A bearish reversal pattern happens during an uptrend and indicates that the trend may reverse and the price may start falling. Here is a quick review of most famous bearish reversal candlestick patterns in technical analysis.
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Bearish Reversal Candle Arrangements
Evening Star (Bearish Reversal)
As the name suggests, the evening star projects an opposite signal from that of the morning star. It is a bearish candle reversal pattern made up of three candles. It twinkles after an uptrend, and it signals that the price may fall.
Shooting Star (Bearish Reversal)
Interestingly enough, shooting stars on a forex dance floor are not bright! Their small, bearish bodies are filled with a darker color to indicate that the price fell a little bit during their formation time frames
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But they do leave a long trail (shadow) on the peak of an uptrend, which make us feel that they look like shooting stars.
Bearish Reversal Candlestick Pattern – Shooting Star
A shooting star indicates that a reversal in the pattern may be due, and that we could expect the price of the currency pair to fall.
Hanging Man (Bearish Reversal)
Oops, it seems like somebody made a mistake! Hopefully, as our beloved Lady Gaga put it, this man is “hanging on a moment of truth”. It could be the last method to get your guy and his dirty clothes clean.
Bearish Reversal Candlestick Pattern – Hanging ManThe hanging man looks a lot like the shooting star. It happens during an uptrend, and it is a bearish reversal signal. However, its long shadow is on its bottom.(See figure below)
Bearish Engulfing (Famous Bearish Reversal)
The bearish engulfing pattern is the opposite of the bullish pattern. It happens during an uptrend. A small bullish candle is followed by a big bearish one, and the big bearish candle is big enough to eat up the small one.(See figure below)
Bearish Reversal Candlestick Pattern – Bearish Engulfing
Bearish Harami (Not- S0 -Famous Bearish Reversal)
Quiz: Do you remember what harami means in Japanese?
If you answered “the belly of a pregnant lady,” you deserve a California-style salmon harami roll for dinner tonight. The bearish harami is the opposite of the bullish one. It is a bearish reversal signal during an uptrend, and it looks like this:
That’s all you need to know about the romantic (and sometimes nonromantic) candle patterns. Just keep your eyes open for the formation of these patterns while checking for other signals that you have learned so far or that you are going to learn from now on.
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Fake Forex Party Time
On your free demo account, look for each of the candle patterns that you learned about in this chapter, whether it is something that has formed in the past or something that is in the process of forming right now. If you are a Windows user, use the snipping tool to snip out a photo of the patterns as you find then. Copy all the patterns and paste them into a Word document with their names written beneath them. Print out the page and hang it from your fridge or above your mirror so that you can review the patterns every day.
Related:
- Bullish Reversal Candle Arrangements
- Hammer Doji – Bullish Reversal Candlestick Patterns
- Ichimoku Kinko Hyo- What’s Best Time Frame to Use it?
