Candlestick patterns - there are lots of them. However, some are more commonly used by traders than others. Find out what they are and how to read them here 👇
Candlestick patterns can also be used in conjunction with support and resistance levels. Support levels are price levels where demand is expected to be strong, while resistance levels are price levels where supply is expected to be strong.A hammer is a candlestick with a long lower wick at the bottom of a downtrend, where the lower wick is at least twice the size of the body.
These candlesticks shouldn't have long lower wicks, which indicates that continuous buying pressure is driving the price higher. The size of the candlesticks and the length of the wicks can be interpreted as chances of a continuation or a possible retracement.A bullish harami is a long red candlestick followed by a smaller green candlestick that's completely contained within the body of the previous candlestick.
It indicates that the market reached a high, but then the sellers took control and drove the price back down. Some traders prefer to wait for the next few candlesticks to unfold to confirm the pattern.The three black crows consist of three consecutive red candlesticks that open within the body of the previous candle and close below the low of the last candle.
The continuation is confirmed by a green candle with a large body, indicating that the bulls are back in control of the direction of the trend.The inverse of the three rising methods, the three falling methods instead indicate the continuation of a downtrend.A doji forms when the open and close are the same . The price may move above and below the open but will eventually close at or near the open. As such, a doji can indicate a point of indecision between buying and selling forces.
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