Candlestick Patterns

Candlestick patterns have been used since 18th-century Japanese rice trading and remain essential tools for modern traders.

Single candle patterns

• Doji: Open and close are nearly equal—indecision
• Hammer: Small body at top, long lower wick—bullish reversal at support
• Shooting star: Small body at bottom, long upper wick—bearish reversal at resistance
• Engulfing: Current candle completely engulfs the previous one

Multi-candle patterns

• Morning star: Three-candle bullish reversal (down candle, small body, up candle)
• Evening star: Three-candle bearish reversal
• Three white soldiers: Three consecutive strong bullish candles
• Three black crows: Three consecutive strong bearish candles

Important context

• Patterns at key support/resistance levels are far more significant
• Volume confirmation strengthens the signal
• A single candlestick pattern alone is rarely sufficient for a trade decision
• Always consider the broader trend and market context