It means the weakness of the downtrend and also the sign of the potential reverse. When you have three stars in the South formation it is can be noticed that the wicks to the downside are long and bodies became shorter. When you are looking at the candle a lot of useful information can be received.įor example if the candle have the long wick to the downside and short body (hammer), it means a huge bullish pressure and this is a reversal to the uptrend sign. They are divided into five groups:Īll these common formations you can see on the chart but first of all you should understand what has happened on the market. Here is the cheat sheet for the candlestick patterns.
