In this video, you will learn about the candlestick reversal patterns. Reversal patterns show you a potential reversal is about to happen in the market. Reversal patterns are formed by viewing candlestick in combination. For example, a bearish engulfing pattern, shows you the reversal from uptrend to downtrend.
For example, look at this chart. The market rallies initially. Then after reaching this area, price reaches an extreme, and falls down heavily. These reversal candles are likely to have long wicks to show the reversal behavior.
Look at another example. You can see a few shooting star candlesticks at this level, which indicates weakness at this level. Then the price breaks down below this ascending triangle pattern and the price declines. Reversal pattern can also show signs of weakness at a particular level.