Exciting News! CoinSmart is officially a publicly-traded company on the NEO Exchange trading under ticker SMRT.

# Technical Analysis Series Part 3: Three Simple Japanese Candlestick Patterns To Use Right Now

## Three Simple Japanese Candlestick Patterns #2: The Morning/Evening Stars

Up next, we have the “star” patterns – the bearish evening star and the bullish morning star. Both of these are trend reversal patterns. This is how they work.

### Morning star pattern – Bullish

This pattern happens at the bottom of a downtrend and indicates an imminent reversal in the bearish sentiment. This pattern is characterized by three candlesticks.

• First candle: A strong bearish candle that continues the current downtrend., indicating that the sellers are still in control.
• Second candle: The size of the candle is significantly smaller than the first candle. This could be either bullish or bearish. This candle indicates that the sellers have run out of momentum.
• Third candle: Now, the bulls have taken full control. This is indicated by the strong third candle.

### Evening star pattern – Bearish

This pattern happens at the top of an uptrend and indicates an imminent reversal in the bullish sentiment. This pattern consists of three candlesticks.

• First candle: A strong bullish candle that continues the current uptrend., indicating that the buyers are still in control.
• Second candle: The size of the candle is significantly smaller than the first candle. This could be either bullish or bearish. This candle indicates that the buyers have run out of momentum. This candle is also known as the “star.”
• Third candle: Now, the bears have taken full control. The strong third candle indicates this.

The following chart shows an evening star in action.

BTC/USD formed the pattern and dropped from $40,500 USD to$31,600 – losing ~$9,000. ## Three Simple Japanese Candlestick Patterns #3: Soldiers vs Crows The soldiers/crows signal trend reversals like the star patterns. The three white soldiers are a bullish signal, while the three black crows are a bearish sign. ### Three white soldiers – Bullish The pattern consists of three consecutive long-bodied green candlesticks at the end of a bearish trend. This pattern basically tells us that the buyers are back in complete control of the market. The candle’s wicks are very small, and they open and close progressively higher than the previous day. ### Three black crows – Bearish The pattern consists of three consecutive long-bodied red candlesticks at the top of a bullish trend. The three black crows signal the start of a bearish downtrend, with the sellers retaking complete control from the buyers. Each candle opens at the previous day’s closing price, but the negative pressure keeps pushing the price down. Again, let’s check the BTC/USD chart for this pattern. At the end of a long-running downtrend, the buyers took back control and formed the three white soldiers pattern with$30,750 USD to $33,650. Unfortunately, this didn’t kickstart a bullish rally, with the bears immediately taking back control. This example serves as a reminder for you that technical analysis isn’t an exact science. You must be very careful with your readings and observations. ## Conclusion Today we learned how to combine different candlesticks to form patterns to determine bullish or bearish market sentiment. In fact, these three patterns – engulfing, morning/evening star, and three crows/soldiers – are extremely useful in determining bullish/bearish trend reversal. Combine these patterns along with the lessons you have learned in our other articles to make solid and insightful trades. ### Alright, it’s quiz time! Before you take the quiz, make sure that: • You have a registered CoinSmart account. • You use the same email in the quiz that you use to register your CoinSmart account. ## Alright, it's quiz time! Before you take the quiz, make sure that: • You have a verified CoinSmart account (to get your reward if you successfully answer all the questions). • You use the same email in the quiz that you use to register your CoinSmart account. Three Simple Japanese Candlestick Patterns: Answer All The Questions And Earn An Entry To Win$1,000 CAD of Bitcoin

Enter your name
Enter your email
Which of these patterns include the least amount of candlesticks?
Which of the following shows that bearish trend is reversing to bullish?
The ETH/USD chart formed the three black crows at the top of an uptrend. What does this signify?
Do you know
CoinSmart’s GetSmart Hub?

Your Destination for Crypto Knowledge & Learning Tools.