Candlestick Reversal Patterns | 5 Most Powerful Reversal Patterns!! - YouTube

Reversal candles, One of  the most important element  

of price action trading is reversal candles,

Now, When you are trading  between a support and resistance, 

You can buy here and sell here, buy at  the support, sell at the resistance.

But it's not just that, For when you buy,  you want it to reverse, so you can make a  

profit .. But you don't know if it's going to  reverse or breakdown and that's why you need  

a reversal candle, like this .. to  let you know it is reversing for sure.

There are many reversal candlestick  patterns but I am gonna present to you,  

5 of the most reliable and powerful  reversal candlestick pattern

alright, 1. Engulfing candles - (Radico) Engulfing  

meaning to consume, to eat up ... At the  support when you see a big green candle  

completely consuming a smaller red candle,  That's a bullish engulfing pattern ... Here  

another example of a Bullish Engulfing candle A  green candle completely consuming the red candle,  

In this pattern we only see  the candle and not the wick. 

Now at the resistance, Likewise when you  see a red candle eating up a green candle..  

that is a bearish engulfing pattern again here you  see another bearish engulfing pattern and it works  

beautifully, The engulfing candle is by far  the most powerful reversal candle patterns  

compared to any other reversal candle and  the Psychologically reason behind it is  

There is a green candle that has reached the  resistance, It has lost momentum, takes a u turn  

and fire down, The big red candle  consuming the green candle represents  

the sellers have outnumbered the  buyers and it's ready to blow down.

2. Piercing candle - A piercing candle is just  like an Englufing candle except it didn't manage  

to completely close over the previous candle. In this case the green candle did not manage  

to consume the red candle ... In order for  a candle to qualify as a piercing candle  

it needs to consume at least 80% of the candle,  Which it did. It might not have consumed the  

candle completely but a piercing candle  is as well a very strong reversal candle.

3. At no 3, We have one of the most  popular resversal candle -The Hammer candle 

A candle that basically looks like a hammer, The  wick should be at least 3 times bigger than the  

candle and ideally little or no wick on the top (Castrol) As you can see We have a hammeral  

reversal candle at the support and it works  wonderfully, not only it's a very reliable  

reversal candle but a favorite among many traders. Now just like the hammer candle, We have the  

inverted hammer, The upside down hammer candle (sonacoms) Here, the candle touches the  

resistance, A neat Inverted hammer candle  and Boom a very well done reversal, 

(Alkymine) Here we have another inverted  candle .. The candle should ideally be  

smaller but in this senerio, This is a very  powerful confirmation, Can anyone tell why? 

Not only is there an Inverted hammer candle but  also next to that we have a bearish engulfing  

candle, This is a double confirmation and it  just screams a massively good opportunity. 

Now there is a big misconception that hammers  work only in support and inverted hammer works  

only for resistance, No, You can also use the  Inverted hammer as a Bullish reversal candle  

at the support, And a hammer candle as a  bearish reversal candle at the resistance ...  

A reason why many might have got confused with  this is cause the hammer and the inverted hammer  

goes by many other names, Like the hanging  man or shooting star .. But who cares,  

This is how the pattern looks, and this is  it's function, these are all you need to know!

4. Next we the tweezer reversal candlesticks  - The tweezer Reversal pattern is simply when  

Two candle's wicks at reversal are at the same  level, As you see here, Neatly at the support  

these 2 candles wicks have reversed .. The  psychology behind it is it is being confirmed  

twice by these 2 wicks that there is a line  of boundary that cannot be crossed. Hence it  

forms this pattern, If it's at the bottom it's  called Tweezer bottom and if it's at Resistance,  

then Tweezer tops ... Now using just the  tweezer reversal pattern for a confirmation  

might not sufficient, Hence it's better when  there is another Pattern also confirming to it  

like here we have the tweezer bottom and a  bulish engulfing .. A double confirmation.

5. At no 5, We have Evening star / Morning star -  If you find this pattern at Support It's a morning  

star and If you find this pattern at Resistance  it's an evening star. So what is this pattern,  

It's basically a tiny candle between 2 big red  and green candles. Here we have a morning star  

reversal pattern and it works very well, Here is  an another morning star pattern and If notice,  

the morning or evening star patterns  Psychologically works the same as an Engulfing  

or Piercing pattern. It basically is an expanded  version of the Engulfing or Piercing pattern,  

Instead of 2 candles .. It's taking  the same u turn but with 3 candles

Now reversal patterns are as simple as  this .. Whenever the candles are at your  

buy or sell price .. You find for the reversal  candle and then only shall you take the trade,  

Here I find a reversal candle, I buy, Again I  get the reversal candle, I buy another reversal  

candle and I buy ... Following this very simple  thing .. Increases your accuracy by over 80% 

What I don't understand is why do you  buy just cause it's at the support?

You see, trading is simple but we complicate it  with our emotions, Our fear of missing out ... All  

you have to do is follow the rules or strategy,  have a fixed entry and exit point .. and manage  

your risk, that is all you need to be a profitable  trader. To learn about the strategies I use,  

I have plenty of simple and easy to  understand video that you can check out!