Class 4: Reading Candlestick Doji

Each chart candle is telling the story. Where bulls came from and how bears defended their turf and turned around the battle’s outcome. A Doji is a candle that often transforms the trend. It’s often found at the bottom and top of trends and thus is considered as a sign of possible reversal of price direction, but the Doji can be viewed as a continuation pattern as well.

Doji pattern is an extremely old tool, but it might not be so obvious in crypto. Volatility of the crypto market forces to adapt Doji candle reading to the fact that market moves much faster in both directions.

Inverted hammer candle

The inverted hammer is a type of candlestick pattern found after a downtrend and is usually taken to be a trend-reversal signal. The inverted hammer looks like an upside down version of the hammer candlestick pattern, and when it appears in an uptrend is called a shooting star.

Shooting Star/Hammer Candles

Three black crows are a reliable reversal pattern

when confirmed by other technical indicators like the relative strength index (RSI).

• The size of the three black crows and the shadow can be used to judge whether the reversal is at risk of a retracement.
• The opposite pattern of three black crows is three white soldiers indicating a reversal of a downtrend.

Engulfing Candle

Tweezers

Swing High Swing Low — Price Pattern