, underscoring the significance of promptly mitigating losses by means of effective stop-loss strategies. Today, we will delve into six bearish candlestick patterns to help you gain proficiency in interpreting stop-loss signals. Let's go! ![]()
Hanging man & Shooting star
The hanging man pattern is considered the bearish counterpart of a hammer, sharing its shape while emerging at the conclusion of an uptrend. This pattern signals a substantial sell-off during the day, but with buyers subsequently driving prices back up. The sell-off is widely interpreted that the bulls are relinquishing their hold on the market.
In contrast, the shooting star pattern exhibits an inverted hammer formation and manifests during an uptrend. Typically, the market briefly opens with a slight upward gap and rallies toward an intraday peak before settling at a price marginally above the opening price, resembling a falling star.
Bearish engulfing
The bearish engulfing pattern materializes at the conclusion of an uptrend, with a small green-bodied first candle being entirely overwhelmed by a subsequent long red candle. This pattern signifies either a price peak or deceleration in movement, often suggestive of an imminent market downturn. The magnitude of the ensuing trend can be gauged by the extent to which the second candle descends.
Three black crows
The three black crows pattern features three successive long red candles with short or nonexistent wicks, opening at comparable prices to the previous day but steadily declining with each close due to mounting selling pressures. This pattern is often viewed by traders as a start to a bearish downtrend because sellers have dominated buyers across three consecutive trading sessions.
Evening star
Like the bullish morning star, the evening star pattern consists of three candlesticks that signal an impending bearish reversal. The evening star pattern consists of three candlesticks:
- A long green candlestick
- A small green or red candlestick that gaps above the close (body) of the previous candlestick
- A long red candlestick
It indicates the reversal of an uptrend and is particularly strong when the third candlestick erases the gains of the first candle.
Dark cloud cover
The dark cloud cover pattern is a bearish reversal signal, casting a red cloud over prior optimism. This formation consists of two candlesticks: a red candlestick that opens above the preceding green body and concludes under its midpoint. The pattern implies that bears have claimed the session, propelling prices markedly lower. Short wicks on both candles suggest an especially decisive downtrend.
Let's discuss
Which bearish candlestick pattern do you consider the most valuable in trading and why? Share your thoughts with other traders and seize the opportunity to win a $1 cash reward!
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Disclaimer:
This presentation discusses technical analysis. Other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.
This presentation is for information and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Before investing, please consult a licensed professional. See this link for more information.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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heeman : i consider shooting star as the most valuable bearish candlestick pattern in trading.
It indicated that an attempt to close at a higher price was rejected and a potential reversal might be coming
LegendaryKow heeman : three black crows
Lucky Bird : I always take 3 Black crow as a buy signal
CSChern : Shooting star pattern is a good signal to the traders to identify the bearish trend.
peishan97 : Bearish engulfing, as it shows the trend of the potential direction of the slowdown.
Jungle lee : I love bearish engulfing pattern the most, because once it appears, awyz gv me the signal to sold it or buy it.
Thy GoD : Shooting star, it's too iconic and easy to follow.
73724465 : shooting star.
Billionaire Farmer : Bearish Engulfing FTW
Eat Drink Earl Grey : shooting star, easily identifiable
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