Awesome!
You’ve just learned the different bearish reversal candlestick patterns.
Now, let’s take it a step further and learn how to identify high probability trading setups with it.
Here’s how you do it…
1. If the market is trending lower, then wait for a pullback towards Resistance
2. If the price pullback towards Resistance, then wait for a bearish reversal candlestick pattern
3. If there’s a bearish reversal candlestick pattern, then make sure the size of it is larger than the earlier candles (signaling strong rejection)
4. If there’s a strong price rejection, then go short on next candle’s open
5. And vice versa for long setups
Here are a few cherry-picked examples:
Bearish Engulfing Pattern:
Bearish Engulfing Pattern:
Shooting Star:
Note: There will be losing trades as well and this is not the “holy grail”.
