Recently, I noticed that many newcomers in crypto overlook one of the most useful tools in technical analysis — reversal candles. They really help catch moments when a bearish reversal might turn into an upward move, or vice versa.

Let’s go over the main patterns that I use myself in trading. Starting with the hammer — this is a candle with a small body and a long lower wick. It indicates that the price tried to fall, but buyers didn’t let it. Often, after a hammer, there’s an upward move, especially if it appears at a support level.

Next comes the shooting star — the opposite of a hammer. A small body, but a long upper wick. When you see this in an uptrend, it’s a signal that the price may reverse downward. It doesn’t always work, but it performs well at strong resistance levels.

Doji candles are one of my favorites. They have practically no body, only wicks. This means market uncertainty. If a doji appears after a strong move, it could mean either a bearish reversal or an upward one — depending on the context.

Engulfing candles — this is a powerful signal. When a bullish candle completely closes over the previous bearish one in a downtrend, it often means that the bearish reversal has already begun. And vice versa — when a bearish candle engulfs a bullish one in an uptrend, the drop begins.

What’s important to understand: these patterns work best at strong support and resistance levels. A reversal candle in the middle of the chart might just be noise.

How do I apply them? I never enter only based on a single candle. I wait for confirmation — either the next candle strengthens the signal, or volume is increasing, or some indicator (RSI, MACD) gives the green light. A bearish reversal or a bullish reversal — always needs confidence, not just hope.

If you trade on Gate, I recommend enabling these patterns in your toolkit. Over time, you’ll start seeing them intuitively, and trading will become easier.