Unveiling the Top 3 Candlestick Formations: Bullish and Bearish Scenarios

The Morning and Evening Star Patterns

These triple-candle configurations signal the potential conclusion of the prevailing market trend.

The Morning Star formation consists of an initial bearish candle, followed by a small-bodied second candle, and concludes with a third candle indicating a trend reversal. Conversely, the Evening Star pattern begins with a bullish candle, features a small-bodied second candle, and ends with a third candle suggesting a trend reversal, as depicted in the accompanying visual representation.

The Three White Soldiers and Black Crows Formations

The White Soldiers pattern emerges when three substantial bullish candles form in succession. This formation typically appears after a downward trend, signaling an ongoing reversal. This robust pattern often materializes following an extended downtrend and a period of price consolidation. The second candle should surpass the body of its predecessor in size, while the final candle ought to match or exceed the dimensions of the second.

Conversely, the Bearish Three Black Crows pattern serves as the antithesis to the White Soldiers formation. It manifests as three consecutive bearish candles at the culmination of a prolonged uptrend, suggesting an impending reversal. The body of the second candle must exceed that of the first, and the third candle should equal or surpass the size of the second.

The Three Inside Up and Inside Down Configurations

The Three Inside Up pattern surfaces at the conclusion of a downtrend, confirming an ongoing trend reversal. It begins with a lengthy bearish candle at the downtrend's nadir, followed by a second candle reaching the midpoint of the first. The pattern concludes with a third candle closing above the high point of the initial candle.

In contrast, the Three Inside Down pattern follows an uptrend and indicates a likely reversal. It commences with a long bullish candle, succeeded by a second candle reaching the midpoint of the first. The formation concludes with a third candle closing below the low point of the initial candle, signaling an imminent reversal.