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Technical analysis guide

Engulfing & Pinbar Candlestick Pattern

Big Idea: After understanding how to read a candle and its movement or behavior throughout the day, traders can look for a series of individual candles to help them gauge what the charts are telling them.
Candlestick Engulfing Pattern, technical analysis guide
Image 1: Engulfing Patterns

Engulfing Patterns

Image 1 displays both a bullish engulfing pattern and a bearish engulfing pattern. When a large green candle is formed to the right of a smaller red one, it is called a bullish engulfing candle as the green candle engulfs the red candle. A bullish engulfing candle signifies that buyers may have stepped in with majority control of the market. 

When a large red candle to the right of a smaller green candle it shows that there may be some weakness in the market, and sellers may step in. This is called a bearish engulfing candle.
Candlestick Pinbar Reversal Pattern, technical analysis guide
Image 2: Pinbar Reversal Pattern

Pinbar Reversal Pattern

Image 2 shows bullish and bearish reversal pinbars.

The green pinbar, or "Bullish Reversal Pinbar", suggests that there will be a reversal to the upside as price rejects the lows. 

The red pinbar, or "Bearish Reversal Pinbar", suggests that price was rejected at the highs and may be ready to start a reversal to the downside.
Candlestick Pattern- 3 White Soldiers 3 black crows, technical analysis guide
Image 3: 3 White Soldiers/3 Black Crows Pattern

3 White Soldiers/3 Black Crows Pattern

Image 3 displays “three white soldiers” and “three black crows” candlesticks. The green candles represent seller exhaustion and further upside is now expected. 

The three red candles suggest that buyers have been exhausted and price may move to the downside.

Key Takeaways

The different patterns should be used in combination with other indicators (support, resistance, moving averages, etc.)
All three patterns can indicate a potential reversal in the market.

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