📘 Glossary
intermediate
Candlestick Pattern
Also known as:
Japanese Candlesticks, Candle Pattern
Candlestick patterns are visual formations on price charts that indicate potential price reversals or continuations. Originated in Japanese rice trading.
Candlestick patterns are specific formations of one or more candlesticks that signal potential price direction changes. They originated from Japanese rice traders in the 18th century.
Single Candle Patterns
| Pattern | Signal | Description |
|---|
| Hammer | Bullish reversal | Small body, long lower shadow |
| Shooting Star | Bearish reversal | Small body, long upper shadow |
| Doji | Indecision | Open approximately equals Close |
| Marubozu | Strong momentum | No shadows |
Double Candle Patterns
| Pattern | Signal | Description |
|---|
| Bullish Engulfing | Bullish | Green candle covers previous red |
| Bearish Engulfing | Bearish | Red candle covers previous green |
| Tweezer Bottom | Bullish | Two candles with same low |
| Tweezer Top | Bearish | Two candles with same high |
Triple Candle Patterns
| Pattern | Signal | Description |
|---|
| Morning Star | Bullish | 3-candle reversal at bottom |
| Evening Star | Bearish | 3-candle reversal at top |
| Three White Soldiers | Bullish | 3 consecutive green candles |
| Three Black Crows | Bearish | 3 consecutive red candles |
Key Points
- Context matters — patterns at key levels are more reliable
- Higher timeframes produce stronger signals
- Combine with volume for confirmation
- No single pattern is 100% reliable