Candlestick patterns are one of the most powerful tools in technical analysis, widely used by traders across stock and cryptocurrency markets to predict short-term price movements. Originating in 18th-century Japan with rice trader Munehisa Homma, candlesticks offer a visual representation of market sentiment through color-coded price action.
By understanding these patterns, traders can identify potential reversals, continuations, and consolidation phases—giving them a strategic edge in timing entries and exits. This guide breaks down 14 essential candlestick patterns every beginner should know, starting with how to read candlesticks and progressing into single, double, and triple formations.
👉 Discover how real-time price action reveals powerful trading signals with advanced chart tools.
How to Read a Candlestick
Each candlestick on a chart represents four key data points for a specific time frame: open, high, low, and close (OHLC). Whether you're viewing 1-minute, 5-minute, or daily charts, each candle captures price behavior during that period.
For example, on a 5-minute chart, a new candle forms every five minutes. The open is the first traded price in that window, while the close is the last. The high and low reflect the extreme prices reached during the interval.
Open Price
The open price appears at either the top or bottom of the candle’s body, depending on market direction:
- In a bullish (green/white) candle, price closes higher than it opened—the open is at the bottom.
- In a bearish (red/black) candle, price closes lower—the open is at the top.
High Price
The highest point reached during the period is shown at the tip of the upper wick (or shadow). If the close or open was the highest price, there will be no upper wick.
Low Price
The lowest price is marked by the end of the lower wick. No lower wick means the open or close was also the session low.
Close Price
This is the final traded price in the timeframe:
- For bullish candles, it's at the top of the body.
- For bearish candles, it's at the bottom.
As a candle forms, its shape changes dynamically—color may flip from green to red if price drops below the open. Only when the period ends does the candle finalize, locking in its OHLC values.
Now that you understand the structure, let’s explore key patterns grouped by complexity: single, double, and triple candle formations.
Single Candlestick Patterns
These patterns form over just one period and often signal potential reversals or indecision.
Spinning Top
A Spinning Top has a small body centered between long upper and lower wicks. It reflects market indecision—neither buyers nor sellers gained control.
- Bullish context: May signal weakening momentum; potential reversal down.
- Bearish context: Could indicate exhaustion; possible upward reversal.
- Accuracy: Medium—requires confirmation from next candle.
Marubozu
This pattern features a long body with no wicks, showing strong momentum:
- Bullish Marubozu (green): Open = low, close = high → strong buying pressure.
- Bearish Marubozu (red): Open = high, close = low → dominant selling.
High-confidence signal for trend continuation or reversal depending on context.
Doji
A Doji forms when open and close prices are nearly identical, creating a cross-like shape. It signals equilibrium between buyers and sellers.
Types include:
- Long-Legged Doji: Long wicks on both sides—high volatility and uncertainty.
- Dragonfly Doji: Long lower wick—potential bullish reversal at support.
- Gravestone Doji: Long upper wick—bearish rejection at resistance.
- Four Price Doji: Open, high, low, close all equal—extreme indecision (common in low liquidity).
👉 See how Doji patterns reveal hidden market turning points before major moves.
Hammer
Appearing after a downtrend, the Hammer has a small body near the top and a long lower wick—shaped like a hammer.
- Indicates buyers pushed price up from lows.
- Strong bullish reversal signal if confirmed by next candle closing higher.
- Best used with volume confirmation.
Hanging Man
Identical in shape to the Hammer but appears at the top of an uptrend.
- Suggests selling pressure emerged during the session.
- Bearish reversal warning—though lower accuracy alone.
- Requires confirmation: next candle closing lower validates bearish intent.
Inverted Hammer
Found after a decline, this pattern has a small body and long upper wick.
- Shows buyers tested higher levels but were rejected.
- Despite selling pressure (long upper wick), it signals potential bullish reversal.
- Confirm with next candle closing above.
Shooting Star
A bearish reversal pattern occurring after an uptrend.
- Long upper wick, small body at lower end.
- Indicates strong rejection at resistance.
- Higher reliability when followed by bearish engulfing or red candle.
Double Candlestick Patterns
These involve two consecutive candles and often signal stronger directional bias.
Bullish Engulfing
Forms after a downtrend: a small red candle followed by a larger green one that completely "engulfs" the prior body.
- Strong bullish reversal signal.
- Higher accuracy when volume increases on second candle.
Bearish Engulfing
Opposite of bullish engulfing: green candle followed by larger red candle that swallows it.
- Appears after uptrend.
- Warns of shift from buying to selling dominance.
Tweezer Bottoms and Tops
Tweezer Bottom: Two or more candles with matching lows—often includes a doji or hammer. Signals bounce off support.
Tweezer Top: Candles with same highs—shows rejection at resistance. Common end-of-rally sign.
Both require alignment in low (bottom) or high (top) points across candles—not necessarily same body size.
Harami Pattern
Japanese for "pregnant," Harami consists of a large first candle followed by a smaller one contained within its range.
- Bullish Harami: Red then small green inside it—downtrend losing steam.
- Bearish Harami: Green then small red inside—upward momentum fading.
- Smaller second candle = stronger reversal signal.
- Accuracy: Medium to high with confirmation.
Triple Candlestick Patterns
Three-candle formations carry higher predictive power due to extended time and commitment.
Morning Star & Evening Star
Morning Star (bullish):
- Long red candle
- Small-bodied candle (often doji)
- Long green candle
Signals bottom after downtrend—buyers regain control.
Evening Star (bearish):
- Long green candle
- Doji/small body
- Long red candle
Top formation after rally—sellers take over.
High accuracy when confirmed by volume or support/resistance levels.
Three White Soldiers & Three Black Crows
Three White Soldiers: Three consecutive long green candles closing near highs—strong bullish momentum after downtrend.
Three Black Crows: Three long red candles after uptrend—bearish exhaustion pattern signaling deep correction or reversal.
👉 Learn how multi-candle patterns predict big market moves before they happen.
Three Inside Up & Three Inside Down
Three Inside Up (bullish reversal):
- Long red candle
- Small green inside previous body
- Green candle breaking prior high
Buyers gradually take control—high reliability.
Three Inside Down (bearish reversal):
- Long green candle
- Small red within range
- Red candle breaking prior low
Sellers overpower bulls—strong downtrend signal.
Frequently Asked Questions (FAQ)
Q: What are the most reliable candlestick patterns?
A: Triple patterns like Morning Star, Evening Star, and Three White Soldiers/Three Black Crows tend to be more accurate due to longer formation periods and stronger commitment.
Q: Can candlestick patterns work in crypto trading?
A: Yes—especially in volatile markets like Bitcoin and altcoins. Their visual clarity makes them ideal for spotting reversals during rapid price swings.
Q: How do I confirm a candlestick signal?
A: Always wait for the next candle to close in the predicted direction. Combine with volume, support/resistance, or indicators like RSI for higher confidence.
Q: Are single-candle patterns useful?
A: Yes—but they’re less reliable alone. Use them as early warnings; confirmation is critical (e.g., Doji + next bullish candle).
Q: Should I trade based solely on candlesticks?
A: Not recommended. Use them within a broader strategy including risk management, trend analysis, and market context.
Q: What timeframes work best for candlestick analysis?
A: Shorter timeframes (1m–15m) suit day traders; 1H–daily charts are better for swing traders seeking higher-probability setups.
Understanding these 14 core candlestick patterns equips beginners with foundational tools for technical analysis. While not foolproof, they provide valuable insights into market psychology and potential turning points. With practice and proper confirmation techniques, traders can integrate these patterns into effective strategies across stocks, forex, and digital assets.