A pinbar after a long uptrend often signifies an imminent sell-off. It is,therefore, also listed under the trend reversal candlesticks because itindicates that an existing trend is coming to an end. If you see a pinbar witha long upstanding shadow, like in figure 11, in an upward trend, it meansthat although the buyers have tried to push the price up, the interest to sellhas suddenly increased and the sellers have reversed the price direction.The body of a candlestick like this should therefore close at the lower endto signal that the sellers have pushed the price below the opening price andthe reverse signal has thus been strengthened downwards.Figure 11: The elements of a pinbar candlestick include a long shadow and one comparativelysmaller body. The pinbar shows a price reversal and/or a rejection. After an uptrend, such a pinbarcould foreshadow a potential downward trend.3.5.2 The Hanging Man

During a strong trend, the candlestick bodies are oftensignificantly longer than the shadows. The stronger the trend,the faster the price pushes in the trend direction. During astrong upward trend, the candlesticks usually close near thehigh of the candlestick body and, thus, do not leave acandlestick shadow or have only a small shadow

If the candlesticks initially become smaller during a downward trend,they indicate that the sellers are slowly withdrawing from the market. Thefollowing engulfing candlestick then signals that the strength ratio suddenlyreverses and more buyers enter the market so rapidly that they explosivelyreverse the trend direction within a single candlestick. In this context, theEngulfing formation is a reversal signal: the price then has a higherprobability of moving further in the direction of the Engulfing candlesticksince the strength ratio has shifted on one side.Figure 15: The Engulfing candlestick is an effective multiple candles pattern that describes thesudden and strong change in direction.3.6.2 Three Black Crows (3BC)/Three White Soldiers (3WS)The 3BC formation is a signal for the trend continuation. It shows howthe sellers are pushing buyers out of the market. Figure 16 shows that the3BC formation consists of three consecutive downwards candlesticks,

It occurs when the trend continues in its existing direction following a brief pause.

The end of an up-trend (bull trend) is signaled when the price makes a _________, followed by a decline below the previous __________.Question 3Select one:a.higher low; highb.lower high; lowc.lower high; highd.higher low; low

Healthy trends, which move quickly in one direction, usuallyshow candlesticks with only small shadows since one side ofthe market players dominates the proceedings