Each candle condenses four critical data points — the open, high, low, and close — into a single visual symbol. This makes candlestick charts easier to interpret than simple line charts, which only show closing prices. The Triple Top Candlestick Pattern is a bearish reversal pattern included in various candlestick patterns types. It indicates indecision in the market, with both buyers and sellers unable to gain the upper hand. When it appears after a downtrend, it suggests that selling pressure is weakening and that a bullish reversal may be imminent.

Types of Candlestick Patterns

Since then, candlestick chart patterns have become a cornerstone of technical analysis in global financial markets. The Rounding Top Candlestick Pattern is a bearish reversal formation found in various candlestick patterns types. A tweezer top candlestick pattern is a bearish reversal pattern formed by two candlesticks with matching highs. The three-inside-down candlestick pattern is a bearish reversal signal formed by three candlesticks. The bullish counterattack pattern consists of a bearish candlestick followed by a bullish candlestick that opens lower but closes at the same level as the previous candlestick’s close. The three-inside-up candlestick pattern is a bullish reversal signal formed by three candlesticks.

For day traders, identifying this pattern can provide an early entry into a new, powerful momentum move, as it shows one side of the market has been completely overwhelmed by the other. The Hammer and its counterpart, the Inverted Hammer, are powerful single-candle reversal patterns. The Advance Block candlestick is another bearish reversal pattern that appears during an uptrend, consisting of three consecutive bullish candles. The bearish abandoned baby is a three-candlestick pattern indicating a reversal. It consists of a long bullish candlestick, a doji that gaps up, and a long bearish candlestick that gaps down.

Bearish Harami Candlestick Pattern

• When combined with confirmation and discipline, reversal and continuation patterns can deliver consistent results across any market.
• To deepen your skills, you can learn more about how to read trading charts to interpret these signals with greater accuracy.
• Markets are not just numbers; they are living reflections of crowd psychology.
• Spinning Tops indicate indecision on the part of traders and can indicate a trend reversal or consolidation.

The Shooting Star candle pattern achieved an overall success rate of 57.1% and returned an average gain of 0.56% with a reward/risk ratio of 1.11. With a solid reward/risk ratio of 1.11, this supposedly bearish pattern is strongly bullish. The Gravestone Doji candlestick pattern takes shape when a trading session’s opening, closing, and low prices are almost identical.

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The Inverted Hammer is the most profitable pattern, generating a remarkable 1.12% profit per trade. The piercing pattern is a two-candlestick configuration, and it is a sign of a probable bullish reversal. It occurs when a bearish candle is followed by a bullish one with an opening below but closing price at a level over the midpoint of the previous bearish candle.

Bearish Harami Cross: 57% Win Rate

• To trade it, enter below the third candle’s low, with stops above the first candle’s high.
• Candles (the terms “candles” and “candlesticks” are used interchangeably) are often colored to indicate whether it indicates an up move or a down move.
• The best use of the pattern is when it occurs with increased trading volumes.
• This indicates that sellers have countered the buying pressure, potentially leading to a reversal.

Incorporating candlestick patterns like the Harami requires discipline and a solid framework. To protect your capital while trading these setups, it’s vital to explore effective trading risk management strategies on colibritrader.com. If a bullish candlestick pattern forms when the RSI is below 30 (indicating an oversold condition), it could signal a more powerful reversal to the upside. Many traders prefer candlestick charts because they are visually more intuitive and provide clearer signals of market trends and potential reversals.

A Bullish Harami pattern is a two-candlestick chart pattern that signifies the end of a bearish trend and the potential onset of a bullish trend. The first candlestick will often be a bearish bar, indicating that the market has dropped significantly during that period. The second candle is bullish, indicating buyers have stepped in and pushed prices back up from their earlier lows. The Bearish Harami Cross pattern is a two-candlestick chart pattern that supposedly signifies the end of a bullish trend and the potential onset of a bearish trend.

Candlestick patterns are an essential component of the market’s technical analysis every trader should do. They generally separate into bullish (increasing) and bearish (decreasing) candlesticks. I’m Chaitali Sethi — a seasoned financial writer and strategist specializing in Forex trading, market behavior, and trader psychology. With a deep understanding of global markets and economic trends, I simplify complex financial concepts into clear, actionable insights that empower traders at every level. Whether it’s dissecting winning strategies, breaking down market sentiment, or helping traders build the right mindset, my content bridges the gap between information and implementation.

Liberated Stock Trader, founded in 2009, is committed to providing unbiased investing education through high-quality courses and books. We perform original research and testing on charts, indicators, patterns, strategies, and tools. Our strategic partnerships with trusted companies support our mission to empower self-directed investors while sustaining our business operations. A well-known example occurred with Bitcoin in 2024, when it printed a bearish top-4 best candlestick patterns for 2025 engulfing at $68,000.

The Unique Three Rivers pattern is a bullish reversal signal that forms after a downtrend, indicating that the market might be ready to turn upward. A tweezer bottom is a bullish reversal pattern formed by two candlesticks with matching lows. The piercing line candlestick pattern is a two-candlestick formation signaling a potential bullish reversal.

However, the profit margins are slim with candlestick patterns because they are only predictive for a maximum of 10 days. Each of these ten reliable and profitable chart patterns has a greater than 50% chance of success and an average profit potential of 0.51% per trade. After conducting 4,096 trades on 568 years of data, we confirm the Bearish Engulfing profit per trade to be 0.62%. A 0.62% win rate means trading a Bearish Engulfing long will net you an average of 0.62% profit per trade if you sell after ten days. Conversely, short-selling a Bearish Engulfing will result in a loss of -0.62% per trade.

Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative. Whenever calculating your position, utilize your stop-loss positioning and your tolerance for taking a loss in terms of your overall tolerance for taking a loss in general. In taking such an approach, no position jeopardizes your overall capital risk.

This pattern shows a significant shift in market sentiment from bearish to bullish. The three white soldiers pattern consists of three consecutive long bullish candlesticks with small or no wicks. Three-candle pattern signaling bearish reversal; first bullish, second inside, third bearish. Complex pattern with multiple candles showing bullish reversal after downtrend. Two-candle pattern where the second candle opens lower and closes above the midpoint of the first candle, signaling bullish reversal.

Doji with a high-volume candle can represent a strong reversal sign, especially when appearing at a strong price level. In a similar manner, a Dark Cloud Cover with an increase in volumes can mean a strong bearish reversal. It is a signal of a strong buying move to selling and a possible downtrend reversal. Staying informed of the potential market movements is the key to a trader’s success and in most cases, market knowledge translates into knowing the potential patterns and trading tricks. Also called “candlestick patterns”, those are the forecasted movements of the market, based on its course so far. Candlestick patterns every trader must know are not magic formulas, but when paired with proper context, they become highly reliable tools.