A Beginner’s Guide to Candlestick

Patterns
Your technical analysis cheat sheet to all types of chart patterns
Co-authored by Andrew Lokenauth and Eric McClure
Last Updated: February 19, 2026 Fact Checked

What is a candlestick pattern? | Single Candles | Double Candles | Triple Candles | More Candles
| Confirmation Patterns | Are candlestick patterns accurate? | Video | Tips | Warnings

There are two basic forms of information that traders rely on: fundamental analysis (FA),
the study of a company’s financial books and ratios, and technical analysis (TA), the study
of a stock’s price behavior. With FA, the aim is to identify undervalued companies that
should grow in the future, while TA aims to predict future price action based on past
behavior. To do this, traders track candlestick patterns. In this article, we’ll explain how to
read candles and cover the 37 most essential patterns that every active trader and chartist
needs to know.

Common Candlestick Patterns Cheat Sheet

What is a candlestick pattern?

To understand candle patterns, you must know how to read a

candle.
Candlesticks themselves contain a wealth of information. Ever since they were
invented in the 1700s by Japanese rice traders, they’ve helped investors and
traders everywhere visualize price action. Here are the components of a candle:[1]
Duration. This one isn’t actually on the candle, but the duration of your chart
determines the duration of the candle, so it’s important to keep in mind. For
example, on a weekly chart, a single candle represents one week. On a daily
chart, a candle represents one day, etc.
 Body. The body of the candle refers to the filled-in blocky part that makes up
most of the candle itself.
The top and bottom of a candle represent where the price started and
closed.
Color. The color of the candle determines whether the price went up or down.
A red candle started the trading period at the top of the candle and closed
the trading period at the bottom.
A green candle is the opposite. The bottom of the candle is where trading
started and the trading period closed at the top of the body.
Size. The size tells you how far the price moved from open to close.
A small candle represents relatively little price movement.
A large candle represents a lot of price movement.
Wick. The wick is the little line that pops out of the top and bottom of the
candle’s body. Wicks represent the peaks of that trading period’s price level.
A short wick means the price didn’t move very far away from the opening
or closing price (depending on the color).
A long wick means the price moved well outside of the range of the open
or close (depending on the color).
Advertisement

Single Candlestick Patterns

Doji
A doji has basically no body, indicating the open and close price were basically
identical. The size of the wick may indicate how much volatility occurred over the
session, but this neutral candle often indicates uncertainty (or lack of trading
interest).[2]
Bullish or bearish? Neutral.
Dragonfly doji
A dragonfly doji refers to a doji with an extremely long bottom-side wick, indicating
there was a of intrasession price action below the open and close.
Bullish or bearish? Bullish.
Gravestone doji
Also known as the inverted dragonfly, this doji has a long wick above the body.
This is universally noted as bearish, since it means there was a larger attempt for
the price to move higher that ultimately failed.
Bullish or bearish? Bearish.
Hammer
A hammer is always green. It has a small body with a wick sticking out through the
bottom of the candle. That wick may be relatively short or kind of on the longer
side.[3]
Bullish or bearish? Bullish.
Inverted hammer
People assume the inverted hammer is bearish since it’s the “opposite” of a
hammer, but it’s not. The green body with the wick on top indicates the market is
trying to push the price higher, even if there might have been a return to lower
levels heading into close.
Bullish or bearish? Bullish.
Hanging man
The hanging man looks identical to the hammer except it can be red or green. The
key with the hanging man is when it appears. It only counts as a hanging man
candle if it appears after a dedicated uptrend.
Bullish or bearish? Bearish.
The hanging man is often considered a potential reversal indicator, meaning
that it’s possible the uptrend will become a downtrend.
Bullish spinning top
Nicknamed the spinning top after its shape (it looks kind of like a children’s top),
the bullish spinning top has a small, green body and a wick sticking out of both
ends. It can only appear after a prolonged downtrend.
Bullish or bearish? Bullish. Also, a reversal indicator.
Bearish spinning top
The bearish spinning top is the inverse of a bullish spinning top—it’s just a red
body and it appears after a prolonged uptrend.
Bullish or bearish? Bearish. Also, a reversal indicator.
Bullish Marubozu
The bullish Marubozu stands out prominently on charts. It's got a very large body
and no wick on either side (or an extremely tiny wick). The bullish Marubozu is a
huge sign that the market is moving with conviction in one direction.[4]
Bullish or bearish? Bullish.
Bearish Marubozu
 The only difference between the bullish and the bearish Marubozu is the color of
the body. The bullish version is green; the bearish version is red.[5]
Bullish or bearish? Bearish.
Advertisement

Double Candlestick Patterns

Bullish kicker
The bullish kicker occurs when a red candle is followed immediately by a green
candle with a gap between the two.[6]
Bullish or bearish? Bullish.
What is a gap? A gap refers to a specific phenomenon that occurs between
candlesticks. Normally, one candle overlaps with the next one, indicating that
the price is moving in increments. A gap occurs when there’s open space
separating one candle and another. This occurs when the price jumps way up
(or way down) between sessions.
Bearish kicker
A bearish kicker is the opposite of a bullish kicker—a green candle is followed by
a red candle that gaps down.[7]
Bullish or bearish? Bearish.
Bullish engulfing
A bullish engulfing candle occurs when a green candle follows a red candle. The
“engulfing” part is where the green candle is bigger than the red candle in terms of
the body. The green candle has a lower low and a higher high.[8]
Bullish or bearish? Bullish. This is also considered a reversal pattern.
Bearish engulfing
The bearish engulfing candle occurs when a green candle is completely engulfed
by a larger red candle.
Bullish or bearish? Bearish. This is widely accepted as a reversal pattern.
Piercing line
The piercing line is one of the more difficult patterns to spot just because it seems
kind of innocuous at first. It requires a long red candle with short wicks, followed
by a smaller green candle that punctures the base of the previous candle’s
bottom.[9]
 Bullish or bearish? Bullish. This is also considered a reversal pattern.
Dark cloud cover
Dark cloud cover is the opposite of a piercing line—a green candle with a large
body is followed by a red candle with a smaller body. The top of the red candle
must be higher than the top of the green candle, and the bottom of the red candle
must hit roughly around the midpoint of the green candle.[10]
Bullish or bearish? Bearish. This is also a reversal pattern.
Tweezer bottom
The tweezer bottom is easy to spot by the two long wicks that stop at the same
price level. This pattern also must occur at the bottom of a downtrend, and the two
candles must have relatively similar tops. The first candle must be red and the
second candle must be green.[11]
Bullish or bearish? Bullish. This is also considered to be a reversal pattern.
Tweezer top
The tweezer top is the inverse of the tweezer bottom. Two long wicks must sit at
the same price level, the first candle must be green, and the second candle must
be red. Also, this pattern only counts if it appears at the top of an uptrend.[12]
Bullish or bearish? Bearish. This is a reversal pattern.
Bullish Harami
The bullish Harami is noted by its large red candle, followed by an engulfed green
candle. The green candle must be small, and there must be a wick hanging from
the bottom of the candle.[13]
Bullish or bearish? Bullish.
Bearish Harami
The bearish Harami requires a large green candle followed by an engulfed red
candle with a tiny wick on top.[14]
Bullish or bearish? Bearish.
Advertisement

Triple Candlestick Patterns

Morning star
The morning star pattern is considered a classic reversal pattern. It is noted by a
substantial red candle, a smaller green candle that gaps down, and a larger green
 candle that gaps up. The last candle must close higher than the midpoint of the
first candle.[15]
Bullish or bearish? Bullish.
Bullish abandoned baby
If you see a substantial red candle and a gap down to a green doji followed by a
gap up and a huge green candle, you’re looking at a bullish abandoned baby. You
can remember this pattern by noting that the tiny doji looks like it has been
“abandoned” by the red and green “parents” above it.[16]
Bullish or bearish? Bullish.
Bearish abandoned baby
The bearish abandoned baby is the reverse of the bullish abandoned baby. The
first candle is green, the “baby” will be a doji floating above, and the last candle
below will be red.[17]
Bullish or bearish? Bearish.
Three white soldiers
Three white soldiers is pretty easy to remember because it's just three green
candles. The candles must all be green and either matching or drifting
upwards.[18]
Bullish or bearish? Bullish. This is considered one of the more consistent
patterns in TA.
Three black crows
Three black crows is the opposite of three white soldiers. You’ve got three red
candles with large bodies all matching levels or slowly drifting downward.[19]
Bullish or bearish? Bearish.
Three line strike
Three line strike is actually a four-candle pattern. It is sort of an extension of the
three black crows or three white soldiers and is considered a reversal pattern. It
occurs when a large engulfing candle overtakes the three previous candles of a
different color. So, with three white soldiers, you’d need a large red candle to
overtake the previous three. With three black crows, you’d need a giant green
candle to overtake the previous three.[20]
Bullish or bearish? Depends on the trend.
Advertisement

Larger Patterns
Cup and handle
The cup and handle is a larger pattern consisting usually of 20+ candles. It
appears kind of like an old school coffee cup: there’s a large downtrend that
smooths out at the bottom of the “cup.” Then, there’s an uptrend that matches the
downtrend symmetrically. At the end of the “cup,” a sharp downturn marks the
“handle,” which is often followed by a new bullish trend.[21]
Bullish or bearish? Bullish.
Double top
A double top simply refers to any extended series of candles where the peak of
the uptrend stops at a specific price level twice. These are typically easy to spot
because the wicks will poke out from the chart and touch the same price level
twice.[22]
Bullish or bearish? Bearish.
Double bottom
The inverse of the double top is the double bottom. It’s any pattern where two
wicks in a channel touch down at the same price level.[23]
Bullish or bearish? Bullish.
Wedge
Wedges are a type of channel. They are noted by an upward or downward trend
where the channel slowly feeds down into a narrower point. As the wedge
tightens, it gets closer to a decision area where the trend can break up or
down.[24]
Bullish or bearish? Neutral. The shape of the wedge can help you identify
confirmations and reversals, but the wedges themselves aren’t bearish or
bullish.
What is a channel? A channel is sort of like a lane on a road. It refers to two
lines that contain all of the price action in an area. The edges of a channel are
often the source of resistance or support points.
Flag
Flags, also known as pennants, are a kind of extremely tight wedge that often
appears after large moves up or down. The shape of the flag is more of a
triangular boat flag as opposed to a standard national flag.[25]
Bullish or bearish? Neutral. Flags don’t signal anything other than decision
points where investors and traders are unsure of what to do.
 Advertisement

Confirmation Patterns

Rising window
The rising window is a two-candle confirmation signal that occurs when a candle
gaps up past a support or resistance line following an uptrend.[26]
Bullish or bearish? Bullish.
What is a confirmation? In technical analysis, a confirmation refers to any
event which affirms the previous signal. So, take three white soldiers—a
classic bullish signal. If the three white soldiers sit on a resistance line and
then a rising window breaks that line, it is considered a confirmation—the
bullish trend is set to continue.
Falling window
The falling window (sometimes casually and incorrectly called a falling dagger) is
the reverse of a rising window. It’s a two-candle confirmation that breaks a trend
or support/resistance line by gapping down past it.[27]
Bullish or bearish? Bearish.
Three inside up
Following a period of consolidation or a downward trend, you can spot a reversal
confirmation with the three inside up pattern. This is a large red candle, a smaller
green candle that sits around the base of the first candle, and then a green candle
rising above the first candle's high.[28]
Bullish or bearish? Bullish.
Three inside down
Three inside down is the bearish version of the three inside up. A large green
candle is followed by a rising red candle, then a red candle that breaks the
previous low of the initial green candle.[29]
Bullish or bearish? Bearish.
Three outside up
Three outside up is a bullish confirmation signal that requires a red candle, an
engulfing green candle, and a third green candle with a midpoint higher than the
top of the previous candle.[30]
Bullish or bearish? Bullish.
 Three outside down
Three outside down is the reverse of the three outside up. A green candle is
engulfed by a large red candle, then there’s a third red candle trending down and
passing the base of the engulfing candle.
Bullish or bearish? Bearish.
Advertisement

Does reading candlestick patterns really work?

The answer is “kind of,” but this is more of an art than a science.
No technical analysis method (including candlestick patterns) is 100% accurate.
To put it simply, you cannot predict future prices based on past prices. However,
when integrated with other trading strategies, TA can be a helpful tool to help
affirm or refute a thesis for a trade. On top of that, studies have shown that mutual
funds and hedge funds that incorporate TA have (on aggregate) slightly
outperformed their peers.[31] The TLDR here is that TA can be helpful, but it’s not
an exact science.
Why TA patterns can be accurate:
Every active trader knows these patterns. That can create some self-
fulfilling prophecies as traders universally follow one another.
A lot of patterns just play into probability. If a stock breaks down and you
see something like the three black crows, the odds more red is on the
horizon are high.
Why TA patterns can be inaccurate:
Price action isn’t the only thing driving price action. Stock news, currency
failures, macro variables, beta drift, etc.---none of these factors care about
candles. This is why things like Bitcoin are such popular trading vehicles—
there is no exterior element to guide price action.
The less efficient a market is, the less likely active traders are to look for
patterns to trade.[32]
Any trading strategy that consistently beats the market will eventually
become unprofitable as other traders latch on to the same strategy, and
people have an easier time predicting reversals.

EXPERT TIP
 ANDREW LOKENAUTH
Finance Executive

You make money with candlestick charts based on trends and patterns.
So, charting is based on data and patterns over time. You would need to
learn the different types of patterns, and then once you learn them, you'll be
better at executing when and how to trade.

Tips

The most infamous investor of all time, Warren Buffett, famously never used any
kind of technical analysis. If this kind of active trading doesn’t vibe with you, don’t
sweat it. There are tons of investors and traders (notably value investors) who
succeed in financial markets without TA.[33]

Advertisement

Warnings

Only 3% of active day traders make a profit.[34] If you are going to incorporate TA
into your trading or investing strategy, you’re likely best off using candlestick
patterns to identify entries, exits, or key price areas where you may want to
adjust your portfolio holdings. You will likely lose money trying to actively trade
markets on a short time frame.
Advertisement
References

1. [Link]
markets/japanese-candlestick/
2. [Link]
3. [Link]
sticks-c296efd29100
4. [Link]
patterns/marubozu-candlestick-pattern/
5. [Link]
patterns/marubozu-candlestick-pattern/
6. [Link]
7. [Link]
8. [Link]
9. [Link]
10. [Link]
11. [Link]
12. [Link]
13. [Link]
14. [Link]
15. [Link]
16. [Link]
17. [Link]
18. [Link]
19. [Link]
black-crows-chart-pattern/
20. [Link]
in-trading/
21. [Link]
know-190514
22. [Link]
know-190514#Double_top
23. [Link]
know-190514
24. [Link]
know-190514#Wedges
25. [Link]
know-190514#Pennant_or_flags
26. [Link]
27. [Link]
28. [Link]
patterns/
29. [Link]
patterns/
30. [Link]
to-identify-and-trade-them/
31. [Link]
32. [Link]
33. [Link]
these-3-patterns-prove-why-hes-wrong-611f948aac4b
34. [Link]
Advertisement