You see, many traders are waiting for some magical indicator, but reversal candles speak much more. They are simply a visual imprint of the struggle between bulls and bears right on the chart. The more candles in the formation, the more reliable the signal — this is the main rule.

Let's start with the simplest ones. A hammer at the bottom of a trend is when sellers pushed the price down, but buyers immediately picked it up. Small body, long lower shadow. It's best to enter after the next bullish candle closes, preferably at a support level. The shooting star works on the opposite principle — at the top of a trend, attempts were made to push the price higher, but the market rejected the high levels. Here, bearish confirmation is important.

The hanging man pattern looks like a hammer but appears at the top. By itself, it’s not a signal — a strong red candle afterward is needed, preferably at resistance.

When reversal candles appear from two formations, it’s easier. Engulfing is one of the most powerful models. The second candle completely covers the body of the first. In bullish engulfing, enter at the close of the second candle or on a 30-50 percent pullback. Bearish engulfing is especially effective at resistance.

A cloud in the sky — the second candle opens lower, closes above the middle of the first. This is an upward reversal, and RSI usually exits oversold conditions. The dark cloud cover — a mirror pattern for a downward reversal.

Harami — this is not an instant reversal but a sign of weakening. A small candle inside a large one. You wait for a breakout of the range, and it’s often a preparation for a major move.

Three-candle reversal candles are considered the most reliable. Morning star — a long bearish candle, then a small (doubt), then a strong bullish candle. Enter after the third, catching medium-term moves at a support level. Evening star — a mirror image, a reversal downward, best at resistance with RSI divergence.

Three white soldiers — three large green candles with minimal shadows, a powerful control transition. Enter on a pullback, not at the highs. Three black crows — an aggressive bearish reversal, works after a long rise at key resistances.

The abandoned baby — a rare but deadly accurate pattern. The middle candle is a doji, gaps on both sides. Excellent for positional trading.

To strengthen any pattern, look at levels, RSI divergence, EMA 21 and 50, volumes. The main thing to remember: reversal candles are not a money button but a signal of changing balance. The best trades happen when the pattern, level, and confirmation come together at one point. If you want to test the theory in practice, you can look at ENA, ALT, ADA on the charts.