Boost Your Trading Success
Candlestick Patterns
Candlestick Patterns
A Comprehensive Guide to Boost Your Trading Success
What is a candlestick?
A candlestick is a way of displaying information about an asset’s price movement. Candlestick charts are one of the most popular components of technical analysis, enabling traders to interpret price information quickly and from just a few price bars.
Candlestick Patterns
Candlestick Patterns
Candlestick Patterns
Single candlestick patterns
Hammer
bullish reversal
1. Small real body
2. Real body is at the top end of the session’s range
3. Very small or no upper shadow
4. The lower shadow should be at least twice the
height of the real body
5. The color of the real body is not important
6. Market must be in a downtrend
Hanging man
bearish reversal
1. Small real body
2. Real body is at the top end of the session’s range
3. Very small or no upper shadow
4. The lower shadow should be at least twice the
height of the real body
5. The color of the real body is not important
6. Market must be in an uptrend
Shooting Star
bearish reversal
1. Small real body
2. Real body is at the bottom end of the session’s range
3. Very small or no lower shadow
4. The upper shadow should be at least twice the
height of the real body
5. The color of the real body is not important
6. Market must be in an uptrend
Inverted Hammer
bullish reversal
1. Small real body
2. Real body is at the bottom end of the session’s range
3. Very small or no lower shadow
4. The upper shadow should be at least twice the
height of the real body
5. The color of the real body is not important
6. Market must be in a downtrend
Dragonfly Doji
bullish reversal
1. No (or very small) real body
2. Open and close are at (or very close to) the top of
the candle
3. No (or very small) upper shadow
4. Long lower shadow
5. Market must be in a downtrend
Gravestone Doji
bearish reversal
1. No (or very small) real body
2. Open and close are at (or very close to) the bottom
of the candle
3. No (or very small) lower shadow
4. Long upper shadow
5. Market must be in an uptrend
Long-legged Doji
bullish reversal or bearish reversal
1. No (or very small) real body
2. Open and close are at (or very close to) the middle
of the candle
3. Long shadows, equal in length
4. Market can be either in an uptrend or a downtrend
Bullish Marubozu
Bullish continuation (or reversal)
1. Long real body and no shadows
2. The candle must be green
Bearish Marubozu
Bearish continuation (or reversal)
1. Long real body and no shadows
2. The candle must be red
Candlestick Patterns
Two candlestick patterns
Bullish Engulfing
Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend
3. The first candle must be red
4. The second candle must be green
5. The real body of the second candle surrounds the
real body of the first
6. The position of the shadows, on either candles,
doesn’t matter
Bearish Engulfing
Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend
3. The first candle must be green
4. The second candle must be red
5. The real body of the second candle surrounds the
real body of the first
6. The position of the shadows, on either candles,
doesn’t matter
Tweezers Top
Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend
3. The first and the second candle have the same high
Tweezers Bottom
Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend
3. The first and the second candle have the same low
Dark Cloud Cover
Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend
3. The first candle must be green
4. The second candle must be red
5. The market gaps higher on the open of the second
candle
6. The real body of the second candle must close into
the body of the first candle
Piercing Pattern
Bullish reversal
1. Two candle pattern
2. Market must be in a downtrend. The first candle must be red
4. The second candle must be green
5. The market gaps lower on the open of the second
candle
6. The real body of the second candle must close into
the body of the first candle
Bullish Harami
bullish reversal
1. Two candle pattern
2. Market must be in a downtrend
3. The first candle must be red
4. There’s a gap high between the two candles
5. The second candle has a very small real body,
the color is not important
Bearish Harami
Bearish reversal
1. Two candle pattern
2. Market must be in an uptrend
3. The first candle must be green
4. There’s a gap low between the two candles
5. The second candle has a very small real body,
the color is not important
Candlestick Patterns
Three candlestick patterns
Rising three method
Bullish continuation
1. Composed of 5 candles
2. The market must be in an uptrend
3. The 1st and the 5th candle must be long green candles
4. The three candles in the middle must be small
candles, ideally dojis or small red candles.
Falling three method
Bearish continuation
1. Composed of 5 candles
2. The market must be in a downtrend
3. The 1st and the 5th candle must be long red candles
4. The three candles in the middle must be small
candles, ideally dojis or small green candles.
Master Candle
Bullish or Bearish continuation
1. Composed of 5 or more candles (max 11)
2. It is like a falling or rising three method with more
candles in the second phase
