Candlestick Pattern At Key Level

What is a Key Level

A key level in trading is a significant price level where the price has historically reacted, either reversing or consolidating. These levels act as support or resistance, helping traders make informed decisions about entries, exits, and stop losses. key level are .

• Support and Resistance
• Supply and Demand zone
• Moving Average
• Trend lines

1. Support and Resistance

• Support → A price level where buying pressure prevents further decline.
• Resistance → A price level where selling pressure prevents further rise.

2.. Supply & Demand Zones

• Supply Zone: A strong resistance area where sellers are aggressive.
• Demand Zone: A strong support area where buyers are aggressive.

3. Moving Averages

• 50 EMA, 200 EMA (Exponential Moving Average) act as dynamic key levels.
• Price often respects these MAs as support or resistance.

4. Trendlines

• Trendlines connecting higher lows (uptrend) or lower highs (downtrend) serve as dynamic support or resistance.

Best candle patterns

1. Long Wick Candle

A long wick candle at a key level signals price rejection, meaning the market tried to move beyond that level but was pushed back by strong buying or selling pressure.

Long Wick at Support (Bullish Reversal)

A long wick candle has a small body and a long upper or lower wick (or both). The wick represents rejection of price from a level — the market tried to go higher or lower, but failed, and price came back.

• Meaning: Price dropped down to support, but buyers stepped in and pushed it back up.
• Sentiment: Bullish rejection — buyers are protecting that level.
• Common Candles: Hammer, Dragonfly Doji.

Sellers tried to push the price down, but they couldn’t maintain the momentum, causing the price to bounce back up .

• Indicates buyers stepping in to push the price back up.
• Shows rejection of lower prices and possible trend reversal to the upside.

Long Wick at Resistance (Bearish Reversal)

• Meaning: Price went up to resistance, but sellers pushed it back down.
• Sentiment: Bearish rejection — sellers are defending that level.
• Common Candles: Shooting Star, Inverted Hammer.

Buyers tried to push the price higher, but they couldn’t maintain the momentum, causing the price to bounce back down .

• Indicates sellers stepping in to push the price down.
• Shows rejection of higher prices and potential trend reversal to the downside.

2. Multiple Long Wick Candle

When multiple long-wick candles appear at key levels, they provide valuable insights into market sentiment and trader psychology. These candles indicate price rejection and potential reversals based on whether they form at support or resistance.

At Resistance

Multiple long wick at resistance presented a trade opportunity short . Buyers tried over and over again to breach the resistance level , multiple time try to break the resistance buts its failed . this shows that sellers held the level strong .

Interpretation:

• Sellers consistently reject higher prices.
• Buyers try to push up, but get slapped back.
• Price fails to break out again and again.

Sentiment:

• Sellers: Strong and dominant.
• Buyers: Losing steam.

At Support

Multiple long wick candle at support presented a trade opportunity short . sellers try tried over and over again to breach the support level . multiple time try to break the support level but its failing , this show that buyers held this level strong .

Interpretation:

• Buyers consistently defend the support zone.
• Sellers try to break the level, but fail repeatedly.
• Market rejects lower prices again and again.

Sentiment:

• Buyers: Aggressive and gaining strength.
• Sellers: Weakening — they can’t break support.

3. Inverted Hammer

At Support

n inverted long wick candle appearing at a support level suggests that buyers attempted to push the price higher from a low point, but failed to maintain that strength by the candle close. This candle typically has a small real body at the bottom and a long upper wick, indicating that the bulls made an effort to reverse the downtrend but faced strong selling pressure. As a result, the price closed near where it opened, showing indecision or weakness from buyers. While this might seem like a potential reversal setup, it is generally not a strong bullish signal by itself.

What’s happening?

• Price comes down to a support level.
• Buyers try to push it up, but fail to close strong.
• Sellers reject the bounce — closing price stays low.

What does this mean?

• It’s a warning that buyers are not strong enough yet.
• May signal indecision or even a breakdown coming.

Sentiment:

• Buyers: Attempting a bounce, but hesitant or weak.
• Sellers: Still strong, ready to push lower.

At resistance

When an inverted long wick candle forms at a resistance level, it often indicates a strong bearish signal. In this case, the price moves up and tests the resistance zone, but gets rejected sharply as sellers overpower buyers. The long upper wick shows that bulls pushed the price higher during the session, but were unable to hold those gains, resulting in a close near the opening price. This kind of rejection suggests that sellers are in control and that the resistance level is being strongly defended. The sentiment behind this candle is typically bearish, and it often precedes a reversal to the downside.

What’s happening?

• Price rallies into resistance.
• Buyers try to break out — but fail.
• Sellers step in hard, and push price down before the candle closes.

What does this mean?

• Strong bearish rejection from resistance.
• Shows selling pressure and a likely reversal down.

Sentiment:

• Buyers: Tried to break through but got trapped.
• Sellers: Dominant — taking control.

4.Inside bar

An Inside Bar is a two-candle pattern where the second candle is completely within the high and low range of the first candle. In simple words, the second candle is “inside” the body of the previous one — it has a lower high and a higher low than the candle before it. The first candle is called the “mother bar”, and the second is the “inside bar”.

This pattern shows a pause in the market — like the market is taking a breath. It usually means indecision or consolidation, and often comes before a breakout or big move.

At resistance

Inside bar candle at resistance presented a trade opportunity short , price fail to make a higher high candle which shows a loss of momentum from the buyers in the market .

When an Inside Bar appears near a resistance level, it signals the market has rallied up into a key price zone, but now momentum has paused. The inside bar reflects indecision — buyers are hesitating, and sellers may be preparing to step in.

Again, two outcomes are possible:

1. If price breaks above the mother bar’s high, it may signal a breakout — buyers breaking through resistance.
2. If price breaks below the inside bar’s low, it could trigger a bearish reversal — a sign that resistance is holding and sellers are rejecting higher prices.

Sentiment:

• Buyers: Testing resistance, but uncertain.
• Sellers: Watching for weakness to short or sell.

At support

Inside bar candle at support presented a trade opportunity long , price fail to make lower low candle which shows a loss of momentum from the sellers in the market .

When an Inside Bar forms near a support level, it indicates that price has come down to an area where buyers usually step in — but now, the market is pausing and waiting. The inside bar here shows indecision: sellers have slowed down, and buyers are watching carefully.

This could mean two things:

1. A bullish reversal might be coming — especially if price breaks above the high of the mother bar. This shows buyers gaining strength.
2. If price breaks below the support level, it could be a breakdown — meaning sellers have taken control.

Sentiment:

• Buyers: Getting ready to defend the support.
• Sellers: Losing momentum but still pressuring.

5.Shrinking candle

Shrinking candle near support and resistance presented a trade opportunity long and short . shrinking candles work best when paired with a reversal candle once the key level is reached .

At Resistance

On the flip side, when shrinking candles form near a resistance level, particularly after an upward move, it indicates that buying momentum is fading. The candles get smaller as price nears the resistance zone, showing that buyers are struggling to push higher. This weakening momentum often reflects that sellers are watching closely and preparing to step in. The shrinking bullish candles represent a slowdown in demand and can serve as a warning sign of an upcoming reversal.

shrinking candle into resistance presented a trade opportunity short , shrinking candles work best when paired with a reversal candle once the key level is reached . its early signal of the buyers losing control and momentum of the upward trend direction . it also show a loss of momentum from the buyers in the market because distance travelled per candle is shorter and shorter .

At support

When shrinking candles appear as the price approaches a support level, it often signals that selling pressure is weakening. Each candle becomes smaller than the previous one, showing that sellers are still pushing the price down, but with less momentum. This loss of strength suggests that buyers may be quietly stepping in, absorbing the selling pressure and preparing for a potential bounce. The shrinking size of the candles reflects indecision and hesitation in the market. This is usually interpreted as a bullish sign

shrinking candle at support presented a trade opportunity long . an early signal of the sellers losing control and momentum of the downward trend direction . it shows a loss of momentum from the sellers in the market because the distance travelled per candle is shorter and shorter .

7. Growing candle

A growing candle is a candlestick that’s larger in body than the previous one, usually with stronger volume and clearer direction. When you see a series of growing candles, it means that price is moving with increasing strength .

At resistance

When you see growing bearish candles (red or black) near a resistance level, it’s often a bearish warning. It means sellers are entering the market with force, rejecting higher prices. The increasing size of the bearish candles suggests growing selling pressure and possible reversal from the resistance zone.

• Sellers: Gaining control, striking back with strength.
• Buyers: Losing confidence or taking profits.

At support

When growing bullish candles (green or white) appear near a support level, it’s a strong bullish signal. It usually means that buyers are stepping in with increasing confidence to defend the level. The larger candle bodies indicate growing demand and conviction that the price is going to bounce. This kind of price action often marks the beginning of a trend reversal from support .

• Buyers: Aggressive and confident.
• Sellers: Backing off, or getting stopped out.

8. Candle color change

A candle color change happens when the market shifts from one direction to another — for example:

• A red (bearish) candle is followed by a green (bullish) candle, or
• A green (bullish) candle is followed by a red (bearish) candle.

At resistance

Near a resistance zone, you might see a series of green candles pushing up into the level, and then a sudden red candle appears. This change from green to red signals buyer exhaustion and seller strength.

What this means:

• Sellers are now rejecting higher prices.
• Buyers may be hesitating or trapped.
• This often marks the beginning of a bearish reversal or a failed breakout.

At support

When price approaches a support zone, you might see a series of red candles (downtrend), and then suddenly a green candle forms. That change from red to green suggests that sellers are losing momentum and buyers are stepping in.

What this means:

• Buyers are starting to defend the level.
• Sellers may be taking profits or weakening.
• It can be the start of a bullish reversal from support.

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