Candlestick patterns are a combination of usually two or three pieces of candlesticks that some believe can predict a particular market movement. It is vital to know that almost all candlesticks patterns are reversal patterns. Here we will take a look of some most commonly traded candlesticks patterns:

Bullish Engulfing

When a smaller red candlestick is followed by a larger green candlestick, and the body of which completely engulfs the body of the previous smaller candlestick.

Bearish Engulfing

When a smaller green candlestick is followed by a larger red candlestick, and the body of which completely engulfs the body of the previous smaller candlestick.

Three Inside Up

A bullish reversal candlesticks pattern composed of a large bear candle, a smaller bull candle contained within the prior candle, and then another bull candle that closes above the close of the second candle.

Three Inside Down

A bearish reversal candlesticks pattern composed of a large bull candle, a smaller bear candle contained within the prior candle, and then another bear candle that closes below the close of the second candle.