Bearish Patterns

Bearish candlestick patterns signal that sellers are taking control and prices are likely to fall.

A shooting star has a small body at the bottom of the candle with a long upper wick (at least twice the body length). It appears during an uptrend.

What it means: Buyers pushed prices higher during the session, but sellers stepped in and pushed prices back down to close near the open. The buying pressure was rejected.

Trading tip: A shooting star is more reliable when followed by a red candle confirming the reversal.

A two-candle pattern. First is a small green (bullish) candle. Second is a large red (bearish) candle that completely engulfs the first candle's body.

What it means: Sellers overwhelmed buyers. After an uptrend, this signals a strong potential reversal.

Trading tip: The larger the engulfing candle and the longer the uptrend, the more reliable the signal.

A three-candle pattern marking a major top: - First candle: long green (bullish) - Second candle: small body (indecision) - Third candle: long red (bearish) closing at least halfway down the first candle's body

What it means: Buying momentum exhausted, sellers have taken control.

Trading tip: The evening star is the bearish equivalent of the morning star and equally reliable.

A two-candle pattern. First is a long green body. Second is a small body (red or green) inside the first candle's body.

What it means: The uptrend is losing momentum. Small body shows indecision.

Trading tip: Wait for confirmation — the next candle closing lower than the harami.

Same shape as a hammer (small body, long lower wick) but appears during an uptrend.

What it means: Although the candle closed near its open, the long lower wick shows sellers tried to push price down. The uptrend may be weakening.

Pattern Recognition Tips

• Always look at the trend first. A pattern in isolation means nothing.
• Higher timeframe patterns matter more than lower timeframe patterns.
• Patterns at round numbers or previous support/resistance are more reliable.
• Combine patterns with trend lines for higher probability trades.

Common Mistakes

• Trading patterns without trend context
• Ignoring the wicks (wicks tell the real story)
• Taking every pattern as a signal
• Not waiting for confirmation on the next candle

In the next lesson, we will see how candlesticks reveal key support and resistance levels.