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All 63 Candlestick Patterns Explained In Details & Performance Data

All 63 Candlestick Patterns Explained In Details & Performance Data

But these patterns are highly important as an alert that the indecision will eventually evaporate and a new price direction will be forthcoming. Traders may be able to profit from changes in market sentiment by spotting inside candles on a 15-minute timeframe chart and trading in the direction of the breakout. The candlestick pattern is important as it shows traders that the bulls still do not have enough power to reverse the trend. Shooting Star is formed at the end of the uptrend and gives a bearish reversal signal. Traders can enter a short position if next day a bearish candle is formed and can place a stop-loss at the high of the second candle. Traders can enter a short position if the next day a bearish candle is formed and can place a stop-loss at the high of the second candle.

  1. But for me, Engulfing, Morning Star, and Evening Star Patterns, and all hammer candlesticks, are the most powerful candlestick patterns.
  2. Strong candlestick patterns are at least 3 times as likely to resolve in the indicated direction (greater than or equal to 75% probability).
  3. Arjun is an active stock market investor with his
    in-depth stock market analysis knowledge.
  4. Such occurrences rattle the traders who were betting on the prior trend continuing, often forcing them out of their positions as their stop-loss levels are hit.

This shows that the bears tried to gain control and force a reversal lower but could not gather enough momentum to beat the trend higher. This pattern shows that the bulls tried to push prices higher, but they could not gather enough steam to create a reversal back higher. Traders will typically enter a short trade when this pattern has been confirmed, and a new candle opens.

This pattern will typically form after a move, or trend higher has taken place. We can see that price opened and sold off heavily; however, by the end of the session, the bulls had roared back and taken over, signaling they were looking to price back higher. The key to the hammer is that it needs to form at the end of a move or trend lower. The con of this pattern is that there is no guarantee that the market will continue to go down. The con of this pattern is that there is no confirmation that the market will continue to go up higher.

This suggests that such small bodies are frequently reversal indicators, as the directional movement (up or down) may have run out of steam. Careful note of key indecision candles should be taken, because either the bulls or the bears will win out eventually. This is a time to sit back and watch the price behavior, remaining prepared to act once the market shows its hand. The candlestick pattern is made of two long candlesticks in the direction of the trend i.e. uptrend in this case.

Intraday trading looks very attractive to many people who are just stepping into the market. Nevertheless, it can be challenging for beginners and even intermediate-level traders to face losses and go through emotional issues. Instead, combine them with other forex trading tools and structures before you make a trade.

The Three Black Crows And The Three White Soldiers

However, a trader should not take trades just by looking at these patterns. If these patterns occur at strong support or resistance levels, then these patterns’ impact is high. But when we talk about above the stomach evolves over a period of almost two sessions. The on-neck candlestick pattern is a 2-bar continuation pattern.Closing prices of the second candle is nearly the same than first candle high/low forming a horizontal neckline.

Mr. Vivek Bajaj has over 18 years of trading experience in equities, options, currencies, and commodity markets. He is the co-founder of Stockedge and Elearnmarkets and is passionate about data, analytics, and technology. He serves on various exchange committees and has played a significant role in the evolution of India’s derivative market.


It is a two-candle pattern that occurs at the bottom of a downtrend. It starts with a small red candle, then is followed by a larger green candle that engulfs the entire body of the previous red candle. The Bullish Engulfing is a reversal pattern, meaning that it suggests a change in the direction of the trend. It indicates that there is strong buying pressure and that the downtrend is likely to end. The three white soldiers candlestick pattern is formed when the market makes three consecutive bullish candles with higher closes.

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The other thing to remember is that you don’t need to know all these patterns. You only need a handful of your favorites that you can master to make profitable trades. You powerful candlestick patterns can use this pattern to identify when the price could be looking to continue the trend higher. This pattern typically forms in areas of important support or resistance.

San-Ku (Three Gaps) Pattern

You just have to look at a bearish candle that has opened above a bullish candle’s high but has closed below the midpoint of its previous candle. The bearish kicker pattern is a candlestick pattern where a bullish candle is quickly followed by a strong bearish candle. The bearish kicker pattern forms when the bearish candle gaps down, breaks and closes below the previous bullish candle’s low.

Doji candlestick pattern occurs when the price of a stock opens and closes at almost the same level. Doji candlestick patterns become very easy to spot as it has an almost non-existent body. The Rising Window is a candlestick pattern consisting of two bullish candlesticks with a gap between them. The gap is a gap between the high and low of two candlesticks created due to high trading volatility. It is a trend continuation candlestick pattern that indicates strong buyers in the market.

On the next day, the high of the second day’s bearish candle’s high indicates a resistance level. Bulls seem to raise the price upward, but now they are not willing to buy at higher prices. It consists of three candlesticks, the first being a long bullish candle, the second candlestick being a small bearish, which should be in the range of the first candlestick.

Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. Reversal implies that the trend has come to a halt and that the price will reverse its direction. A 5-day email course with amazing tips on trading, different trading instruments, and how to finalize a trading system. Get a best-selling eBook and online course by signing up for free.

It forms when a long red candle is followed by a long green candle that opens below the low of the first candle. The pattern suggests that buying pressure is overtaking selling pressure. The Piercing Pattern is more reliable when it occurs at support levels. A hammer candlestick pattern is a single candlestick pattern which indicates a potential bullish trend reversal. A hammer is formed at the bottom of the price chart when a candle leaves a long weak on its lower side and has a very short or no body. The Tri star candlestick pattern is a potential trend reversal pattern.


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