Bearish Candlestick Patterns in Forex – Identify Market Reversals and Downtrends Easily

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⚡ Quick Summary – Bearish Candlesticks in Forex

Learn the core bearish candlestick patterns that signal a potential downward move in Forex markets. This guide covers structure, context, and trade planning for patterns like Bearish Engulfing, Shooting Star, Evening Star, and Dark Cloud Cover—with simple diagrams and risk management tips.

Bearish Candlesticks: Understanding the Downward Pattern

A practical guide to the most reliable bearish candlestick signals, how to read them on Japanese candlestick charts, and how to build a simple, consistent trade plan.

📘 What Makes a Candlestick Bearish?

A bearish candlestick shows selling pressure: price closes below its open, often with upper wicks at resistance. In trends, bearish candles form lower highs (LH) and lower lows (LL), reinforcing a downtrend.

LH LL LH LL LH LL LH LL Downtrend: Lower Highs (LH) & Lower Lows (LL)

📉 Key Bearish Candlestick Patterns

1) Bearish Engulfing

A small bullish candle followed by a larger bearish candle that fully engulfs the prior body. Stronger near resistance after a rally; look for increased volume.

Bearish candle engulfs prior body → sellers in control

2) Shooting Star

A candle with a small real body near the low and a long upper wick; shows rejection at resistance. Best after a sharp rise into supply.

Long upper wick rejects resistance → potential top

3) Evening Star (3-candle)

Bullish candle → small indecision (doji/spinning top) → strong bearish candle closing into the first candle’s body. Powerful reversal at resistance.

Evening Star: shift from buyers → sellers

4) Dark Cloud Cover

A bullish candle followed by a bearish candle that opens above the prior high but closes below the midpoint of the bullish body—signals a strong shift to selling.

Open above prior high, close below mid-body → bearish shift

🛠 Building a Simple Trade Plan

  • ✅ Context: Prefer patterns at resistance, supply zones, or near a falling trendline/MA.
  • ✅ Entry: After confirmation (close below key level or break of structure).
  • 🎯 Target: Prior swing low or measured move based on structure.
  • 🛑 Stop-loss: Above the pattern’s high (e.g., wick high of Shooting Star).
  • 📊 Confirmation: Bearish candle strength, volume expansion, RSI < 50, MACD turning down.

⚠️ Common Mistakes

  • Trading against strong higher-timeframe uptrends without confluence.
  • Ignoring key support levels directly below the entry.
  • Entering before confirmation or using stops too tight inside noise.

💡 Key Takeaways

  • Bearish candles are most reliable at resistance and in established downtrends.
  • Top signals: Bearish Engulfing, Shooting Star, Evening Star, Dark Cloud Cover.
  • Wait for confirmation (close & structure) and use volume/RSI/MACD as filters.
  • Protect capital with stop-loss above pattern highs; aim for logical targets.

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