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Advanced Candlestick Patterns Every Trader Should Know - Investment - Nairaland

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Advanced Candlestick Patterns Every Trader Should Know by Kremlinred: 8:43am On Jun 21
Advanced candlestick patterns are essential tools for traders to interpret market sentiment and make informed trading decisions. These patterns go beyond basic candlestick formations to provide deeper insights into potential market movements. Understanding and recognizing patterns such as the Three Black Crows, Morning Star, Evening Star, Dark Cloud Cover, and the Abandoned Baby can help traders anticipate reversals, continuations, and potential breakouts, thus improving trading accuracy and profitability.


1. **Three Black Crows**: This bearish reversal pattern consists of three consecutive long-bodied red candles, each closing lower than the previous one, indicating strong selling pressure.

2. **Morning Star**: A bullish reversal pattern formed after a downtrend, characterized by a long red candle, a small-bodied candle (showing indecision), and a long green candle, signaling the beginning of an upward trend.

3. **Evening Star**: The bearish counterpart to the Morning Star, this pattern appears after an uptrend and consists of a long green candle, a small-bodied candle, and a long red candle, indicating a potential downward reversal.

4. **Dark Cloud Cover**: This bearish reversal pattern starts with a long green candle followed by a red candle that opens above the previous green candle's close but closes below its midpoint, suggesting a potential trend reversal.

5. **Abandoned Baby**: A strong reversal pattern (bullish or bearish) characterized by a gap between the first and middle candle, and another gap between the middle and third candle, indicating a sharp change in market sentiment.

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