At any trading time frame, there is always a battle between the bear ( who makes profit in downtrend or when stock prices decrease) and bull (who makes profit in uptrend or when stock prices increases).
Using Candlestick patterns to identify entry points for bull is called bullish candlestick pattern, and the opposite candlestick signal for bear is called bearish candlestick pattern.Here are 4 popular signals to show you the difference between both patterns:
Bullish Candlestick pattern 1: Bullish Engulfing Pattern
This Pattern shows a strong bull move represented by a light body that overshadow a previous small dark body. This formation suggest that next move is controlled by the bull and the price will increase as there are more buyers than sellers.
Bullish Candlestick Pattern 2: Bullish Harami Pattern
In a downtrend when the small white candlestick appear after a dark body and it’s high and low is within the length of the previous dark body then this pattern suggests that the bull is taking over the trend and they will increase the price because of the buying activity.
Bullish Harami Candlestick
Bearish Candlestick Pattern 1: Bearish Engulfing Pattern
This example in the picture shows a dark body will overcast a smaller white body.In this pattern bears are taking over because there will be more selling activity here and the price will fall, so the next candlestick signal will suggest a price rise.
Bearish Engulfing Candlestick
Bearish Candlestick Pattern 2: Bearish Harami Pattern
The candlestick formation will show a dark body followed by a smaller white candlestick that has its high and low within the length of previous dark body. This pattern suggests a lower prices ahead as bears are winning by selling more than bull are buying, same as for harmonic trading patterns.
Bearish Harami Candlestick
By studying candlestick charts often, you’ll train your eyes to spot these strong signals and with the addition of other technical and fundamental analysis you can dramatically increase your winning stock picking system.