Candlestick Patterns: A Trader's Study Guide

Learn the candlestick patterns that actually matter. Each one shows what the pattern means, how it is traded, the common mistakes, and how to journal your pattern trades so you find out which ones you trade well.

Watch: candlestick patterns explained

A full walkthrough of reading candlestick patterns for reversals and continuations, from the xVyperTv Trades channel.

Bullish Reversal

A hammer is a single candlestick with a small body near the top and a long lower wick, appearing after a downtrend. It is one of the most watched bullish reversal signals.

Inverted Hammer

An inverted hammer is a single candlestick with a small body near the bottom and a long upper wick, appearing after a downtrend. It hints at a possible bullish reversal.

Bullish Engulfing

A bullish engulfing pattern is a two-candle bullish reversal where a small red candle is followed by a larger green candle whose body completely engulfs it, appearing after a downtrend.

A morning star is a three-candle bullish reversal pattern made of a large red candle, a small-bodied candle that gaps down, and a large green candle that closes well into the first candle's body. It marks a possible bottom after a downtrend.

A piercing line is a two-candle bullish reversal where a strong red candle is followed by a green candle that opens below the prior low and closes above the midpoint of the red candle's body, appearing after a downtrend.

Three White Soldiers

Three white soldiers is a three-candle bullish reversal made of three consecutive long green candles, each opening within the prior body and closing near its high. It signals strong, sustained buying after a downtrend.

Bearish Reversal

A hanging man is a single candlestick with a small body near the top and a long lower wick, appearing after an uptrend. It warns that the rally may be losing strength.

A shooting star is a single candlestick with a small body near the bottom and a long upper wick, appearing after an uptrend. It signals a potential bearish reversal.

Bearish Engulfing

A bearish engulfing pattern is a two-candle bearish reversal where a small green candle is followed by a larger red candle whose body completely engulfs it, appearing after an uptrend.

An evening star is a three-candle bearish reversal pattern made of a large green candle, a small-bodied candle that gaps up, and a large red candle that closes well into the first candle's body. It marks a possible top after an uptrend.

Dark Cloud Cover

Dark cloud cover is a two-candle bearish reversal where a strong green candle is followed by a red candle that opens above the prior high and closes below the midpoint of the green candle's body, appearing after an uptrend.

Three Black Crows

Three black crows is a three-candle bearish reversal made of three consecutive long red candles, each opening within the prior body and closing near its low. It signals strong, sustained selling after an uptrend.

Indecision

A doji is a single candlestick where the open and close finish at almost the same price, leaving a very small body with wicks on one or both sides. It is the market's clearest picture of indecision.

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