Understanding candlestick patterns is key to predicting market reversals and making smarter trading decisions. Here’s your ultimate guide to mastering them:
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🟢 Bullish Candlestick Patterns (Signal Potential Uptrend Reversals)
1. Bullish Engulfing
A strong green candle completely engulfs the previous red one—indicates a shift from selling to buying momentum.
2. Bullish Tweezers
Two candles with similar low points, suggesting a strong support level and a potential upward reversal.
3. Morning Star
A three-candle formation: red candle → small-bodied candle → green candle. Shows selling pressure weakening and buying strength increasing.
4. Hammer
A candle with a small body and a long lower wick, reflecting a price drop that was pushed back up by buyers.
5. Inverted Hammer
Similar to the hammer, but with a long upper wick. Signals potential bullish reversal after a downtrend.
6. Three Inside Up
A red candle followed by two green candles. Confirms a reversal from bearish to bullish momentum.
7. Three White Soldiers
Three consecutive green candles with higher closes—strong indication of sustained bullish power.
🔴 Bearish Candlestick Patterns (Signal Potential Downtrend Reversals)
8. Bearish Engulfing
A large red candle engulfs the previous green one, signaling strong selling momentum.
9. Bearish Tweezers
Two candles with nearly identical highs—points to strong resistance and a likely reversal downward.
10. Evening Star
Three candles: green → small-bodied → red. A classic transition from bullish to bearish sentiment.
11. Shooting Star
A candle with a small body and long upper wick—buyers pushed prices up but lost control by close.
12. Three Black Crows
Three consecutive red candles with lower closes, marking sustained bearish pressure.
13. Three Inside Down
A green candle followed by two red candles, confirming the start of a downward trend.
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⚪ Neutral / Indecision Patterns
14. Spinning Tops
Candles with small bodies and long upper and lower wicks—reflect market uncertainty.
15. Doji
Opening and closing prices are nearly identical, indicating indecision and potential trend shift.
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By recognizing these candlestick patterns, traders can better anticipate market direction and minimize potential losses.
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