After we understood the shapes of candles ๐
Now we need to understand something important:
๐ Not every candle alone is sufficient
๐ Sometimes we need to look at more than one candle together
And this is where:
๐ฅ Candle Patterns (Patterns)
๐ด First: Patterns indicating that the price may revert (reverse direction)
๐ฏ๏ธ 1. Engulfing Pattern
Shape:
Two candles:
the first is small
the second is large and completely covers it
Meaning:
If the price was dropping ๐
And a large bullish candle appeared
๐ Buyers are in control โ the price might rise ๐
If the price was rising ๐
And a large bearish candle appeared
๐ Sellers are in control โ the price might drop โ
๐ Example:
The price is down and reached a bottom โ a large candle appeared covering the previous one
๐ Possible start of an upward trend
๐ฏ๏ธ 2. Morning Star pattern
Shape:
3 candles:
Bearish candle
Small candle (indecision)
Strong bullish candle
Location:
At the bottom of the chart
Meaning:
The market was dropping... stopped... and then started to rise
๐ Possible rise ๐
๐ฏ๏ธ 3. Evening Star pattern
Shape:
3 candles:
Bullish candle
Small candle
Strong bearish candle
Location:
At the peak of the chart
Meaning:
The market was rising... stopped... and then started to drop
๐ Possible drop ๐
๐ข Secondly: Patterns indicate that the price might continue in the same direction
๐ฏ๏ธ 1. Three White Soldiers pattern
Shape:
3 consecutive bullish candles
Meaning:
Buyers are strongly in control ๐ช
๐ The price is likely to continue rising
๐ It's best to see it after the start of an upward movement
๐ฏ๏ธ 2. Three Black Crows pattern
Shape:
3 consecutive bearish candles
Meaning:
Sellers are in control ๐
๐ The price is likely to continue dropping
โ ๏ธ Most important point (focus here well)
โ The same pattern can fail if it is in the wrong location
Example:
Morning Star at the bottom โ Strong โ
The same pattern in the middle of the chart โ weak โ
๐ It means:
The location on the chart is more important than the pattern itself!
๐ง Tips for beginners
Do not memorize patterns without understanding โ
See them on the real chart
Focus: Peak or bottom? ๐
Apply it yourself on Binance
๐ฏ Summary
In patterns that tell you: the price might return ๐
And in patterns that tell you: the price might continue โก๏ธ
๐ The location is fundamental in everything๐
๐ฅ In the next article:
We will enter the peaks and troughs ๐๏ธ
And here... you start to see the market through the eyes of a 'real trader', not a beginner ๐
#ุฏุนู _ุงูู ุญุชูู_ุงูุนุฑุจู
