There are LOTS of reversal candlestick patterns which you can use to trade the forex market. That’s a fact.
And here’s the second fact: the more reversal candlesticks you have to learn to apply to trade, the more confusing your trading becomes.
So the real question is: do you really need to study and know every reversal bars, reversal candlesticks, reversal chart pattern etc to be a successful forex trader?
Short answer in my honest and humblest opinion: I don’t think so…no.
In here, I’m going to show you 10 candlestick patterns here, which are commonly occurring on the forex charts everyday in all timeframes. These can be easily incorporated in most forex trading strategies as a buy or sell signal.
Candlestick Patterns Are Classified Into Two Main Groups, Bearish Candlestick Patterns or Bullish Candlestick Patterns.
Let’s get started first with the bearish reversal bar (candlestick patterns).
#1: Bearish Engulfing Candlestick Pattern
A bearish engulfing candlestick pattern is a 2 candlestick formation pattern. As the names says, this is a bearish signal.
The first candlestick is a bullish candlestick and the second candlestick is bearish but overshadows the the first bullish candlestick.
An example is shown below.
Where Bearish Engulfing Patterns Form On A Chart
Bearish engulfing patterns can form in any timeframe from the 1 minute up the the monthly timeframe but it really does matter where this bearish engulfing pattern forms…
So in an uptrend, when price is heading up, you need to be aware of:
- resistance levels,
- a downward trendlines
- or a fib retracement level
- or a confluence of all the above 3.
These are the important spots or levels you should keep an eye out for the bearish engulfing pattern. Remember, this is a sell/bearish signal.
Personally, I don’t like to trade any bearish engulfing pattern that forms anywhere except based on the 4 conditions given above.
This applies to all the bearish reversal candlestick patterns I’m going to show you here in the next few pages.
Click the “Next” Button Below To Find Learn More About The other 9 Reversal Candlestick Patterns.