CANDLESTICK PATTERN
Candlestick charts are a technical tool that packs data
for multiple time frames into single price bars. This makes them more
useful than traditional open, high, low, and close (OHLC) bars or
simple lines that connect the dots of closing prices. Candlesticks build
patterns that may predict price direction once completed.
1. Bullish Engulfing
The bullish engulfing candlestick pattern indicates that the buyers are now in
control and that the number of buyers has outweighed the number of sellers. A
bullish engulfing pattern is made at the bottom of a price chart and it
marks what traders conclude as a potential market bottom.
A bullish engulfing candlestick pattern can be identified when a small red
candle’s high and low are breached or engulfed by a large green
candle at the bottom of a price chart. Look at the image below.
2. Bullish Harami
The bullish harami candlestick pattern is a two-candle pattern. The bullish
harami pattern is characterised by the formation of a small body (Green)
candle before a larger body (Red) candle. The occurrence of this pattern
typically occurs at the bottom of the chart and indicates a potential reversal of
a bearish trend towards the bullish side.
3. Tweezer Bottom
The Tweezer bottom candlestick pattern is a bullish reversal pattern. The
pattern consists of two or more candles with equal or identical lows forming a
horizontal support level. This candlestick pattern is typically formed at the
bottom of the price chart and signals a potential shift of momentum from
bearish to bullish side.
[Link] Star
The morning star candlestick pattern is a bullish reversal pattern which is made
up of three candles. The first candle is a strong bearish candle. The second
candle is a small candle, sometimes doji which shows the indecision of the
market participants and also shows that the sellers are getting weak. The third
candle is a strong bullish candle which marks the trend change.
5. Morning Star Doji
A morning star doji pattern is a bullish reverse pattern that has three
candles. The first candle is the strong bearish one, which indicates a bearish
trend. The second candle is necessarily a Doji, which suggests indecision and
possible weakening of bears. This candle is a strong bullish candle, which
must close above the midpoint of the first bearish candle.
6. Bullish Abandoned Baby
A bullish abandoned baby is a pattern of a bullish reversal that contains three
candles. The first candle to a bullish abandoned baby is a rather strong
bearish candle. Second one opens following a gap down and is
a doji. Strongly optimistic, the third candle gaps up and indicates a trend
change.
7. Three Outside Up
The three outside up candlestick pattern is a bullish reversal pattern which is
formed at the bottom of the price chart. Three outside up patterns are
formed when the first candle is bearish followed by a long bullish
candle which covers the bearish candle from both sides and lastly, the third
candle opens above the high of the second candle and closes higher.
8. Three Inside Up
The three inside-up candlestick pattern is a bullish reversal pattern that has
three candles. First candle is a bearish one. The small second candle is
bullish. Marking the trend change, the third candle is a strong bullish one.
9. Bullish Kicker
A bullish kicker is a candlestick pattern where a bearish candle is
immediately followed by a strong bullish candle. The bullish kicker
pattern develops when the bullish candle opens with a gap up, and closes
above the high of the previous bearish candle.
10. Piercing Line
The piercing line candlestick pattern is a bullish reversal pattern. A piercing line
pattern is generated when a bullish candle that has opened below the low of
the bearish candle closes above the midpoint of the previous candle.
11. Hammer
A hammer candlestick pattern is a single candlestick pattern that suggests
a potential reversal of the overall bullish trend. A hammer is produced when
a candle has a very short or no body and leaves a long, weak one on
its lower side.
12. Inverted Hammer
The inverted hammer candlestick pattern is a single candle pattern that is
typically formed following a downtrend. The inverted hammer is reminiscent
of the hammer candlestick pattern, but with an upside-down appearance.
13. Bearish Engulfing
A bearish engulfing pattern suggests that market control has lately been
undertaken by sellers. Furthermore indicating that the number of sellers has
exceeded the number of buyers is a bearish engulfing pattern. Seen on the
top of the price chart, this candlestick pattern is thought of as the possible top
of the market.
14. Bearish Harami
A bearish harami pattern is a two-candle pattern. A bearish harami pattern
results from a small body (Red) candle developing after a larger body
(Green). Usually showing a possible bearish trend reversal, this pattern
appears at the top of the price chart.
15. Tweezer Top
The Tweezer top candlestick pattern is a bearish reversal pattern. Tweezer
top pattern occurs when there are two or more candles having identical highs
that mark a horizontal line of resistance.
16. Evening Star
An evening star candlestick pattern is a bearish reversal pattern. Evening
star pattern consists of three candles. The first candle is a robustly
positive one. The second candle is a doji, which indicates both buyer
weakness and the indecision of the market players. A strong bearish candle
that marks the trend change is the third one.
17. Evening Star Doji
An evening star doji candlestick pattern is a bearish reversal pattern.
Evening star doji is made up of three candles. The first candle is a strong
bullish candle which resumes the bullish trend. The second candle is a
doji which represents the indecision of the market participants and also shows
that the buying pressure has slowed down. The third candle is a strong
bearish candle which marks the trend change from bullish to bearish.
18. Bearish Abandoned Baby
A bearish abandoned baby is a pattern that suggests bearish reversal. The
first candle is strongly bullish. The second one opens following a gap and is a
doji. Strong bearish candle that gaps down and indicates a trend change is the
third candle.
19. Three Outside Down
The three-outside-down candlestick pattern is a bearish reversal pattern.
The first candle is bullish. The second candle is a bearish candle that
completely overwhelms the previous bullish candle. The third candle closes
below the low of the second candle.
20. Three Inside Down
The three inside down candlestick pattern is a bearish reversal
pattern which is formed at the top of the price chart. Three inside down
patterns are formed when the first candle is bullish followed by a long
bearish candle that covers the bullish candle from both sides and lastly, the
third candle which breaks and closes below the 2nd candle’s low.
21. Hanging Man
The hanging man candlestick pattern is
a bearish trend reversal pattern. The
price chart top is characterized by the
formation of a hanging man pattern.
The candle’s lower side is characterised
by a lengthy wick, while the upper side
has minimal to no wick.
22. Bearish Kicker
The bearish kicker pattern is a candlestick pattern where a bullish candle is
quickly followed by a strong bearish candle. The bearish kicker pattern
forms when the bearish candle opens gaps down, breaks and closes below the
previous bullish candle’s low.
23. Dark Cloud Cover
The dark cloud cover candlestick pattern is a bearish trend reversal pattern.
A dark cloud cover pattern is formed when a bullish candlestick is followed by a
bearish candle that has opened above the bullish candle’s high but ultimately
closes below the midpoint of its previous candle.
24. Shooting Star
The shooting star candlestick pattern is a single candlestick bearish
reversal pattern. Shooting star is formed with a single candle which has a
long wick at the top and a small or no body. The shooting star pattern is
confirmed after a strong bearish candle follows the shooting star candle.
25. Three Black Crows
The three black crows candlestick pattern is formed when the market
makes three consecutive bearish candles with lower lows. The three
black crows pattern is formed at the top of the price chart right after a bullish
rally.
26. Rising Three
The rising three candlestick pattern is a bullish continuation pattern. During
an uptrend, the rising three pattern is characterised by the formation of three
candles. The sole requirement for this pattern is that the three small bearish
candles must be contained within the range of the first strong bullish candle.
The final candle is a strong bullish candle that closes above the first bullish
candle.
27. Falling Three
The falling three candlestick pattern is a bearish continuation pattern. The
falling three pattern consists of three candles and it forms during a downtrend.
The only condition of this pattern is that the three small bullish candles must
be contained within the range of the first strong bearish candle. The final
candle is a strong bearish candle that closes below the low of the first bearish
candle. This final setup is considered as a confirmation of a downtrend.
28. Tasuki Gap
The Tasuki Gap is a candlestick pattern used in technical analysis to indicate
a potential continuation of a market trend. Tasuki Gap patterns can
appear as either an Upside Tasuki Gap, which signals a bullish continuation
during an uptrend, or a Downside Tasuki Gap, which indicates a bearish
continuation during a downtrend. Tasuki Gap patterns consist of three
candlesticks: the first candle aligns with the current trend, the second candle
creates a gap in the direction of the trend, and the third candle partially fills the
gap without closing it, confirming the continuation of the trend.
29. Mat Hold
The Mat Hold pattern is a candlestick formation that signals a continuation of
the prevailing trend, typically occurring in the middle of an uptrend or
downtrend. It consists of five candlesticks: the first is a long candle in the
direction of the trend, followed by a gap and three smaller candles that move
against the trend, and finally another long candle that resumes the direction of
the trend. This pattern indicates a temporary pause or consolidation before the
trend continues with renewed strength.
30. Inside Bars
The Inside Bar pattern is a candlestick formation that occurs when a smaller
candle is completely contained within the high and low range of the
previous candle. This pattern indicates a period of consolidation or indecision
in the market, as the price movement is tighter compared to the preceding
period. Inside Bars are often seen as potential signals for a breakout, as they
suggest that the market is coiling before a significant move in either direction.
31. Three White Soldiers
The three white soldiers candlestick pattern is formed when the market
makes three consecutive bullish candles with higher closes. The three
white soldiers pattern is formed at the bottom of the price chart after a bearish
rally.
32. Marubozu
A marubozu candlestick pattern has the potential to be both bullish and
bearish. The morubozu candlestick pattern is achieved when a candle opens
at the low or high of the previous candle and closes at the opposite
end without leaving any wicks.
33. Doji
The doji candlestick pattern is characterised by the price of a stock opening
and closing at nearly the same level. Doji candlestick patterns are
exceedingly straightforward to identify due to their nearly nonexistent body.
34. Gravestone Doji
Gravestone doji candlestick pattern indicates a potential bearish trend
reversal. Gravestone doji is generally formed at the top of the price chart.
Traders interpret this pattern as a sign to take a bearish trade in the underlying
stock.
35. Dragonfly Doji
Dragonfly doji candlestick pattern indicates a potential bullish trend
reversal. Dragonfly doji is generally formed at the bottom of the price chart.
Traders interpret this pattern as a signal to take a bullish trade in the
underlying stock.
36. Long Legged Doji
A long legged doji pattern resembles the
indecision between the market
participants. A long legged doji pattern can form at the top of the chart as
well as the bottom of the chart.
37. Bullish Spinning Top
A bullish spinning top candlestick pattern presages a potential trend
reversal from a downtrend to an uptrend. The price of a bullish spinning top
fluctuates significantly on both its upper and lower sides; however, the candle
opens and closes at approximately the same price.
38. Bearish Spinning Top
Bearish spinning top candlestick pattern indicates a potential trend reversal
from uptrend to downtrend. Bearish spinning top experiences wild price
movements on both its upper and lower side. But at the same time, the candle
opens and closes almost at the same price.
39. Tri-Star
The Tri star candlestick pattern is a potential trend reversal pattern. The tri
star pattern can be bearish as well as bullish. If this pattern is formed on
the bottom of the chart, it becomes a bullish pattern and vice versa.
40. Long Wicks
The Long Wick pattern in candlestick charts is characterized by a candlestick
with a long wick, or shadow, extending significantly beyond the body of the
candle. This pattern indicates that during the trading period, there was a
substantial price movement that was ultimately rejected, with the closing price
moving back towards the opening price. Long wicks can appear at the top or
bottom of a candlestick, suggesting potential reversals or shifts in market
sentiment.
Candlestick
Signal Description
Pattern
A larger bullish candle engulfs a smaller bearish candle,
Bullish Engulfing Bullish Reversal
indicating a reversal.
A small bullish candle within the range of a previous larger
Bullish Harami Bullish Reversal
bearish candle.
Two or more candles with matching lows, signaling strong
Tweezer Bottom Bullish Reversal
support.
A three-candle pattern with a bearish, a small-bodied, and a
Morning Star Bullish Reversal
bullish candle.
Morning Star Similar to Morning Star, but the middle candle is a Doji,
Bullish Reversal
Doji indicating indecision.
Bullish A Doji that gaps below a bearish candle and a bullish candle
Bullish Reversal
Abandoned Baby that gap ups after the doji.
A bearish candle followed by a bullish candle that engulfs it,
Three Outside Up Bullish Reversal
and another bullish candle.
A bearish candle, followed by a bullish candle within the first,
Three Inside Up Bullish Reversal
and another bullish candle.
A gap between a bearish and a bullish marubozu, indicating a
Bullish Kicker Bullish Reversal
strong reversal.
A long bearish candle followed by a bullish candle that opens
Piercing Line Bullish Reversal below the close of the bearish candle and closes above the
midpoint of the first.
A small body at the top with a long lower shadow, appearing at
Hammer Bullish Reversal
the bottom of a downtrend.
A small body at the bottom with a long upper shadow,
Inverted Hammer Bullish Reversal
appearing at the bottom of a downtrend.
Bearish A larger bearish candle engulfs a smaller bullish candle,
Bearish Engulfing
Reversal indicating a reversal.
Bearish A small bearish candle within the range of a previous larger
Bearish Harami
Reversal bullish candle.
Bearish Two or more candles with matching highs, signaling strong
Tweezer Top
Reversal resistance.
Bearish A three-candle pattern with a bullish, a small-bodied, and a
Evening Star
Reversal bearish candle.
Bearish Similar to Evening Star, but the middle candle is a Doji,
Evening Star Doji
Reversal indicating indecision.
Bearish Bearish A Doji that gaps above a bullish candle and the bearish candle
Abandoned Baby Reversal that opens with a gap down after the doji.
Three Outside Bearish A bullish candle followed by a bearish candle that engulfs it,
Down Reversal and another bearish candle.
Three Inside Bearish A bullish candle, followed by a bearish candle within the first,
Down Reversal and another bearish candle.
Bearish A small body at the top with a long lower shadow, appearing at
Hanging Man
Reversal the top of an uptrend.
Bearish A gap between a bullish and a bearish marubozu, indicating a
Bearish Kicker
Reversal strong reversal.
Dark Cloud Bearish A long bullish candle followed by a bearish candle which
Cover Reversal opens with a gap up and closes below the midpoint of the first.
Bearish A small body at the bottom with a long upper shadow,
Shooting Star
Reversal appearing at the top of an uptrend.
Three Black Bearish Three consecutive long bearish candles with small wicks,
Crows Reversal indicating strong selling pressure.
Bullish A long bullish candle, three smaller bearish candles, and
Rising Three
Continuation another bullish candle.
Bearish A long bearish candle, three smaller bullish candles, and
Falling Three
Continuation another bearish candle.
A gap followed by a candle in the same direction, indicating
Tasuki Gap Continuation
continuation.
A long candle, three smaller opposite candles, and another long
Mat Hold Continuation
candle in the original direction.
A smaller candle within the range of a previous larger candle,
Inside Bars Continuation
indicating consolidation.
Three White Bullish Three consecutive long bullish candles with small wicks,
Soldiers Continuation indicating strong buying pressure.
A long candle with no wicks, indicating strong momentum in
Marubozu Continuation
the direction of the candle.
A candle with a small body and long wicks, indicating
Doji Indecision
indecision in the market.
A Doji with a long upper shadow, indicating potential reversal
Gravestone Doji Indecision
at the top.
A Doji with a long lower shadow, indicating potential reversal
Dragonfly Doji Indecision
at the bottom.
Long Legged A Doji with long wicks on both sides, indicating high volatility
Indecision
Doji and indecision.
Bullish Spinning A small-bodied candle with wicks on both sides, indicating
Indecision
Top indecision.
Bearish Spinning A small-bodied candle with wicks on both sides, indicating
Indecision
Top indecision.
Three consecutive Doji candles, indicating a strong potential
Tri-Star Indecision
reversal.
Candles with long wicks, indicating rejection of higher or
Long Wicks Indecision
lower prices.