Candlestick patterns, explained
Eleven classic patterns, each with how to spot it, what it usually means and what traders wait for before trusting it. All of them are practised on real charts inside Candlr.
Bullish patterns (a possible move up)
- HammerA small body with a long lower wick after a drop. Sellers pushed price down but buyers pulled it back up.
- Inverted HammerA small body with a long upper wick after a drop. Buyers are starting to test higher prices.
- Bullish EngulfingA green candle whose body fully covers the previous red body. Buyers took over.
- Morning StarA big red candle, a small indecisive one, then a strong green candle. A possible bottom.
- Three White SoldiersThree strong green candles in a row, each closing higher. Buyers are marching in.
Bearish patterns (a possible move down)
- Hanging ManLooks exactly like a hammer, but it appears after a rise. Sellers managed a big dip, a warning sign.
- Shooting StarA small body with a long upper wick after a rise. Buyers pushed price up but sellers rejected it.
- Bearish EngulfingA red candle whose body fully covers the previous green body. Sellers took over.
- Evening StarA big green candle, a small indecisive one, then a strong red candle. A possible top.
- Three Black CrowsThree strong red candles in a row, each closing lower. Sellers are in control.
Indecision
Patterns describe what price did. They do not predict what it will do next, and nothing here is financial advice.