35 Candlestick Chart Patterns

How to Read Candlestick Charts? 35 Types of Candlestick Patterns:

Bullish Reversal Candlestick Patterns:

1. Hammer: A hammer candlestick pattern is a bullish reversal candlestick pattern that appears on price charts of financial instruments like stocks, forex, and futures. It signals a potential reversal of a downtrend and the possibility of an upcoming uptrend.

2. Piercing Pattern: The Piercing Line is a two-candle bullish reversal candlestick pattern. It is formed when the second candle opens lower than the first candle closes but then closes at or above 50% of the first candle’s real body. This pattern is often seen at the bottom of a downtrend, and it suggests that there is a potential for a reversal to the upside.

3. Bullish Engulfing: A bullish engulfing pattern is a two-candle candlestick reversal pattern that signals a potential reversal of a downtrend. It is formed when a small black candlestick is followed the next day by a large white candlestick, the body of which completely overlaps or engulfs the body of the previous day’s candlestick. This pattern suggests that the bears have lost control of the market and that the bulls are taking over.

4. The Morning Star: The Morning Star Pattern is a bullish candlestick pattern that signals a potential reversal in a downtrend. It is formed by three candlesticks:

1. A long black candlestick (bearish engulfing candle)
2. A small doji or spinning top candlestick with a short body and long wicks (indecisive candle)
3. A long white candlestick (bullish engulfing candle)

5. Three White Soldiers: The Three White Soldiers candlestick pattern is a bullish reversal pattern that is typically observed at the end of a downtrend. It consists of three consecutive long-bodied candlesticks that open within the previous candle’s real body and close above the previous candle’s high. The candlesticks should have small or no shadows, and they should all close higher than the previous candle’s close.

6. White Marubozu: The White Marubozu is a Japanese candlestick pattern that indicates strong bullish sentiment in financial markets. It is a large white candlestick with no wicks on either end, meaning that the price opened and closed at the same level. This suggests that there was strong buying pressure throughout the trading period and that the price is likely to continue to move upwards.

7. Three Inside Up: The Three Inside Up pattern is a bullish reversal candlestick pattern that indicates a potential change in trend from downward to upward. It is formed by three consecutive candlesticks:

1. The first candle is a long black candle, indicating a continuation of the downtrend.

2. The second candle is a smaller green candle that is entirely contained within the body of the first candle. This suggests that the selling pressure has started to weaken.

3. The third candle is a green candle that engulfs the bodies of both the first and second candles. This confirms the reversal and signals that the bulls are now in control.

8. Bullish Harami: A bullish harami is a two-candle candlestick pattern that indicates a potential reversal in a downtrend. It is formed by a large black candle (the first candle) followed by a small white candle (the second candle) that is completely engulfed by the black candle. The bullish harami pattern is often seen as a sign of weakness in the downtrend and can be used to signal a potential buying opportunity.

9. Tweezer Bottom: A Tweezer Bottom is a bullish reversal pattern formed by two Japanese candlesticks with matching lows. It appears at the bottom of downtrends and indicates that the selling pressure is weakening. The two candlesticks may be of any type (e.g., bullish or bearish), but they should have identical closing prices.

10. Inverted Hammer: An inverted hammer candle is a type of candlestick pattern that appears in a downtrend and signals a potential bullish reversal. It is characterized by a small body at the bottom of the downtrend with a long upper wick and little or no lower wick. The long upper wick indicates that buyers were able to push prices up during the trading session but were ultimately unable to sustain the rally and sellers drove prices back down to close near the open.

11. Three Outside Up: The Three Outside Up is a three-candle bullish reversal candlestick pattern. It typically occurs at the end of a downtrend, signaling that bullish momentum is taking over and a potential trend reversal is underway.

12. On-Neck Pattern: The on-neck pattern is a two-bar bearish continuation pattern that appears in downtrends. It’s characterized by a long bearish candlestick (the “neck”) followed by a shorter bullish candlestick that opens lower but closes near the neck’s low. This indicates that the bears are still in control and that the downtrend is likely to continue.

Here’s a breakdown of the pattern’s components:

• First candlestick (neck):
  • Long real body (down bar)
  • Small upper and lower shadows
• Second candlestick:
  • Shorter real body (up bar)
  • Gaps down on the open, but closes near the first candle’s low

13. Bullish Counterattack-

Bearish Candlestick Pattern:

14. Hanging man: The Hanging Man is a bearish reversal candlestick pattern that indicates a potential shift in momentum after an uptrend. It’s formed by a single candle with a small real body, a long upper shadow, and little or no lower shadow.

15. Dark cloud cover: The Dark Cloud Cover is a bearish reversal candlestick pattern that indicates a potential shift in momentum from the bulls to the bears. It typically forms at the end of an uptrend and is composed of two candlesticks:

• The first candlestick: This is a bullish candlestick, typically white or green. It represents buying pressure pushing the price higher.
• The second candlestick: This is a bearish candlestick, typically black or red. It opens above the close of the first candlestick and then closes significantly below the midpoint of the first candlestick. This “engulfing” action by the second candlestick is what creates the image of a dark cloud covering the previous day’s gain.

16. Bearish Engulfing: The Bearish Engulfing Pattern is a two-candle candlestick pattern that signals a potential reversal of an uptrend. It consists of a bullish candlestick followed by a bearish candlestick that completely engulfs the bullish candlestick.

17. The Evening Star: The evening star candlestick pattern is a bearish reversal pattern that occurs at the end of an uptrend and signals a potential change in the price direction.

18. Three Black Crows: The Three Black Crows is a bearish candlestick pattern that signals a potential reversal of an uptrend. It’s a powerful indicator used by technical analysts to identify selling opportunities. Here’s a detailed breakdown of the pattern:

19. Black Marubozu: The Black Marubozu is a bearish candlestick pattern in Japanese candlestick charting. It’s a single, long black candle with minimal or no wicks. This means the opening price is at the highest point of the candle, and the closing price is at the lowest point.

20. Three Inside Down: The Three Inside Down is a powerful bearish reversal pattern formed in candlestick charts, indicating a potential shift from an uptrend to a downtrend. It’s a three-candle formation often interpreted as bullish exhaustion followed by bearish confirmation.

21. Bearish Harami:

22. Shooting Star: A Shooting Star is a bearish reversal candlestick pattern that typically occurs at the top of uptrends. It is a single-candle pattern that is characterized by a long upper shadow, a small real body, and little or no lower shadow. The upper shadow should be at least two times the size of the real body.

23. Tweezer Top: The Tweezer Top candlestick pattern is a bearish reversal pattern that signals the potential end of an uptrend. It consists of two candlesticks with the same high, forming a “tweezers” shape. The first candle is a bullish candlestick, and the second is a bearish candlestick with a long upper shadow.

24. Three Outside Down: The Three Outside Down is a classic bearish candlestick pattern that signals a potential reversal of an uptrend. It’s considered a reliable indicator, but interpreting it effectively requires understanding its features and limitations.

25. Bearish Counterattack-

Continuation Candlestick Patterns:

26. Doji: The Doji candlestick pattern is a unique pattern that can signal indecision in the market. It is formed when the opening and closing prices of a security are equal or very close to equal, resulting in a short real body (the body of the candlestick). This creates a cross-shaped appearance, which is why it is sometimes referred to as a “star” pattern.

27. Spinning Top: A Spinning Top is a single candlestick pattern that signals indecision or uncertainty in the market. It’s characterized by a short real body (the portion of the candle representing the difference between the open and close prices) positioned roughly in the middle of long upper and lower wicks. This indicates that the price fluctuated significantly during the trading session but ultimately closed near its opening price.

28. Falling Three Methods:

29. Rising Three Methods:

30. Upside Tasuki Gap:

31. Downside Tasuki Gap:

32. Mat-Hold:

33. Rising Window:

34. Falling Window:

35. High Wave: