Highlights ①. Gate's "Basic Futures Contracts" course introduces various methods of technical analysis that are commonly employed in futures trading. The aim of these courses is to help traders establish a comprehensive framework for technical analysis. Covered topics include the basics of Candlestick charts, technical patterns, moving averages, trend lines, and the application of technical indicators. ②. Class IV of the series "Master Technical Analysis", will guide users through various bearish candlestick combinations that are commonly used in trading, and will cover patterns of the combinations as well as their technical meanings.
1. Star in the Evening
①. Pattern (1) Appears during an upward trend; (2) It consists of three candles: the first is a green candle, followed by a short red candle that opens high, a short green candle or a cross candle, and the third one is a red candle; (3) The closing price of the third red candle is nearing the opening price of the first green candle. ②. Technical meaning This pattern suggests that the price is approaching its peak, indicating that a bearish trend is likely to follow. It may be a good time to consider selling assets.
2. Clouds over the Sky
①. Pattern (1) Appears in an upward trend; (2) It consists of two candles, one green and one red; (3) It begins with a long green candle, and is followed by a long red candle that opens high ; (4) The red candle's closing price is below the green candle's waist. ②. Technical meaning This pattern indicates that the bullish trend is losing momentum, and there is potential for a subsequent bearish market.
3. Round Top
①. Pattern (1) Appears during an upward trend or sideways consolidation; (2) It begins with a long green candle, which is then is followed by an array of short red candles and short green candles that are arranged in the form of an arc over the top; ②. Technical meaning This pattern suggests that the bullish trend is approaching its peak and is likely to reverse into a downward trend.
4. Three Crows
①.Pattern (1) Appears in an upward trend; (2) It consists of three long red candles that open high. ②. Technical meaning This pattern signifies the price is nearing the top and a bearish trend is expected to ensue soon. It is time to sell assets.
5. Keep Falling
①. Pattern (1) Appears in a downward trend; (2) It consists of many red candles, alternating with a few short red candles; (3) The candles go along a downward slope. ②. Technical meaning This pattern hints that the price is nearing the top and a bearish trend is expected to ensue soon. It is time to sell assets.
6. Short Soldiers
①. Pattern (1) It appears in a falling market; (2) It is composed of an array of candles; (3) It consists of a long red candle which is connected with a long shadow below; (4) The price rebounds and then quickly turns down to get below the below shadow. ②. Technical meaning This pattern suggests a potential bearish trend. It is time to sell assets.
7. Two Red Candles and a Green Candle
①. Pattern (1) It may appear in either an upward trend or a downward trend; (2) It consists of two long red candles and a short green candle in between; (3) The green candle is in between the two red candles.
②. Technical meaning (1) If it appears during an upward market, it signals the market is nearing the top and it is time to sell assets; (2) The pattern is more common in a downward trend and is less visible in an upward trend; (3) If it appears in a downward trend, it means the bearish trend will continue.
8. Summary This article introduces various bearish candlestick combinations commonly used in futures traders, by elaborating upon the pattern as well as the technical meanings of each combination. As useful as these indicators are, traders should never solely depend upon any of such indicators to make trading decisions. Once you read a signal from the candlestick pattern, it is advisable to double-check with other strategies and indicators to improve your success rate in trading.
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Disclaimer This article is for informational purposes only and does not constitute investment advice. Gate is not responsible for any investment decisions you make. Content related to technical analysis, market assessments, trading skills, and traders' insights should not be considered a basis for investment. Investing carries potential risks and uncertainties. This article offers no guarantees or assurances of returns on any type of investment.
