Most Powerful Candlestick Patterns
Candlestick patterns are like building blocks in understanding how the stock market behaves and how prices might change. Knowing about these patterns can really help you make smarter decisions when trading.
I. Introduction to 35 Candlestick Patterns
Candlestick patterns are visual representations of price movements within a specific time frame. Each candlestick represents the opening, closing, high, and low prices for that period.
The body of the candlestick is the difference between the opening and closing prices, while the wicks or shadows represent the price range.
II. Bullish Candlestick Patterns
A bullish candlestick pattern is essentially a visual signal that appears on a price chart, indicating a potential upward momentum or trend in the market. It’s like a green light for traders, suggesting that the price of the asset is likely to go up.
Traders use these patterns to time their entry into the market with the goal of capitalizing on the anticipated price increase.
Bullish Single Candlestick Patterns:
Hammer: A single candlestick pattern characterized by a small body and a long lower wick, signaling a potential bullish reversal after a downtrend.
Inverted Hammer: Another single candlestick pattern with a small body and a long upper wick, indicating a potential bullish reversal after a downtrend.
Black Marubozu: A single candlestick pattern characterized by a long black body with no shadows, representing a strong bearish sentiment.
White Marubozu: A single candlestick pattern characterized by a long white body with no shadows, representing a strong bullish sentiment
Bullish Double Candle Patterns:
Bullish Engulfing: A two-candle pattern where a small bearish candle is followed by a larger bullish candle that engulfs the previous one, suggesting a potential trend reversal to the upside.
Bullish Piercing Pattern: A two-candle pattern starting with a bearish candle followed by a larger bullish candle that opens below the previous day’s low and closes more than halfway into the prior bearish candle.
Bullish Counterattack: A two-candle pattern starting with a bearish candle, followed by a larger bullish candle that engulfs the entire range of the previous bearish candle.
Tweezer Bottom: A two-candle pattern occurring after a downtrend, characterized by two consecutive bearish candles with similar lows, suggesting potential support and a bullish reversal.
Mat Hold: A five-candle pattern suggesting a continuation of a bullish trend. It begins with a bullish candle followed by a bearish candle, a long bullish candle, a small bullish or bearish candle, and ends with another bullish candle.
Bullish Triple Candle-Sticks Pattern:
Morning Star Pattern: A three-candle pattern starting with a bearish candle, followed by a small indecisive candle (often a doji), and then a bullish candle, indicating a potential bullish reversal.
Three White Soldiers: A bullish formation consisting of three consecutive long bullish candles. Each candle closes higher than the previous one, suggesting a strong potential upward movement.
Rising Three Methods: A five-candle pattern signaling a continuation of the current bullish trend. It starts with a long bullish candle, followed by three smaller bearish candles, and ends with another long bullish candle.
Upside Tasuki Gap: A three-candle pattern involving a bullish candle, a gap up, a bearish candle, and finally another bullish candle that opens within the range of the previous bearish candle.
III. Bearish Candlestick Patterns
A bearish candlestick pattern is a visual cue on a price chart that suggests a potential downward momentum or trend in the market. It’s akin to a red light for traders, indicating that the price of the asset is likely to decrease. Traders pay close attention to these patterns to time their entry into the market, aiming to profit from the expected price decline.
Single Candle Patterns:
Hanging Man: A single candlestick pattern resembling a hanging man, signaling a potential bearish reversal after an uptrend. Learn more about Hanging Man Candlestick
Shooting Star Pattern: A single candlestick pattern characterized by a small body and a long upper wick, suggesting a potential bearish reversal.
Bearish Engulfing: A two-candle pattern where a small bullish candle is followed by a larger bearish candle that engulfs the previous one, indicating a potential trend reversal to the downside.
Black Marubozu: A single candlestick pattern characterized by a long black body with no shadows, representing a strong bearish sentiment.
Double Candle Patterns:
Evening Star Pattern: A three-candle formation indicating a potential bearish reversal. It starts with a bullish candle, followed by a small indecisive candle and ends with a bearish candle.
Dark Cloud Cover: A two-candle pattern starting with a bullish candle followed by a larger bearish candle that opens above the previous day’s high and closes more than halfway into the prior bullish candle.
Bearish Harami: A two-candle pattern. The first candle is a large bullish one, followed by a smaller bearish candle that is entirely within the range of the bullish candle. This pattern indicates a potential bearish reversal.
Bearish Counterattack: A two-candle pattern starting with a bullish candle, followed by a larger bearish candle that engulfs the entire range of the previous bullish candle.
On-Neck Pattern: A two-candle pattern where the first day has a long black body followed by a second day with a small body that closes slightly above the previous day’s low.
Triple Candle Patterns:
Three Black Crows: A bearish formation consisting of three consecutive long bearish candles. Each candle closes lower than the previous one, suggesting a strong potential downward movement.
Three Inside Down: A bearish reversal pattern. It consists of a bullish candle, a smaller bearish candle that is completely within the range of the previous candle, and a larger bearish candle.
Three Outside Down: A three-candle pattern. It starts with a bullish candle, followed by a larger bearish candle that completely engulfs the previous bullish candle, and then another bearish candle.
Neutral Candlestick Pattern
A neutral candlestick pattern doesn’t strongly indicate either a bullish or bearish trend. It’s like a yellow light, suggesting caution and indicating that the market is uncertain or indecisive about its direction. Traders look at these patterns to assess the market’s stability or potential upcoming change in trend.
Single Candle Patterns:[/b
Doji: A single candlestick pattern with a small body, indicating market indecision. It suggests a potential trend reversal, whether bullish or bearish.
Spinning Top: A single candlestick pattern with a small body and long upper and lower wicks, signaling market indecision and potential trend reversal.
High Wave: A single candlestick pattern characterized by a long upper and lower wick relative to the body, suggesting high market volatility and uncertainty.
Double Candle Patterns:
Tweezer Top: A two-candle pattern occurring after an uptrend, characterized by two consecutive bullish candles with similar highs, suggesting potential resistance and a bearish reversal
I. Introduction to 35 Candlestick Patterns
Candlestick patterns are visual representations of price movements within a specific time frame. Each candlestick represents the opening, closing, high, and low prices for that period.
The body of the candlestick is the difference between the opening and closing prices, while the wicks or shadows represent the price range.
II. Bullish Candlestick Patterns
A bullish candlestick pattern is essentially a visual signal that appears on a price chart, indicating a potential upward momentum or trend in the market. It’s like a green light for traders, suggesting that the price of the asset is likely to go up.
Traders use these patterns to time their entry into the market with the goal of capitalizing on the anticipated price increase.
Bullish Single Candlestick Patterns:
Hammer: A single candlestick pattern characterized by a small body and a long lower wick, signaling a potential bullish reversal after a downtrend.
Inverted Hammer: Another single candlestick pattern with a small body and a long upper wick, indicating a potential bullish reversal after a downtrend.
Black Marubozu: A single candlestick pattern characterized by a long black body with no shadows, representing a strong bearish sentiment.
White Marubozu: A single candlestick pattern characterized by a long white body with no shadows, representing a strong bullish sentiment
Bullish Double Candle Patterns:
Bullish Engulfing: A two-candle pattern where a small bearish candle is followed by a larger bullish candle that engulfs the previous one, suggesting a potential trend reversal to the upside.
Bullish Piercing Pattern: A two-candle pattern starting with a bearish candle followed by a larger bullish candle that opens below the previous day’s low and closes more than halfway into the prior bearish candle.
Bullish Counterattack: A two-candle pattern starting with a bearish candle, followed by a larger bullish candle that engulfs the entire range of the previous bearish candle.
Tweezer Bottom: A two-candle pattern occurring after a downtrend, characterized by two consecutive bearish candles with similar lows, suggesting potential support and a bullish reversal.
Mat Hold: A five-candle pattern suggesting a continuation of a bullish trend. It begins with a bullish candle followed by a bearish candle, a long bullish candle, a small bullish or bearish candle, and ends with another bullish candle.
Bullish Triple Candle-Sticks Pattern:
Morning Star Pattern: A three-candle pattern starting with a bearish candle, followed by a small indecisive candle (often a doji), and then a bullish candle, indicating a potential bullish reversal.
Three White Soldiers: A bullish formation consisting of three consecutive long bullish candles. Each candle closes higher than the previous one, suggesting a strong potential upward movement.
Rising Three Methods: A five-candle pattern signaling a continuation of the current bullish trend. It starts with a long bullish candle, followed by three smaller bearish candles, and ends with another long bullish candle.
Upside Tasuki Gap: A three-candle pattern involving a bullish candle, a gap up, a bearish candle, and finally another bullish candle that opens within the range of the previous bearish candle.
III. Bearish Candlestick Patterns
A bearish candlestick pattern is a visual cue on a price chart that suggests a potential downward momentum or trend in the market. It’s akin to a red light for traders, indicating that the price of the asset is likely to decrease. Traders pay close attention to these patterns to time their entry into the market, aiming to profit from the expected price decline.
Single Candle Patterns:
Hanging Man: A single candlestick pattern resembling a hanging man, signaling a potential bearish reversal after an uptrend. Learn more about Hanging Man Candlestick
Shooting Star Pattern: A single candlestick pattern characterized by a small body and a long upper wick, suggesting a potential bearish reversal.
Bearish Engulfing: A two-candle pattern where a small bullish candle is followed by a larger bearish candle that engulfs the previous one, indicating a potential trend reversal to the downside.
Black Marubozu: A single candlestick pattern characterized by a long black body with no shadows, representing a strong bearish sentiment.
Double Candle Patterns:
Evening Star Pattern: A three-candle formation indicating a potential bearish reversal. It starts with a bullish candle, followed by a small indecisive candle and ends with a bearish candle.
Dark Cloud Cover: A two-candle pattern starting with a bullish candle followed by a larger bearish candle that opens above the previous day’s high and closes more than halfway into the prior bullish candle.
Bearish Harami: A two-candle pattern. The first candle is a large bullish one, followed by a smaller bearish candle that is entirely within the range of the bullish candle. This pattern indicates a potential bearish reversal.
Bearish Counterattack: A two-candle pattern starting with a bullish candle, followed by a larger bearish candle that engulfs the entire range of the previous bullish candle.
On-Neck Pattern: A two-candle pattern where the first day has a long black body followed by a second day with a small body that closes slightly above the previous day’s low.
Triple Candle Patterns:
Three Black Crows: A bearish formation consisting of three consecutive long bearish candles. Each candle closes lower than the previous one, suggesting a strong potential downward movement.
Three Inside Down: A bearish reversal pattern. It consists of a bullish candle, a smaller bearish candle that is completely within the range of the previous candle, and a larger bearish candle.
Three Outside Down: A three-candle pattern. It starts with a bullish candle, followed by a larger bearish candle that completely engulfs the previous bullish candle, and then another bearish candle.
Neutral Candlestick Pattern
A neutral candlestick pattern doesn’t strongly indicate either a bullish or bearish trend. It’s like a yellow light, suggesting caution and indicating that the market is uncertain or indecisive about its direction. Traders look at these patterns to assess the market’s stability or potential upcoming change in trend.
Single Candle Patterns:[/b
Doji: A single candlestick pattern with a small body, indicating market indecision. It suggests a potential trend reversal, whether bullish or bearish.
Spinning Top: A single candlestick pattern with a small body and long upper and lower wicks, signaling market indecision and potential trend reversal.
High Wave: A single candlestick pattern characterized by a long upper and lower wick relative to the body, suggesting high market volatility and uncertainty.
Double Candle Patterns:
Tweezer Top: A two-candle pattern occurring after an uptrend, characterized by two consecutive bullish candles with similar highs, suggesting potential resistance and a bearish reversal
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