The Ultimate Candlestick Patterns Dictionary: Unlocking the Market's Hidden Messages
In the world of trading, candlestick patterns are more than just colorful bars on a chart—they are visual footprints of market psychology. These patterns tell stories of battles between bulls and bears, helping traders anticipate potential price movements. Whether you're a beginner or a seasoned trader, understanding candlestick patterns is essential to mastering price action.
Let’s dive into a rich dictionary of candlestick patterns categorized into reversal, continuation, and neutral/indecision signals.
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I. Reversal Patterns
1. Bullish Engulfing
A small red candle followed by a large green candle that completely engulfs it. Appears at the end of a downtrend—bulls are taking over.
2. Bearish Engulfing
The reverse of bullish engulfing. A small green candle is followed by a dominant red candle. Signals a potential top.
3. Morning Star
A three-candle bullish reversal pattern: red candle, a small indecisive candle (doji/spinning top), and a strong green candle.
4. Evening Star
Bearish equivalent of the morning star. Marks a potential market top.
5. Abandoned Baby (Bullish & Bearish)
A rare and powerful reversal pattern formed by a doji completely isolated by gaps. Indicates sharp changes in direction.
6. Three Black Crows
Three consecutive red candles with lower closes, signaling strong bearish momentum.
7. Three White Soldiers
Three consecutive green candles with higher closes, showing bullish strength.
8. Tower Bottom and Tower Top
Tower patterns signify major reversals, often showing a sharp price move followed by a slower recovery (or drop).
9. Upside/Downside Tasuki Gap
Continuation or reversal depending on market context, but often reflects aggressive momentum.
10. Bearish and Bullish Kicking
Strong reversal signals formed by opposite marubozu candles with a gap.
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II. Continuation Patterns
1. Rising Three Methods
A long green candle followed by a cluster of small red candles, and another strong green candle. Shows a pause before continuation.
2. Falling Three Methods
Bearish version of the rising three—shows a pullback in a downtrend before it resumes.
3. Bullish/Bearish Mat Hold
Another continuation pattern where price consolidates within a trend before continuing.
4. Separating Lines
Signals a continuation when a strong candle follows a same-colored open, ignoring recent corrections.
5. Window Candlestick Trading
Gaps (or windows) between candles can act as support or resistance zones, indicating continuation if unfilled.
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III. Neutral / Indecision Patterns
1. Doji (Long-legged, Dragonfly, Gravestone)
Formed when the open and close are nearly equal, signaling indecision. Watch for confirmation from surrounding candles.
2. Spinning Top
Small-bodied candle with long wicks. Indicates market uncertainty.
3. Matching High/Low
Two candles with the same high or low suggest a potential stall in trend or reversal point.
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IV. Other Noteworthy Patterns
On Neck / In Neck / Thrusting: Minor bearish continuation or potential short-term reversals.
Advance Block / Deliberation: Signals slowing momentum in uptrends.
Three Inside Up / Down: A compact reversal signal formed by an engulfing pattern followed by confirmation.
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Conclusion
Reading candlestick patterns is like understanding a market's language. Each pattern reveals a mood, an intention, or a hesitation. Alone, a pattern may offer a hint, but combined with volume analysis, support/resistance, and indicators, they become powerful tools in a trader’s arsenal.
If you master these candlestick patterns and learn to recognize their context, you'll be far ahead in decoding the market's next move.
Here is the candles pattern image 👇
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