10 Candlestick Patterns Every Beginner Should Know

The alphabet of price action

Candlesticks tell a story. Each one captures the battle between buyers and sellers in a single period — the open, close, and wicks reveal who won, who lost, and who's gaining momentum. Before touching indicators, every trader should learn to read price action through candlestick patterns. Yet pattern-reliability studies show a sobering truth: the same pattern wins 60%+ of the time at a key level and loses 55% of the time mid-range. Context — not the pattern — is everything.

How to read a candle

A candlestick packs four prices into one shape: open, high, low, and close. The body spans open-to-close; the wicks (shadows) mark the period's high and low. A green/white body means close > open (bullish); a red/black body means close < open (bearish). Long wicks show rejection — price ventured there but was driven back. A long lower wick means buyers rejected lower prices; a long upper wick means sellers rejected higher prices. A long body signals conviction; a small body signals indecision.

Patterns are simply combinations of 1–3 candles whose shape reveals a shift in control. A Hammer (long lower wick, small body) shows sellers pushed price down and buyers drove it back — a potential bullish reversal. An Engulfing candle shows one side overwhelming the other in a single bar. The key idea: a pattern is a probability signal, not a guarantee. Its edge comes from appearing at the right place — at support or resistance, after a trend, with volume. A Doji in the middle of nowhere is noise; the same Doji at resistance after a 5-day rally is a warning.

The 10 core patterns

#	Pattern	Shape	Signal	How to trade it
1	Doji	Thin/no body, wicks both sides	Indecision	Wait for next candle; bearish close after uptrend = short
2	Hammer (bullish pin bar)	Small body top, long lower wick (≥2× body), bottom of downtrend	Bullish reversal	Long on close; stop below the wick low
3	Shooting Star (bearish pin bar)	Small body bottom, long upper wick (≥2× body), top of uptrend	Bearish reversal	Short on confirmation; stop above the wick high
4	Bullish Engulfing	Large green body engulfs prior red body, bottom of downtrend	Sellers → buyers	Long at close; stop below engulfing low
5	Bearish Engulfing	Large red body engulfs prior green body, top of uptrend	Buyers → sellers	Short at close; stop above engulfing high
6	Morning Star	Red → small body → large green (3-candle)	Bullish reversal	Long after 3rd close; stop below middle low
7	Evening Star	Green → small body → large red (3-candle)	Bearish reversal	Short after 3rd close; stop above middle high
8	Three White Soldiers	3 rising green candles, each opens in prior body	Strong bullish conviction	Long after 3rd; watch for exhaustion wicks
9	Three Black Crows	3 falling red candles, each opens in prior body	Strong bearish conviction	Short after 3rd; watch for exhaustion wicks
10	Harami	Small body inside the prior large body	Momentum pausing	Don't trade alone; wait for breakout direction

Worked example: EUR/USD has rallied for 4 days into the 1.1000 resistance zone. On day 5 it prints a Shooting Star with a long upper wick at 1.1015 and a close at 1.0990 — sellers rejected the highs. With support & resistance confluence and a bearish pin bar, enter short at 1.0990, stop at 1.1020 (above the wick, ≈30 pips), target 1.0930 (≈60 pips, 2R). The pattern alone isn't the edge — the level is; the pattern just confirms the level held.

Pattern-trade checklist:

Pattern appears at a key S/R level or after a trend (not mid-range)
Higher timeframe trend agrees with the signal direction
Wait for the pattern to close, not mid-formation
Volume on the signal candle ≥ 20-period average
Stop placed beyond the wick/body, risk ≤ 1%

Three candlestick mistakes

Trading patterns in isolation. A Hammer mid-range is noise; the same Hammer at support is a signal. Fix: only act on patterns that form at a validated support/resistance level or after a clear trend.
Entering before the candle closes. A pattern that looks perfect mid-formation often morphs into something else by the close. Fix: wait for the candle to close; the last 5 minutes are not worth the whipsaw risk.
Using low timeframes exclusively. A 5-minute Doji is mostly noise; a daily Doji at resistance is meaningful. Fix: default to daily and 4-hour patterns; treat anything below 1-hour as confirmation only.

Advanced tips

Two upgrades sharpen pattern trading. First, confluence stacking: a Hammer at support that also sits on the 50 EMA and a Fibonacci 61.8% retracement is far stronger than a Hammer alone — each confluence roughly adds to the probability. Second, filter by volume and trend: require signal-candle volume above the 20-period average and pattern direction aligned with the higher-timeframe moving average trend; this alone removes most false signals. For a complete system, pair patterns with the price action strategy and log each pattern's win rate by location in your journal. The best traders don't memorize 100 patterns — they master 5–10 and trade them with discipline at the right levels.

Summary

Candlestick patterns are the alphabet of price action — each one reveals who won the period's buyer–seller battle. Learn these 10 core patterns, but remember the pattern is only a probability signal; the edge lives in context: a key level, a trend, and volume. Always wait for the close, place a stop beyond the wick, and confirm with the higher timeframe. Master 5–10 patterns at the right levels, not 100 in a vacuum.