It's important to be familiar with the basics of candlestick patterns and how they affect your

decisions.

What is K line?
K-line or K-bar is a way of displaying information on asset price trends. The K-line chart is one of
the most common components in technical analysis. It allows traders to quickly interpret price
information from several K-line combinations.

 Entity, representing the range from open to close

The upper and lower shadows represent the highest and lowest prices during the day

K line color, green (or white) real line indicates price increase, while red (or black) real line
indicates price decrease

The combined pattern of each individual K-line can be used by traders to identify major support
and resistance levels. These K-line combination patterns help discover opportunities in the
market

L-line combination types and how to use them

Six Bullish K-Line Patterns

Bullish patterns may form after a market downtrend and mainly indicate an imminent reversal in
price action. These indicators serve as a reference for traders considering going long and profiting
from subsequent price increases.

Hammer line
The Hammer candlestick pattern is a single candlestick with a short real body and a long lower
shadow that is located at the bottom of a downtrend.
The hammer pattern shown in the chart below shows that although there was selling pressure
during the trading day, strong buying pressure eventually drove the price back up. The color of
the real body may vary, but a green hammer indicates a stronger bullish bias than a red hammer.
Lnverted hammer shape

Another similar bullish pattern is the Inverted Hammer, the only difference being that it has a
long upper shadow and a short lower shadow.

This pattern means that after buying pressure in the market, there is selling pressure that is not
enough to push the market price down, and the buyer's power quickly regains control of the
market.
Bulls engulf

The bull engulfing pattern consists of two K lines. The first candlestick is a short red real body that
is completely engulfed by a larger green candlestick that follows.

While the second day opened lower than the previous day, it was the buyers who ultimately won
clearly as bullish forces pushed prices higher.
puncture line

The puncture line is also a combination of two K lines. It consists of a long red K line and a long
green K line.

There is usually a large gap between the closing price of the first red K-line and the opening price
of the second green K-line. Since the price is being pushed up to or above the previous day's mid-
price, it indicates heavy buying pressure in the market.
Morning star

The Morning Star is considered an optimistic signal in a downturn in the market. It is a pattern
composed of three K lines, that is, a long red K line and a long green K line mixed with a short K
line. Generally speaking, the middle "star" will not overlap with the longer real body line because
the market will gap at the open and close.
It signals that first-day selling pressure is fading and a bullish trend is imminent.

white three soldiers

white three soldiers

The white three soldiers pattern appears on three consecutive trading days. It consists of
continuous green (or white) long K lines with small shadow lines, and the opening and closing
prices are higher than the previous day.
This is a strong bullish signal that occurs after a downtrend and usually indicates a steady
increase in buying pressure.
Six Bearish Candlestick Patterns
Bearish candlestick patterns usually form after an uptrend and signal the emergence of a
resistance point. Severe pessimism about market prices often leads traders to close out their long
positions and enter short positions to take advantage of falling price trends.

hanging man pattern

The hanging man is a bearish pattern. Although its shape is the same as the hammer, it is formed
at the end of the uptrend.
This pattern indicates that there was significant selling pressure on the day, but buyers were able
to push prices back up to some extent. Massive sell-offs are often seen as a sign that bulls are
losing control of the market.
shooting star
The shooting star has the same shape as the inverted hammer, but it appears in an uptrend: its K
line has a small real body and a long upper shadow.
Typically, the market will open slightly higher and rebound to the session high, only to close
slightly above the opening price, like a meteor falling to the ground.
Short engulfing
The bearish engulfing pattern occurs at the end of an uptrend. The first candlestick contains a
small green real body, which is then engulfed by the second long red candlestick.
It marks a peak or slowdown in price action and is a sign that the market is about to decline. The
lower the second K line goes, the more obvious the trend may be.
evening star
The structure of the Evening Star is similar to the bullish Morning Star. It is composed of three K
lines, namely a long green K line and a long red K line with a short K line sandwiched in between.
It signals a reversal in an uptrend and is especially strong when the third candlestick erases the
gains of the first candlestick.
three crows
The Three Crows K-line pattern consists of three consecutive long red K-lines with short or non-
existent shadows. The opening prices of the next two trading days are similar to the closing prices
of the previous day, but with each close, selling pressure will push the price lower and lower.
Traders interpret this pattern as the beginning of a bearish downtrend, as seller power has
exceeded buyer power for three consecutive trading days.
dark clouds cover
A dark cloud cover candlestick pattern indicates a bearish reversal, with the previous day's
optimism being overshadowed by dark clouds. This pattern contains two K-lines: a green K-line
and a red K-line. The opening price of the red K-line is higher than the previous green K-line, but
the closing price is lower than the midpoint of the green K-line.
It shows that bears have taken over the trading session and are driving the price significantly
lower. If the shadow line of the K-line is short, it indicates that the downtrend is very decisive.
Four finishing K-line patterns
If the K-line pattern does not indicate a change in market direction, it is called a consolidation
pattern. These can help traders identify periods of rest in the market when the market is
indecisive or when prices move neutrally.

Doji
When the market opens and closes at nearly the same price point, the candlestick resembles a
cross or a plus sign, and traders should be able to notice short to non-existent real bodies and
shadow lines of varying lengths.
This cross pattern conveys a struggle between buyers and sellers, resulting in neither party
gaining the upper hand. A doji star alone is a neutral signal, but it can be seen in reversal
transitions, such as the bullish morning star and the bearish evening star.
Spindle line
The body of the spindle K-line pattern is shorter and located between the upper and lower
shadow lines of equal length. This pattern indicates indecision in the market, resulting in no
meaningful price movement: bulls push the price higher, while bears push the price lower again.
Spindles are often interpreted as a period of consolidation or rest following an apparent up or
down trend.
The spindle itself is a relatively benign signal, but it can also be interpreted as indicating that
today's market pressure is getting out of control.
Descending Three Methods
Three method patterns are used to predict the continuation of the current trend, either bearish
or bullish.
The bearish pattern is called the "Three Falling Methods". It is a pattern composed of a long red
real K-line, three small green real K-lines, and another red real K-line. The green K-lines are all
covered. Bearish real body range. It indicates to traders that the bulls do not have enough power
to reverse the trend.
Ascendant Three Methods
The bullish "rising three method" K-line pattern is the opposite. It consists of two long green real
K-lines and three short red K-lines mixed in the range of the two green real bodies. This pattern
indicates to traders that although there is some selling pressure, buyers still maintain control of
the market.