CandleStick Pattern


A financial technical analysis method called candlestick patterns uses a candlestick chart to graphically display daily price movement data. A financial chart known as a candlestick chart displays the price movement of currencies, equities, and derivatives as patterns.

Candlestick Pattern

A technical technique that condenses data from several time periods into a single price bar is the candlestick chart. Because of this, they are more beneficial than conventional OHLC bars or straightforward lines that join the closing prices. Candlesticks create patterns that, when finished, can be used to forecast price direction. This colorful technical instrument, originating from Japanese rice traders in the 18th century, gains depth through proper color coding.


  • For ages, traders have utilized candlestick patterns as a technical tool to forecast market trends.
  • Numerous candlestick patterns exist, each with a clear and descriptive name; most of them also have a corollary pattern that alternates between the upside and downside.
  • To hone their trading technique (e.g., entrance, exit), traders add extra technical indicators to candlestick patterns.
  • Candlesticks are not indicators of the future; rather, they are based on previous and present price fluctuations.
  • Candlesticks are useful when trading as they show four price points (open, close, high, and low) throughout the period the trader specifies.

  • How To Read CandleStick Pattern

    A daily candlestick chart displays the open, high, low, and closing prices of the market for the day, just like a bar chart does. The broad area on the candlestick is referred to be the "real body"

    Basic Candle Stick

    The price range between the opening and closing prices of that trading day is represented by this actual body. The genuine body indicates that the close was less than the open when it is filled in or black (also red). The genuine body was higher at close than at open if it is white (or green).

    Types Of Candlestick Pattern

  • Arms CandleStick Pattern
  • Hammer
  • Piercing Pattern
  • Bullish Engulfing
  • The Morning Star
  • Three White Soldiers
  • White Marubozu
  • Three Inside Up
  • Bullish Harami
  • Tweezer Bottom
  • Inverted Hammer
  • Three Outside Up
  • On-Neck Pattern
  • Bullish Counterattack
  • Hanging man
  • Dark cloud cover
  • Bearish Engulfing
  • The Evening Star
  • Three Black Crows
  • Black Marubozu
  • Three Inside Down
  • Bearish Harami
  • Shooting Star
  • Tweezer Top
  • Three Outside Down
  • Bearish Counterattack

  • Bullish Hammer:

  • A candle with a short body and a long wick (roughly +2x the size of the candle)
  • Little to no wick on the short-end side
  • Can be either red or green, depending on the strength of the price reversal
  • Indicates an upward trend reversal (price may increase)

  • Hammer Candlestick Pattern

    Inverted Hammer:

  • A candle with a short body and a long wick
  • Little to no wick on the short-end side
  • Formed when the open, low, and close are approximately the same price
  • Occurs at the bottom of a downtrend
  • Identifies a favorable entry point

  • Engulfing Line:

    An engulfing line (EL) is a type of candlestick pattern represented as both a bearish and bullish trend and indicates trend continuation.

    Engulfing Pattern

    A bearish engulfing line indicates a bearish trend continuation (lower prices to come), whereas a bullish engulfing line indicates a bullish trend continuation (higher prices to come) in terms of financial indications.

    Harami Pattern:

    A Japanese candlestick pattern known as the Harami (HR) pattern may indicate a possible market reversal or the continuation of a bullish or bearish trend. Harami, which translates from Japanese to mean "pregnant," is shown by the first candle, which is regarded as such.

    Harami Pattern

  • When there is a bearish Harami candlestick present in the market, this may suggest a potential downward price reversal in the near future.

  • As for a bullish Harami, this candlestick formation may suggest that a bearish trend may be coming to an end, which can result in some upward (bullish) price reversal.

  • Piercing Line:

    A sort of candlestick pattern that spans two days is called the piercing line (PL), and it indicates a possible bullish turnaround in the market.

    Piercing Pattern

    The piercing line pattern is typically found near the base of a downward trend. Given that prices are declining, purchasers are prompted to influence a trend reversal in order to raise prices.

    Three Black Crows pattern:

    The three black crows candlestick pattern is considered a relatively reliable bearish reversal pattern. Consisting of three consecutive bearish candles at the end of a bullish trend, the three black crows signals a shift of control from the bulls to the bears.

    Three Black Crow Pattern

    Related Articles:

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  • Price-to-Earning Ratio
  • Qstick Indicator
  • Return On Investment
  • Relative Strength Index
  • Support & Resistance Pattern
  • Stochastic Oscillator
  • Three Soldier CandleStick Pattern
  • Bullish Engulfing Candlesstick Pattern
  • Marubozu Candlestick Pattern
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