TREND

BEARISH CANDLE-
-STICK PATTERN
SHOOTING STAR

Pattern Type :- Bearish

• Shooting star is a prominent bearish

reversal Candlestick pattern that aften
signal potential top or resistance in the
market, especially when it appears after
an uptrend. Its evocative name alludes
to the meteoric rice and rapid fall
represented by the pattern, suggesting a
possible change in the market
sentiment from bullish to barish
•Pattern psychology

•Understanding the psychological dynamics behind the Shooting Star

•Continuation of Bullish Momentum: The session starts with the continuation of the existing
bullish trend, driving prices upwards. This initial surge is represented by the long upper
•Shadow
•Bearish Intervention: At some point during the session, bears take control and start to push
prices down, erasing most of the gains made by the bulls. By the end of the session, the price
closes near its opening level, forming the small body at the lower part of the candle.

•Sign of Potential Reversal: The Shooting Star indicates that, despite initial bullish momentum,
selling pressure managed to dominate by the close of the session. This shift from bullish to bearish
sentiment within a single trading period, especially after a sustained uptrend, signifies potential
exhaustion among the bulls and hints at a bearish reversal.

•Seeking Confirmation: While the Shooting Star is a bearish signal on its own, many traders
await further confirmation before making trading decisions. A subsequent bearish candle or other
bearish technical indicators can solidify the pattern's reversal implications.
THREE BLACK
CROW
 •The Three Black Crows is a bearish reversal pattern that stands
THE THREE out as a clear signal of an impending downfall after a period of
uptrend or bullish sentiment. As its name suggests, the pattern is
BLACK CROWS symbolically likened to three crows descending upon a
battlefield, symbolizing doom and darkness.
What The Pattern Looks Like

•The Three Black Crows pattern consists of three distinct candles:

•First Candle: This is a relatively long bearish (red) candle. It appears after a
period of uptrend or bullish consolidation, indicating a sharp decrease in price
from the opening to the close.

•Second Candle: The second candle is also a bearish one, and it should ideally
open within the body of the first candle. Crucially, this candle closes even lower
than the first, further perpetuating the downward trend.

•Third Candle: Following the trend, the third candle is bearish, opening within the
body of the second candle. It should close lower than the second candle, affirming
the bearish reversal trend.For the pattern to be a genuine

• Three Black Crows formation, it's preferable for all three candles to have
minimal or nonexistent upper wicks. This implies that the market consistently
closed near its low during the formation of the pattern.
PATTERN PSYCHOLOGY

•Diving into the psychology behind the Three Black Crows:End of Bull Dominance: Before the emergence of the Three
Black Crows, the market is generally in an uptrend or bullish consolidation phase. Bulls are dominant, driving prices
upwards.Bearish Onset: The surfacing of the first long bearish candle indicates an abrupt and potent selling interest. This
could be attributed to negative news, shifts in market conditions, or other elements that reverse the prevailing
sentiment.Sustained Selling Pressure: The next two candles showcase a continued selling vigor. The consistent closing
near the lows (with small upper wicks) reveals that bears maintain control throughout the trading days, overpowering
any bullish attempts to elevate prices.Shift in Market Mood: The sequential progression of the three candles highlights a
decisive turn from a bullish or neutral sentiment to a pronounced bearish disposition. At this juncture, the market
anticipates the downward trend to persist.Prospect of Further Declines: While the Three Black Crows pattern is a
formidable bearish signal, savvy traders often seek supplementary confirmation to ascertain the trend's strength. A
continuation pattern or other bearish indicators in the wake of the Three Black Crows can bolster the prognosis of a
sustained bearish period.
HANGING
MAN
•The Hanging Man is a bearish candlestick pattern that often
signals a potential top or resistance level in the market,
particularly when it emerges after an uptrend. Its name,
suggestive of its appearance, denotes the potential downfall or
"hanging" of bullish sentiment.
•What The Pattern Looks LikeThe Hanging Man is
defined by a single candle with these characteristics:
•Small Upper Body: The body, whether bullish
(green/white) or bearish (red/black), should be
located in the upper part of the candlestick.
However, a bearish body is seen as a stronger
signal.
•Long Lower Shadow: The hallmark of the Hanging
Man is its long lower shadow (wick), which should
be at least twice the length of the body.

Little to No Upper Shadow: Ideally, the Hanging

Man should not have an upper shadow, but if
present, it should be very short.
EVENING
STAR
•The Evening Star candlestick pattern is a bearish reversal
pattern that indicates a potential shift in the market's direction
from bullish to bearish. Forming at the peak of an uptrend, the
Evening Star suggests that the day is ending and night (or a
bearish phase) is about to set in, metaphorically speaking.
What The Pattern Looks Like
he market psychology behind the Evening Star pattern can be
dissected as follows:

First Candle: This is a long bullish (green) candle continuing the

prevailing uptrend. It has a long body, signifying a strong upward
movement.

Second Candle: The second candle can be either bullish (green)

or bearish (red), but it is typically smaller in size or even a Doji
(where the opening and closing prices are nearly the same). This
candle will often gap up from the close of the first candle,
implying it opens at a higher price than the closing price of the
previous candle.

Third Candle: This is a long bearish (red) candle that often gaps
down from the close of the second candle. Ideally, it should close
at least halfway into the body of the first candle. The deeper it
penetrates into the first candle's body, the stronger the bearish
reversal signal.
PATTERN PSYCHOLOGY

•The market psychology behind the Evening Star pattern can be dissected as
follows

•Continuation of Bullish Sentiment: The first long green candle shows that
bulls are still in control, pushing prices higher and continuing the existing
uptrend

•Market Indecision: The appearance of the second smaller candle or Doji

highlights a slowdown in the bullish momentum. This represents a point of
uncertainty in the market where neither bulls nor bears have a definitive grip.

•Change in Sentiment: By the third candle, the sentiment undergoes a clear

shift. The price gaps down at the open, indicating that bears are now entering
the scene with conviction. As this candle pushes downward, it solidifies the
notion that bears have taken control, signaling the start of a potential
downtrend.

•Seeking Confirmation: Although the Evening Star is a robust bearish

reversal pattern, prudent traders often wait for additional confirmation. This
could come in the form of another bearish candle following the Evening Star
or through other technical indicators that might highlight growing
bearish momentum.
THE BEARISH
ENGULFING
•Bearish Engulfing pattern is a potent
bearish reversal signal, typically signifying
a potential top or resistance level in the
market when it emerges after an uptrend.
As its name suggests, the pattern involves
a bearish candle "engulfing" the preceding
bullish candle, symbolizing a dominant
shift from buying to selling sentiment.
What The Pattern Looks Like
The Bearish Engulfing is a two-candlestick pattern characterized by the
following attributes:

First Candle: A bullish (green/white) candle that represents a

continuation of the existing uptrend.

Second Candle: A more substantial bearish (red/black) candle that opens

higher than the close of the previous bullish candle and closes lower
than the opening of the prior bullish candle. Essentially, the body of the
bearish candle completely engulfs or overshadows the body of the
preceding bullish candle.

Shadow Considerations: While the body of the second candle must

engulf the body of the first, the shadows (wicks) of the candles are not
strictly taken into account. Nevertheless, the pattern is considered more
potent if the second candle's shadows also engulf the shadows of the
first candle.

Location: For maximum relevance, the Bearish Engulfing pattern should

materialize after a pronounced uptrend or bullish movement.
Momentum Pivot: The second candle starts with a gap up, signaling an initial extension of the bullish trend. Yet,
as the session progresses, selling pressure intensifies dramatically, causing prices to drop and close beneath the
opening of the previous day. This robust bearish action effectively "engulfs" the optimism of the prior day.

Indication of Potential Reversal: The Bearish Engulfing pattern conveys a marked shift in market dynamics.
After a period of ascending prices, the sudden forceful bearish response hints at potential exhaustion among
buyers and a burgeoning assertiveness among sellers. This can be seen as a signal that momentum is pivoting
towards the bears.

Emphasis on Confirmation: Although the Bearish Engulfing pattern is a robust bearish sign in isolation, cautious
traders frequently seek supplementary confirmation. This could manifest as a subsequent bearish candle, an
increase in trading volume during the formation of the engulfing candle, or other supportive technical indicators.
THREE LINE
STRIKE
•The Bearish Three Line Strike is a striking
bearish continuation pattern. It often
surfaces during a downtrend, indicating a
potent continuation of the bearish
momentum. The pattern vividly captures a
temporary rebound in the downward
movement, swiftly followed by a dominant
resurgence of the bears.
•What The Pattern Looks LikeThe Bearish Three Line Strike consists of a
series of four candles:

•First Three Candles: These are three consecutive bearish (red/black)

candles, with each one closing lower than the preceding, mirroring the
continuation of the prevailing downtrend.

•Fourth Candle: In a surprising twist, the fourth candle is a long bullish

(green/white) one. It opens below the third candle's close but then
dramatically "strikes" upwards, engulfing the real bodies of the preceding
three bearish candles and closing above the first day's open. Nonetheless, it
doesn't necessarily need to cover the shadows of the prior candles.
 •Persisting Bearish Control
•
•The initial three candles unmistakably showcase the ongoing bearish sentiment. Each day, sellers exert
their influence, pushing prices lower and securing a close at or near the daily low.

•Temporary Hiccup: The fourth day begins with a downward bias, consistent with the established trend.

PATTERN Yet, as trading unfolds, buyers momentarily swing into action, driving prices upwards and erasing the
losses from the prior three days. This indicates a fleeting resurgence of the bulls.

PSYCHOLOGY •Bearish Determination: Despite the bullish interruption on the fourth day, the overarching trend
remains bearish. The pattern is generally perceived as a bearish continuation, suggesting that the bulls'
brief attempt on the fourth day fails to overturn the dominant downtrend.

•Evaluating the Context: The potency of the Bearish Three Line Strike is bolstered when aligned with
other technical indicators. For instance, if the fourth candle faces resistance at a known level or is paired
with a high selling volume, it amplifies the pattern's bearish continuation indication.
THREE INSIDE DOWN
•The Three Inside Down is a
bearish reversal candlestick
pattern, indicating a potential
shift from an existing uptrend to
a new downtrend. This pattern
suggests that selling pressure is
mounting, marking a likely end
to a prior bullish phase and
signaling a transition towards a
bearish sentiment in the market.
WHAT THE
PATTERN LOOKS
LIKE
•The Three Inside Down pattern is formed by a
sequence of three candles

•First Candle: A long bullish (green/white) candle,

indicative of the continuation of the preceding
uptrend.

•Second Candle: A bearish (red/black) candle that

forms within the range of the first candle. This
candle closes lower than its open but doesn’t dip
below the close of the first candle. Essentially, this
forms a bearish harami pattern when combined with
the initial bullish candle.

•Third Candle: Another bearish candle that closes

beneath the low of the first candle, thus solidifying
the reversal indication.
Pattern psychology
To grasp the mentality driving the Three Inside Down pattern

Pattern Significance: The

Three Inside Down portrays
Initial Optimism: The bullish
the power dynamics shift from
candle that begins the
bulls to bears. Initially, the
sequence suggests that buyers
bullish sentiment appears to
are still active and are steering
prevail, but the consecutive
the market in an upward
candles unveil a growing and
direction.
then confirmed
bearish dominance.

Emergence of Uncertainty:
Bearish Affirmation: The third
The subsequent bearish
bearish candle, closing below
candle, contained within the
the low of the first, is a
boundaries of the initial
forceful move signaling that
candle, implies a waning
sellers have wrested control
bullish sentiment. The sellers
from the bulls. This
are starting to gather
culmination indicates that a
momentum, introducing doubt
bearish reversal is likely
into the previously dominant
underway.
bullish trend.
GRAVESTONE
DOJI
•The Gravestone Doji is an intriguing
candlestick pattern often signaling a
potential bearish reversal, especially when
observed after an uptrend. The pattern
derives its ominous name due to its
resemblance to a gravestone, representing
the end of the bullish sentiment.
 What The Pattern Looks Like

The Gravestone Doji is characterized by a single candle with the following

traits:

Open, Close, and Low Prices: These prices are almost identical or very close,
resulting in an extremely small or nonexistent body. Essentially, the open and
close are at the lowest price point of the session or close to it.

Upper Shadow: The Gravestone Doji exhibits a long upper shadow (wick) that
stretches above the body, signifying the range between the session's highest
traded price and the opening/closing price.

Lower Shadow: This pattern either lacks a lower shadow or has a very short
one, denoting that the lowest price of the day is around where the security
opened and closed.
PATTERN
PSYCHOLOGY

•Initial Bullish Momentum: The session starts with

bulls pushing the price upwards, reflected in the
long upper shadow as the price surges to its peak for
the day.

•Bears Take Control: As trading progresses, bears

intervene and drag prices downwards. This bearish
push is so pronounced that the session's close is at or
near its opening price.

•Indication of Reversal: The formation of the

Gravestone Doji suggests that while bulls initially
dominated the trading session, by its end, the bears
managed to completely offset the bullish advance.
Especially when appearing after an uptrend, this
balance and eventual overpowering of bulls by bears
points to a potential bearish turnaround or a
deceleration of bullish momentum.
DARK CLOUD COVER
•The Dark Cloud Cover is a bearish
reversal candlestick pattern, often
appearing after an uptrend and signaling a
potential shift in the prevailing bullish
sentiment. The pattern encapsulates the
market's transitioning dynamics, where
bullish optimism is being overshadowed
by emerging bearish sentiment.
What The Pattern Looks Like
The Dark Cloud Cover is a two-candlestick pattern with the
following characteristics

First Candle: A relatively long bullish (green/white) candle that reflects the
continuation of the existing uptrend.

Second Candle: This is where the dynamics change. The candle opens above
the high of the preceding bullish candle, creating an initial impression of a
continuing uptrend. However, as the session progresses, it closes significantly
lower, penetrating at least halfway (typically more) into the body of the first
candle. This candle is bearish (red/black).

Ideal Scenario: For a more potent Dark Cloud Cover pattern, the second
candle should close below the midpoint of the first candle's body. The deeper
the penetration, the stronger the potential bearish reversal signal.
PATTERN PSYCHOLOGY

•Continuation of Bullish Trend: The initial candle represents a continuation of the

bullish trend, indicating that buyers still have the upper hand.

•Shift in Sentiment: The second candle starts with optimism as it opens above the
prior session's high. However, as the trading session progresses, sellers come into
force, driving the price significantly lower. This culminates in the candle closing well
into the body of the previous day’s bullish candle, symbolizing a sudden and marked
shift in sentiment.

•Emerging Doubts: The rapid shift from the high opening to the deep closing
penetration encapsulates growing uncertainty and apprehension among traders. The
once prevailing bullish sentiment is now being seriously questioned, and doubt creeps
in.

•Need for Confirmation: While the Dark Cloud Cover inherently is a strong bearish
reversal sign, seasoned traders often look for further confirmation. This could come in
the form of another bearish candle following the pattern, a surge in trading volume on
the second candle, or corroborative signals from other technical indicators.
•Need for Confirmation: While the Dark Cloud Cover
inherently is a strong bearish reversal sign, seasoned
traders often look for further confirmation. This could
come in the form of another bearish candle following the
pattern, a surge in trading volume on the second candle, or
corroborative signals from other technical indicators.
MARUBOZU
•The Bearish Marubozu is a pronounced
bearish candlestick pattern, representing
robust selling sentiment throughout a
given trading session. Stemming from the
Japanese term for "bald" or "shaven," the
name "Marubozu" refers to the pattern's
distinct lack of shadows, showcasing a
steadfast commitment from sellers from
the session's beginning to its end.
WHAT THE PATTERN LOOKS LIKE

The distinct features of the Bearish Marubozu include:

No Shadows: The primary hallmark of a Marubozu is its absence (or

nearly negligible presence) of upper and lower shadows. This
suggests that the opening price was also the session's high, and the
closing price was its low.

Long Red Body: The body of the candle is red (or black depending on
the charting system), signifying that the closing price was lower than
the opening price.

Size: Typically, the Marubozu boasts a relatively long body in

comparison to previous candles, highlighting the strong selling
sentiment that prevailed throughout the session
 •Consistent Bearish Momentum: The session commences at its peak and
concludes at its lowest point, underscoring a persistent selling pressure from
start to finish. At no juncture did the buyers push the price above the
opening, nor prevent the sellers from driving it down to the close.

•Undiluted Seller Control: The sheer absence of shadows paints a picture of

PATTERN a trading period where one sentiment reigned supreme. For the Bearish

PSYCHOLOGY Marubozu, it's evident that sellers maintained unwavering dominance.

•Potential Continuation or Reversal: If this pattern emerges amidst a

downtrend, it solidifies the bearish sentiment, hinting at a continuation.
Conversely, if it materializes after an uptrend or at a recognized resistance
level, it can signal a potent bearish reversal, suggesting that the bulls have
been overpowered and a downward shift may be imminent.
BEARISH
HARAMI
•It’s a bearish reversal pattern.
•Usually, it appears after a price move to the upside
and shows rejection from higher prices.

•The pattern is bearish because we expect to have a

bear move after the Bearish Harami appears at the
right location.

•It’s a reversal pattern because before the Bearish

Harami appears we want to see the price going up,
thus it’s also a frequent signal of the end of a trend.
VARIANTS OF
THE BEARISH
HARAMI
CANDLESTICK
PATTERN
To trade the Bearish Harami candlestick pattern it’s
not enough to simply find a series of candles with the
same shape on your charts.

What makes a pattern valid is not just the shape, but

also the location where it appears.

This means that the same shape appearing at

different locations may have different meanings.
When trading the Bearish Harami, we want to see
the price first going up, making a bullish move.

A Bearish Harami appearing after this bullish move

is a sign of a possible reversal to the downside.
•The Falling Window
•The Falling Window, also known as the
"Gap Down" in Western technical analysis,
is a bearish candlestick pattern signaling a
potential continuation of the current
downtrend. This pattern is characterized by
a gap between the low of one session and
the high of the following session, with no
overlap in prices. The presence of this
window or gap provides a strong indication
of bearish sentiment in the market.
What The Pattern Looks Like
The Falling Window pattern comprises

A candle, which can be bullish or bearish, followed by a gap

where the next candle opens.

A subsequent candle that opens below the low of the previous

session, leaving a clear gap or "window" between the two
sessions.

For the pattern to maintain its validity, the window should

remain unfilled.

This means no trading activity should overlap into the gap area.
If future candles close the gap, it can negate the bearish
implication of the Falling Window.
PATTERN
PSYCHOLOGY
•The psychology underpinning the Falling Window
(Gap Down) pattern is as follows:

•Before the Gap: Prior to the gap's formation, the

sentiment might be mixed, or there could already be a
bearish trend in motion.

•Formation of the Gap: The emergence of the gap

signifies a sudden and robust increase in the asset's
supply, such that the opening price is notably lower
than the previous session's low. This shift could be
attributed to negative news, disappointing earnings
reports, or other influential negative catalysts.
 End
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