Candlestick Patterns Cheatsheet: 15 Essential Patterns Every Trader Should Know

Single-Candle Reversal Patterns

Doji

A candle where open and close are virtually equal, creating a thin or absent body with wicks on both sides. It represents indecision -- neither buyers nor sellers gained control. After a prolonged uptrend, a doji suggests bullish momentum is fading and a reversal may be coming. After a downtrend, it suggests selling pressure is exhausted. The long-legged doji (long upper and lower wicks) signals extreme indecision. The gravestone doji (long upper wick, no lower wick) is bearish at market tops. The dragonfly doji (long lower wick, no upper wick) is bullish at market bottoms.

Hammer

A candle with a small body at the upper end and a long lower wick at least twice the body length. The hammer appears after a downtrend and signals a potential bullish reversal. The long lower wick shows that sellers pushed prices down during the session, but buyers fought back and drove prices back up to close near the open. The rejection of lower prices is the key signal. The counterpart is the hanging man -- identical in shape but appearing after an uptrend, signaling a potential bearish reversal. The difference between hammer and hanging man is entirely based on context (prior trend direction).

Inverted Hammer

A candle with a small body at the lower end and a long upper wick at least twice the body length. Appearing after a downtrend, it signals potential bullish reversal. The long upper wick shows buyers attempted to push higher but sellers pushed back -- however, the fact that buyers tried at all after a downtrend is the bullish signal. The shooting star is the same shape appearing after an uptrend and is bearish. Both follow the same principle: after a trend, an attempted move in the opposite direction that fails to close at the extreme suggests weakening momentum. Use support and resistance levels to confirm candlestick reversals →

Two-Candle Reversal Patterns

Bullish Engulfing

A two-candle pattern where a small bearish (red) candle is followed by a larger bullish (green) candle that completely engulfs the body of the previous candle. The pattern appears after a downtrend. The small bearish candle shows continued selling, but the next day opens near the close and then rallies to completely engulf the prior day's range. This shows a clear shift in momentum from sellers to buyers. The larger the engulfing candle, the stronger the signal. Look for high volume on the engulfing day to confirm the reversal.

Bearish Engulfing

The opposite of bullish engulfing. A small bullish candle is followed by a larger bearish candle that engulfs the prior body. Appears after an uptrend. The failure of bulls to sustain the advance and the sudden aggressive selling that reverses all of the prior day's gains is a powerful bearish signal. Like all reversal patterns, bearish engulfing is more reliable when it appears at established resistance levels or after an extended move, and when confirmed by volume or divergence on momentum indicators. Confirm engulfing patterns with RSI divergence →

Piercing Pattern

A two-candle bullish reversal pattern appearing after a downtrend. The first candle is long and bearish. The second candle opens lower (a gap down) but then rallies to close above the midpoint of the first candle's body. This shows that sellers pushed price down at the open but buyers stepped in aggressively and recovered more than half of the prior day's loss. The deeper the second candle closes into the first candle's body, the more significant the reversal. This pattern is the bullish equivalent of the evening star's first two candles but is a signal on its own.

Dark Cloud Cover

The bearish counterpart to the piercing pattern. Appears after an uptrend. The first candle is long and bullish. The second candle opens higher (a gap up) but then closes below the midpoint of the first candle's body. This shows that bulls pushed prices higher at the open but could not hold those gains, and sellers drove prices back down. The dark cloud cover signals potential trend exhaustion and a bearish reversal. A close below the first candle's open (full engulfing) is a stronger bearish signal. Confirm dark cloud cover with moving averages →

Three-Candle Reversal Patterns

Morning Star

A three-candle bullish reversal pattern at the end of a downtrend. The first candle is a long bearish candle showing continued selling pressure. The second candle is a small-bodied candle (doji or spinning top) that gaps below the first candle, showing indecision. The third candle is a long bullish candle that closes at least halfway up the first candle's body. The pattern shows momentum transitioning from bearish (first candle) to indecisive (second candle) to bullish (third candle). The morning star is one of the most reliable reversal patterns, especially after a prolonged downtrend.

Evening Star

The bearish counterpart to the morning star. Appears after an uptrend. The first candle is a long bullish candle. The second candle is a small-bodied candle that gaps above the first candle, signaling exhaustion. The third candle is a long bearish candle that closes at least halfway down the first candle's body. The evening star at the top of an uptrend is a powerful bearish reversal signal. Like the morning star, its reliability increases when the third candle's close penetrates deep into the first candle's body.

Three White Soldiers

Three consecutive long bullish candles, each closing higher than the previous and near its high. Each candle opens within or near the prior candle's body and closes at a new high. This pattern appears after a downtrend or consolidation and signals a strong bullish reversal with sustained buying pressure. The pattern is most reliable when the candles are of similar size -- an unusually long third candle (exhaustion) can suggest the move is overextended. Three white soldiers indicate that buyers are in firm control and the trend has likely turned bullish.

Three Black Crows

The bearish counterpart to three white soldiers. Three consecutive long bearish candles, each closing lower than the previous and near its low. Each candle opens near the prior close and sells off to a new low. This pattern after an uptrend signals a strong bearish reversal with sustained selling pressure. Three black crows indicate that sellers have taken control and the uptrend has likely ended. Look for these at resistance levels or after extended rallies for the most reliable signals. Integrate candlestick reversals with trend-following strategies →

Continuation Patterns

Rising Three Methods

A bullish continuation pattern. In an uptrend, a long bullish candle is followed by three small bearish candles that trade within the first candle's range (typically closing lower but staying above the first candle's low). A fifth candle then breaks above the first candle's high and closes strong. The pattern shows a healthy pullback within an uptrend -- sellers cannot push price below the initial bullish candle's range, and then buyers resume control and push price to new highs. This is one of the most reliable continuation patterns.

Falling Three Methods

The bearish continuation counterpart to rising three methods. In a downtrend, a long bearish candle is followed by three small bullish candles that trade within the first candle's range. A fifth candle then breaks below the first candle's low. The small bullish candles represent a dead-cat bounce within the downtrend -- the inability to break above the initial bearish candle's range confirms bearish control. The pattern resolves when sellers reassert themselves and push price to new lows. Use Bollinger Bands to spot candlestick pattern breakouts →

How reliable are candlestick patterns?

Candlestick patterns are probabilistic tools, not guarantees. Research shows that some patterns (morning star, evening star, bullish engulfing) have 60-70% success rates in trending markets when confirmed by volume or other indicators. Patterns are most reliable on daily and weekly timeframes and less reliable on intraday charts. Context matters enormously -- a pattern at support or resistance is far more significant than one in the middle of a range. Always use candlestick patterns in conjunction with other forms of analysis.

Which candlestick pattern is the strongest?

The morning star and evening star patterns are generally considered the most reliable reversal patterns, especially on daily charts. The bullish and bearish engulfing patterns are also highly reliable. The doji is a less reliable standalone signal but valuable as a warning that a trend may be losing momentum. Three white soldiers and three black crows are strong conviction signals when they appear. The key is not memorizing every pattern but understanding the psychology behind each formation and confirming with volume, support/resistance, and momentum indicators.

Can you trade candlestick patterns alone?

Trading candlestick patterns alone is risky. Patterns indicate probable direction but say nothing about magnitude or timing. Combining patterns with trend analysis, support/resistance levels, volume, and momentum indicators dramatically improves results. For example, a bullish engulfing at a major support level with above-average volume and RSI divergence is a much stronger signal than a bullish engulfing in the middle of a trading range. Treat candlestick patterns as a filter, not a standalone system.

What timeframe is best for candlestick patterns?

Daily and weekly charts produce the most reliable signals because they represent aggregated market sentiment over meaningful periods. Hourly and 4-hour charts can be useful for swing trading. Patterns on 5-minute or 15-minute charts are noisy and less reliable -- they produce many false signals. A good rule: the higher the timeframe, the more significant the pattern. A morning star on a weekly chart is a major signal; the same pattern on a 5-minute chart might reverse within the hour. Use multiple timeframes to filter false signals →

Related Resources