Decoding Candlesticks: The Hidden Truth Behind
Deriv Synthetic Indices
– By Edmund_Ke, CEO of DNA Dollars
Welcome to “Decoding Candlesticks: The Hidden Truth Behind Deriv Synthetic Indices”. I'm
Edmund_Ke, CEO of DNA Dollars, and over the years, I’ve cracked the silent language of
candlesticks — especially in the volatile and highly rewarding world of Deriv Synthetic
Indices.
This isn’t your average trading guide filled with recycled information. What you’re about to read
is built from live market experience, countless chart hours, and deep psychological pattern
recognition.
Inside, I’ll expose the key candlestick patterns, mindset shifts, and trading secrets that have
turned everyday traders into market snipers. Whether you’re a beginner or already deep in the
game, this book will shift how you read charts and approach trades — permanently.
Let’s decode the markets together. The secret is in the candle.
Single Candle Patterns (1-Bar Clues)
Pattern Signal Cheat Code
Indecision / At key levels = Market is confused. Wait for the next
Doji
Reversal candle confirmation.
Appears at bottom → Price about to bounce. Best with
Hammer Bullish Reversal
volume.
Shooting Star
Bearish Reversal Appears at top → Bulls are weak. Expect drop.
Inverted
Bullish Hint Weak confirmation. Needs follow-up candle.
Hammer
Double Candle Patterns (2-Bar Power)
Pattern Signal Cheat Code
Bullish Engulfing Strong Second candle eats the first = Buyers take over. Use at
Buy support.
Bearish Engulfing Strong
Second red candle swallows green. Expect dump.
Sell
Two equal lows = Rejection of downside. High bounce
Tweezer Bottom Bullish
potential.
Pattern Signal Cheat Code
Tweezer Top Bearish Two equal highs = Rejection of upside. Ready to drop.
Triple Candle Patterns (3-Bar Confirmation)
Pattern Signal Cheat Code
Red → Doji → Green. Entry on the third candle.
Morning Star Bullish Reversal
Found at bottoms.
Evening Star Bearish Reversal Green → Doji → Red. Found at tops.
Three White Soldiers Bullish Three strong greens = uptrend incoming. Confirm
Momentum with volume.
Three Black Crows Bearish Three strong reds = downtrend confirmed. Don't
Momentum fight it.
Continuation Patterns – Trend Riders
Pattern Signal Cheat Code
Small downward channel after impulse. Break up =
Bullish Flag Uptrend pause
reentry.
Downtrend
Bearish Flag Small upward channel. Break down = continuation.
pause
Rising Three / Falling Momentum 1 big candle, 3 small opposite, 1 big in same direction
Three builds = Boom incoming.
Bonus Pattern Recognition Wisdom
• Wicks = Lies – Long wicks show rejection. Use them to sniff out traps.
• Body > Wick – Strong body candles carry more conviction.
• Confluence = Power – Combine candle + support/resistance + indicator.
Pattern Names & Meanings
Single Candle Patterns
Symbolic Look (Text-
Pattern Name Meaning / Cheat Code
Style)
+
Indecision. Market is undecided. Wait for
Doji
confirmation.
┐
Bullish reversal at bottom. Buyers rejecting
Hammer
lower prices.
┌
Bullish signal. Needs confirmation. Potential
Inverted Hammer
reversal.
Shooting Star ┌ Bearish reversal at top. Sellers rejecting highs.
o
Low conviction. Could signal reversal or
Spinning Top
continuation.
Marubozu (Full █
Strong conviction. No wicks = momentum in
Body) direction.
Double Candle Patterns
Pattern Name Pattern Description Meaning / Cheat Code
Bullish
Small red → Big green Reversal up. Buyers take full control.
Engulfing
Bearish
Small green → Big red Reversal down. Sellers dominate.
Engulfing
Tweezer Bullish reversal. Support tested and
Two equal lows ( )
Bottom held.
Bearish reversal. Resistance tested and
Tweezer Top Two equal highs ( )
held.
Harami Reversal hint. Momentum weakening.
Big red → Small green inside
(Bullish) Needs confirmation.
Harami
Big green → Small red inside Same as above, but bearish.
(Bearish)
Red candle → Green opens below and
Piercing Line Strong reversal up from bottom.
closes halfway up
Dark Cloud Green → Red opens above, closes
Strong reversal down from top.
Cover halfway down
Triple Candle Patterns
Pattern Name Pattern Description Meaning / Cheat Code
Morning Star Red → Doji → Big Green Bullish reversal at the bottom.
Evening Star Green → Doji → Big Red Bearish reversal at the top.
Pattern Name Pattern Description Meaning / Cheat Code
Three White 3 consecutive strong green Bullish momentum. Trend
Soldiers candles continuation.
Three Black Crows 3 strong red candles after uptrend Bearish trend beginning.
Green → 3 small reds → Big
Rising Three Bullish continuation after pullback.
green
Falling Three Red → 3 small greens → Big red Bearish continuation after pullback.
Special Notes (Cheat Codes)
• Always check for confluence: A candlestick pattern near support/resistance or
trendlines is 10x more powerful.
• Look for volume confirmation when possible: A strong engulfing pattern with volume
= sniper entry.
• Don't trade a pattern in isolation — combine with structure, trend direction, and
momentum indicators.
• Check on the ca