Trading candlestick patterns are the visual presentation of the trading charts that show how prices move in the market. Each candlestick pattern represents price action within a specific time frame, which shows the open, high, low, and close. These candlestick patterns help you to predict price movements and make your entry and exit points so simple. Whether you’re trading stocks, forex, or crypto, mastering these Trading Candlestick patterns can make your trading easy. These charts can tell you when prices will go high, low, or stay the same, helping you make better entry and exit decisions. From simple to advanced candlestick pattern setups, this guide will cover 45 all powerful trading candlestick patterns every trader should know in 2025. Let’s get started!
Complete Trading course online
If you want to learn trading with our online course through live classes on the Zoom app (1 to 1). Here are the details about the course, from the basics to the advanced level, so contact us if you’re interested.
What Are Candlestick Patterns?
Candlestick patterns are special shapes and structures in the market that show how the price of digital assets, like stocks, forex, or crypto, moved during a 1-second to 1-month time frame. Each candlestick pattern shows four things: the opening price, the highest price, the lowest price, and the closing price. These small candlestick patterns help traders understand what’s happening in the market. By learning how to read a candlestick pattern, you can predict if prices might go up or down next. In simple words, candlestick patterns tell the story of price action. They are easy to spot on trading charts and are used by new and expert traders. Many successful strategies are built around Trading Candlestick Patterns because they show how buyers and sellers are behaving. When you know how to use them, these candlestick patterns can help you make better trading decisions.
Why Are Candlestick Patterns Important?
- Predict Trends: Candlestick patterns help you enter when the market is near your point of interest.
- Identify Entry and Exit Points: This candlestick pattern shows you when to enter or exit a trade.
- Risk Management: They help you set stop-loss and take-profit levels.
- Versatility: They work across stocks, forex, crypto, and other markets.
Candlestick pattern helps you in making smart decisions. One major reason trading candlestick patterns is so important is that they predict market trends early. This gives you a better chance to enter the market near your desired price point. They also help you identify clear entry and exit points, so you know exactly when to get in or out of a trade. This is key for risk management, as these candlestick patterns let you place stop-loss and take-profit levels with more confidence. Another great thing about candlestick pattern strategies is their versatility. Whether you’re trading stocks, forex, or crypto, these trading patterns work on all charts and timeframes.
Easy Ways to Use Candlestick Patterns in Real Trading
Candlestick patterns are like clues on a price chart that tell you how buyers and sellers are behaving. For example, a bullish engulfing candlestick pattern might mean the price could rise soon, while a shooting star pattern could hint at a drop. To use these trading candlestick patterns properly, it’s smart to pair them with support and resistance zones. If a bullish pattern shows up near a support level, that’s often a sign of a possible buy. You can also use other tools like the RSI (Relative Strength Index) to double-check what the candlestick is suggesting. Before using these signals with real money, practice on a demo account. This helps you get confident without risking anything.
Different Types of Candlestick Patterns Explained
Candlestick patterns help traders read price movement visually. Each pattern has a unique shape and message. Here’s a table showing 45 common candlestick patterns, what they look like, and what they usually mean.
All Candlestick Patterns
Pattern Name |
What this Pattern looks like |
What It Might Mean |
|---|---|---|
| Hammer | Small body, long lower tail | Price may go up (bullish) |
| Inverted Hammer | Small body, long upper tail | Possible upside reversal |
| Doji | Open and close at the same level | Uncertainty |
| Bullish Engulfing | A big green candle wraps a red one | The price may rise |
| Bearish Engulfing | A big red candle wraps a green one | The price may fall |
| Morning Star | Downtrend, small candle, then green candle | Trend may reverse up |
| Evening Star | Uptrend, small candle, then red candle | The trend may reverse down |
| Shooting Star | Small body, long upper tail | Possible drop |
| Hanging Man | Small body, long lower tail | Potential sell signal |
| Spinning Top | Small body with long tails | Indecision |
| Three White Soldiers | Three long green candles | Strong bullish trend |
| Three Black Crows | Three long red candles | Bearish signal |
| Piercing Line | Red candle followed by green above halfway | Bullish signal |
| Dark Cloud Cover | A green candle followed by a red candle below halfway | Bearish signal |
| Tweezer Bottom | Two candles with the same lows | Possible bottom |
| Tweezer Top | Two candles with the same highs | Possible top |
| Marubozu | Long candle, no shadows | Strong price move |
| Inside Bar | Candle inside the range of the previous one | Price could break out |
| Outside Bar | The candle covers the prior one completely | Possible reversal |
| Harami | A small candle within the previous big one | Trend may pause or flip |
| Harami Cross | Doji inside a large candle | Turning point possible |
| Rising Three Methods | Big green, three small reds, another green | Bullish continuation |
| Falling Three Methods | Big red, small greens, then another red | Bearish continuation |
| Dragonfly Doji | Long lower tail, closes at the top | Bullish reversal signal |
| Gravestone Doji | Long upper tail, closes at the bottom | Bearish reversal signal |
| Abandoned Baby | Doji with gaps on both sides | Major trend reversal |
| Upside Gap Two Crows | Two reds after a gap up | Bearish setup |
| Downside Gap: Three Methods | Three candles with a downward gap | Bearish continuation |
| Mat Hold | Big green, small reds, another green | Bullish trend continues |
| Belt Hold | Opens at extreme end, strong movement | Reversal or continuation |
| Kicking | Two opposite Marubozu candles with a gap | Sharp reversal |
| Matching Low | Two candles with the same light | Support confirmation |
| Matching High | Two candles of the same height | Resistance confirmation |
| On Neck | Red candle, small green at the bottom | Weak bearish continuation |
| In Neck | Red candle, small green slightly higher | Slight bearish signal |
| Thrusting | The green candle closes within the red candle | Still bearish |
| Counterattack | Two opposite candles, same closing level | Possible reversal |
| Separating Lines | Same open, opposite colors | The trend is continuing |
| Breakaway | One big candle and multiple follow-ups | Trend shift possible |
| Tasuki Gap | Gapped candles with reversal | Continuation pattern |
| Concealing Baby Swallow | Red candles swallowing smaller ones | Trend likely continuing |
| Stick Sandwich | Green-red-green, same close | Bullish reversal signal |
| Ladder Bottom | A series of reds ending in green | Uptrend may start |
| Tri-Star | Three dojis in a row | Strong reversal chance |
| High Wave | Long tails, tiny body | Big uncertainty |
| Long-Legged Doji | Extreme tails, almost flat body | The market is undecided |
How to Identify Trading Candlestick Patterns
To identify Trading candlestick patterns, focus on the body and wicks of each candle. The body represents the difference between the open and close prices, while the wicks show the highest and lowest points. A green (or white) candle suggests buying pressure, while a red (or black) candle indicates selling pressure. Candlestick patterns emerge from these individual candles and help you determine market trends. Recognizing these trading candlestick patterns is key to making informed decisions.
How Do Candlestick Patterns Form on the Chart?
Each candlestick pattern on a chart uses four price points: open, high, low, and close. If the price closes higher than it opened, the candle is usually green (bullish). If it closes lower, it’s red (bearish). The thick part of the candle (the “body”) shows the range between the open and close. The thin lines (called “wicks” or “shadows”) show the highest and lowest prices during that time. When you see certain candlestick pattern shapes forming repeatedly, they create recognizable patterns. These patterns help traders predict what might happen next in the market.
Recognizing Bullish and Bearish Candlestick Patterns
When you spot bullish candlestick patterns, it indicates a potential upward trend, signaling buying opportunities. Conversely, bearish candlestick patterns suggest a downtrend, providing selling signals. By understanding these patterns, you can use them effectively within your trading candlestick pattern strategy to identify market movements and optimize your entries and exits.
What Markets Can You Trade Using Candlestick Patterns?
You can use candlestick patterns in almost any market. Whether you trade stocks, forex, crypto, or commodities, these patterns work the same way. In forex, patterns like the doji or engulfing candle often show up before a strong move. In stocks, patterns like the morning star can signal a breakout or trend change. Even in crypto, these same signals can guide your trades. No matter the market, candlestick analysis is a universal tool every trader can benefit from.
Bullish Candlestick Patterns: The Best Buy Signals
Bullish Candlestick Patterns show when the price is likely to go up. They appear when buying pressure pushes the price higher, often at support levels. These candlestick patterns often appear at support levels, signaling that buyers are stepping in and the market may rise soon. When you understand bullish candlestick patterns, you can identify strong buying opportunities early, before the price moves higher. This candlestick pattern helps you to make more confident decisions by showing clear signs of a trend reversal or continuation. From beginner-friendly setups to more advanced signals, learning to spot these bullish candlestick patterns can improve your trade timing, reduce risks, and boost your overall success rate in the markets.
1. Hammer Candlestick Pattern
A single candlestick pattern with a small body and a long lower wick, which looks like a hammer called hammer candlestick pattern.
- What It Means: Signals a bullish reversal after a downtrend.
- How to Trade: Buy when the candle forms at the area of support. It’s highly indicative of a bullish reversal.
2. Bullish Engulfing Candlestick Pattern
A two candlestick pattern where the second candle completely engulfs the first one.
- What It Means: Indicates a strong bullish reversal and the end of downtrend.
- How to Trade: Identify the candlestick pattern at the area of support. Buy when the second candle closes above the first. Set your stop loss below the candle and take profit above the previous high.
3. Morning Star Candlestick Pattern
A three candlestick pattern with a small middle candle between a long bearish and a long bullish candle.
- What It Means: Signals a bullish reversal at the area of support.
- How to Trade: Buy when the third candle closed above the 2ndcandle or both 1st and 2nd.
4. Piercing Line Candlestick Pattern
A two candlestick pattern where the second candle closes above the midpoint up to 50% of the first.
- What It Means: Indicates a best bullish reversal.
- How to Trade: Buy when the second candle confirmed to close above 50% of the first candle at market support level.
5. Three White Soldiers Candlestick Pattern
Three consecutive long bullish candles at the support level.
- What It Means: Signals a strong bullish trend reversal.
- How to Trade: Buy when the market creates 3 consecutive long bullish candles at support. Set stop loss below the candle and take profit above the previous high.
Bearish Candlestick Patterns
Bearish candlestick patterns indicate a downward market trend, signaling potential selling opportunities at the resistance level. These trading candlestick patterns are especially useful when the price reaches resistance levels, suggesting that the market may reverse. By recognizing bearish candlestick patterns, traders can effectively plan their exit points or short positions. Understanding these candlestick patterns helps you predict market movements and make the best decisions in your trading.
6. Shooting Star Candlestick Pattern
A single candlestick pattern with a small body and a long upper wick.
- What It Means: Signals a potential bearish reversal after an uptrend at resistance level.
- How to Trade: Sell when the next candle confirmed close below the shooting star candle.
7. Bearish Engulfing Candlestick pattern
A two candlestick pattern where the second candle completely engulfs the first at the resistance area.
- What It Means: Indicates a strong bearish reversal.
- How to Trade: Sell when the second candle closes below the first. Set stop loss above the candle and take profit below the previous low.
8. Evening Star Candlestick Pattern
A three-candlestick pattern with a small middle candle between a long bullish and a long bearish candle. This will always form at the resistance level.
- What It Means: Signals a bearish reversal.
- How to Trade: Sell when the third candle confirmed closed below the middle candle.
9. Dark Cloud Cover Candlestick pattern
- A two candlestick pattern where the second candle closes below the midpoint up to 50% of the first at the resistance level.
- What It Means: Indicates a bearish reversal.
- How to Trade: Sell when the second candle confirmed closed below up to 50% of the first candle.
10. Three Black Crows Candlestick pattern
Three consecutive long bearish candlestick pattern which is dropping from the resistance level.
- What It Means: Signals a strong bearish trend reversal.
- How to Trade: Sell when the pattern is confirmed. Set stop loss above this candle and take profit above the previous low.
Reversal Candlestick Patterns
Reversal candlestick patterns are signals that the market trend is about to change direction. These candlestick patterns are crucial because they help you spot when the trend is shifting, allowing you to enter or exit a trade at the right time. Recognizing this reversal candlestick pattern is a valuable skill in trading, as it helps you stay ahead of market changes and make better trading decisions.
11. Doji Candlestick Pattern
A single candlestick pattern with a very small body and wick on both sides.
- What It Means: Indicates market indecision.
- How to Trade: Wait for confirmation from the next candle. If the market is bullish and the next candle closes below the Doji candle, it’s the best sell signal.
12. Dragonfly Doji Candlestick Pattern
A candle like a Doji candlestick pattern, but it has a long lower wick and no upper wick over the candle body.
- What It Means: Signals a strong bullish reversal.
- How to Trade: Buy when the next candle closes above the Dragonfly candle
13. Gravestone Doji Candlestick Pattern
The opposite of a dragonfly candlestick pattern, this pattern is present with a long upper wick and no lower wick below the body.
- What It Means: Signals a potential bearish reversal.
- How to Trade: Sell when the next candle closes below the Gravestone doji candle.
14. Inverted Hammer Candlestick Pattern
A single candlestick pattern with a small body and a long upper wick. Always formed at support level, and indicate a strong reversal.
- What It Means: Signals a strong bullish reversal.
- How to Trade: Buy when the next candle closes above the inverted hammer candle
15. Hanging Man Candlestick Pattern
A single candlestick pattern, which is present with a small upper body and a long lower wick. Created always at the resistance level, and indicate a strong bearish trend.
- What It Means: Signals a strong bearish reversal.
- How to Trade: Sell when the next candle closes below the hanging man candle.
Advanced Candlestick Patterns for Crypto, Forex And Stock Trading
For experienced traders, these Candlestick patterns offer deeper insights into market behavior.
16. Bullish Harami Candlestick Pattern
A two candlestick pattern where the second candle is completely inside the first. This candle formed at support level.
- What It Means: Signals a strong uptrend reversal.
- How to Trade: Wait for confirmation from the next candle. If it closes above the previous candle, it’s a confirmation of a buy signal.
17. Bearish Harami Candlestick Pattern
A two candlestick pattern at the resistance level where the second candle is completely inside the first. This candle was created at the resistance level.
- What It Means: Signals a strong bearish trend reversal.
- How to Trade: Wait for confirmation from the next candle. If it closes below the previous candle, so it’s a confirmation of a sell signal.
18. Tweezer Bottoms Candlestick Pattern
Two candlestick patterns where the candles have the same lows (tweezer bottom).
- What It Means: Signals a strong bullish trend reversal.
- How to Trade: Trade in the direction of the reversal. Look at the area of support. Tweezer bottom will be formed at the support level.
19. Tweezer Top Candlestick Pattern
Two candlestick patterns where the candles have the same low (tweezer top) or high (tweezer bottom).
- What It Means: Signals a strong down trend reversal.
- How to Trade: Trade in the direction of the reversal. Look at the area of resistance. Tweezer top will be formed at the resistance level.
20. Three Inside Up Candlestick Pattern
Three candlestick patterns in which the first candle is bearish, then the 2nd candle closed above up to 50% from the previous candle, and the 3rd candle closed above both of the previous candles. This will always be formed at support level.
- What It Means: Indicates a bullish trend reversal.
- How to Trade: Trade in the direction of the trend. If it’s formed at support level, so it’s a strong bullish signal.
21. Three Inside Down Candlestick Pattern
Three candlestick patterns in which the first candle is bullish, then the 2ndcandle closed below up to 50% from the previous candle, and the 3rd candle closed below both of the previous candles. This will always be formed at the resistance level.
- What It Means: Indicates a trend reversal.
- How to Trade: Trade in the direction of the trend reversal. This will mostly form at the resistance level
22. Bullish Abandoned Baby Candlestick Pattern
A rare three candlestick pattern that signals a strong reversal. In this three-candlestick pattern, the middle candle opened and closed below the first and 3rdcandle
- What It Means: Indicates a strong trend reversal.
- How to Trade: Trade when this pattern is formed at support level. Keep your stop loss below and take profit at the previous high.
23. Bearish Abandoned Baby Candlestick Pattern
A rare three candlestick pattern that signals a strong bear reversal. In this three-candlestick pattern, the middle candle opened and closed below the first and 3rdcandle
- What It Means: Indicates a strong bearish trend reversal.
- How to Trade: Trade when this pattern forms at a resistance level. Keep your stop loss above this candle and take profit at the previous low.
Best Timeframes to Trade with Candlestick Patterns
Candlestick patterns work on all timeframes, but you should match the timeframe to your trading style.
- Scalpers may prefer the 1-minute or 5-minute chart.
- Day traders usually watch the 15-minute or 1-hour charts.
- Swing traders often stick to the 4-hour or daily timeframe.
-
Long-term investors look at weekly or monthly charts.
Choose a timeframe that fits your goals, and always use the same one when spotting patterns.
In Which Market Conditions Do Candlestick Patterns Work Best?
These candlestick patterns work best in trending markets, either going up or down. In a strong trend, patterns like the hammer or shooting star can give great signals. However, in a sideways (range-bound) market, patterns can be misleading. Price may fake out in one direction and quickly reverse. For best results, use candlestick patterns with trendlines, moving averages, or support/resistance levels. This helps filter out false signals.
Things Candlestick Patterns Can’t Always Tell You
Candlestick patterns are helpful, but they’re not magic. They don’t predict news events, big economic releases, or how much volume is behind a move. Sometimes a pattern may look perfect, but fail because of external events or low trading volume. That’s why you should never rely on them alone. Use them as part of your bigger trading plan, not as your only signal.
How to Use Candlestick Patterns in Your Trading
- Identify the Pattern: Use your trading platform to spot candlestick patterns.
- Set Stop-Loss and Take-Profit Levels: Use the pattern’s structure to determine these levels.
- Back test Your Strategy: Test this candlestick pattern in the real market to check the accuracy of these patterns.
How to Use Candlestick Patterns with Other Technical Indicators?
The best way to boost the power of candlestick patterns is by combining them with other tools.
- Use RSI to check if the market is overbought or oversold.
- Try moving averages to confirm if the market is trending.
-
Watch volume indicators to see if the price move has strength.
For example, if you see a bullish pattern at a support level and RSI is showing oversold, that’s a stronger trade setup.
How to Use Candlestick Patterns with Other Technical Indicators?
The best way to boost the power of candlestick patterns is by combining them with other tools.
- Use RSI to check if the market is overbought or oversold.
- Try moving averages to confirm if the market is trending.
-
Watch volume indicators to see if the price move has strength.
For example, if you see a bullish pattern at a support level and RSI is showing oversold, that’s a stronger trade setup.
Can We Really Trust Candlestick Patterns?
Candlestick patterns are powerful, but they’re not always right. They work best when used in the right context, with support from other tools. If you treat them as a small piece of your overall strategy, not the entire strategy, you’ll find they’re a helpful guide. Like anything in trading, it’s about combining different tools and practicing until your confidence grows.
What Is the Success Ratio of Candlestick Patterns Strategy?
Candlestick patterns don’t work 100% of the time, but many traders say they win around 55% to 65% of trades using them with proper confirmation. The actual success rate depends on how you use them. For example, if you blindly trade every pattern you see, your win rate may drop. But if you combine patterns with trend analysis, support/resistance, or technical indicators like RSI or MACD, your chances improve. Remember, the goal in trading isn’t to win every trade — it’s to win more than you lose and manage risk well. A 60% win rate with a proper stop-loss can still be very profitable.
So yes, candlestick strategies can work if you stay patient, filter signals, and follow a plan.
How the 5-Minute Candlestick Strategy Works for Traders
- The 5-minute candlestick strategy is great for day traders and scalpers who want quick trades. Here’s how it works: you look at 5-minute candlestick charts and wait for strong patterns like engulfing, doji, or hammer near key support or resistance zones.
- Once the pattern forms, you confirm it with an indicator like volume or RSI, then take a quick trade.
- The 5-minute chart moves fast, so it’s important to use tight stop-losses and aim for small but frequent profits.
- It’s perfect for fast decision-makers who prefer short-term trading. But since it moves quickly, always practice on a demo account first and make sure you have a clear plan.
Understanding the 3-Candle Rule in Simple Words
- The 3-candle rule is a smart way to avoid rushing into trades. It means you wait for three candles to confirm a move instead of jumping in too early.
- For example, if you see a bullish reversal pattern, wait for three candles in the same direction before entering the trade. This helps confirm that the trend is real, not just a quick bounce or fake move.
- This rule reduces false signals and gives you more confidence in your entries. It’s often used by traders who follow candlestick patterns with trendlines or indicators.
- Waiting for three candles might mean missing the exact bottom or top, but it improves your chances of success by avoiding quick traps.
Frequently Asked Questions (FAQs)
What are candlestick patterns?
Candlestick patterns are visual formations on price charts that reflect market psychology. They help traders predict bullish, bearish, or reversal trends in stocks, forex, or crypto.
Are candlestick patterns accurate and trustworthy?
Yes, when combined with other strategy like support and resistance or trend-lines. Patterns like bullish engulfing or hammer are highly effective for spotting reversals.
What are the best candlestick patterns for beginners?
Start with hammer, shooting star, and doji—simple patterns for spotting trend reversals. Check our candlestick patterns cheat sheet for quick reference.
What’s the difference between bullish and bearish candlestick patterns?
Bullish patterns (e.g., hammer) signal price rises, while bearish patterns (e.g., shooting star) predict downtrend. Learn both in our candlestick patterns cheat sheet.
Where can I learn all candlestick patterns?
Start with candlestick patterns for beginners guides or books like "Japanese Candlestick Charting Techniques". Practice using our candlestick chart patterns PDF!
Conclusion
Candlestick patterns are a powerful strategy for traders. By learning and practicing these 23 powerful candlestick patterns, you’ll be better trained to analyze the markets in 2025 and future years. Whether you’re trading stocks, forex, or crypto, these patterns can help you make smarter, more informed decisions.
“Trade with Confidence, Trade with Heist!” Heist Trader wishing you Happy-trading!