10 Candlestick Patterns Every Beginner Should Know
Candlestick patterns are the alphabet of price action. Learn the 10 most important patterns, what they look like, and what they signal.
10 Candlestick Patterns Every Beginner Should Know
Candlesticks tell a story. Each one captures the battle between buyers and sellers — the open, close, and wicks reveal who won, who lost, and who's gaining momentum.
Before diving into indicators and algorithms, every trader should learn to read price action through candlestick patterns. These 10 patterns form the foundation of technical analysis.
Quick refresher: How to read a candlestick
| Part | Meaning |
|---|---|
| Body | The range between open and close |
| Upper wick (shadow) | The highest price reached during the period |
| Lower wick (shadow) | The lowest price reached during the period |
| Green/white body | Close > Open (bullish) |
| Red/black body | Close < Open (bearish) |
Now let's get to the patterns.
1. Doji
What it looks like: A candle with a very thin (or nonexistent) body and wicks on both sides. The open and close are virtually equal.
What it signals: Indecision. Neither buyers nor sellers controlled the session. When a Doji appears after a strong trend, it often precedes a reversal.
How to use it: Don't trade the Doji alone — wait for confirmation from the next candle. A Doji after a long uptrend followed by a bearish candle is a potential short entry.
2. Hammer
What it looks like: A small body at the top of the candle with a long lower wick (at least 2× the body). The upper wick is tiny or absent. Appears at the bottom of a downtrend.
What it signals: Sellers pushed price down aggressively, but buyers stepped in and drove it back up. A potential bullish reversal.
How to use it: Enter long after the Hammer closes, with a stop-loss below the Hammer's low. Works best on daily charts and at key support levels.
3. Inverted Hammer
What it looks like: A small body at the bottom of the candle with a long upper wick. Appears at the bottom of a downtrend.
What it signals: Buyers tried to push price up during the session. Although they couldn't hold the highs, the attempt signals weakening selling pressure.
How to use it: Similar to the Hammer — wait for bullish confirmation on the next candle before entering.
4. Bullish Engulfing
What it looks like: A large green candle that completely "engulfs" the previous red candle's body. Appears at the bottom of a downtrend.
What it signals: A decisive shift in control from sellers to buyers. The larger the engulfing candle relative to the prior candle, the stronger the signal.
How to use it: Enter long at the close of the engulfing candle. Place your stop below the engulfing candle's low.
5. Bearish Engulfing
What it looks like: A large red candle that completely engulfs the previous green candle's body. Appears at the top of an uptrend.
What it signals: Buyers lost control and sellers took over aggressively. The mirror image of the bullish engulfing.
How to use it: Enter short at the close of the engulfing candle. Place your stop above the engulfing candle's high.
6. Morning Star
What it looks like: A three-candle pattern:
- A large red candle (downtrend continues)
- A small-bodied candle (indecision — can be red or green)
- A large green candle (buyers take over)
What it signals: A reliable bullish reversal pattern. The middle candle shows the transition of power.
How to use it: Enter long after the third candle closes. Stop-loss below the middle candle's low. This pattern has a high win rate on daily timeframes.
7. Evening Star
What it looks like: The mirror of the Morning Star:
- A large green candle (uptrend continues)
- A small-bodied candle (indecision)
- A large red candle (sellers take over)
What it signals: A reliable bearish reversal. The counterpart to the Morning Star.
How to use it: Enter short after the third candle closes. Stop-loss above the middle candle's high.
8. Shooting Star
What it looks like: A small body at the bottom of the candle with a long upper wick (at least 2× the body). Appears at the top of an uptrend. Essentially the bearish version of the Inverted Hammer.
What it signals: Buyers pushed price up but got rejected. Sellers stepped in and pushed price back down near the open — a warning sign for bulls.
How to use it: Enter short on confirmation. Stop above the Shooting Star's high.
9. Three White Soldiers
What it looks like: Three consecutive large green candles, each opening within the previous candle's body and closing progressively higher.
What it signals: Strong, sustained buying pressure. A bullish continuation or reversal pattern that shows conviction.
How to use it: Enter long after the third candle. Be cautious if the third candle has long upper wicks — that may indicate exhaustion.
10. Three Black Crows
What it looks like: Three consecutive large red candles, each opening within the previous candle's body and closing progressively lower.
What it signals: Strong, sustained selling pressure. The bearish counterpart to Three White Soldiers.
How to use it: Enter short after the third candle. As with Three White Soldiers, watch for wicks on the third candle that might signal slowing momentum.
Key principles for trading candlestick patterns
- Context matters — A Hammer at support is meaningful. A Hammer in the middle of a range is noise. Always combine patterns with support and resistance analysis.
- Confirmation is essential — Never trade on a single candle without waiting for the next candle to confirm the signal.
- Higher timeframes = higher reliability — Patterns on daily charts are far more reliable than on 5-minute charts.
- Volume adds weight — A Bullish Engulfing with above-average volume is far more convincing than one on thin volume.
- Patterns aren't guarantees — They indicate probabilities, not certainties. Always use a stop-loss and proper position sizing.
Next steps
Now that you can recognize the core patterns, practice identifying them on your charts. Use our tools to scan for setups, and consider testing the pullback strategy which combines candlestick patterns with moving average analysis.
The best traders don't memorize 100 patterns — they master 5–10 and trade them with discipline.