Candlestick Patterns: Complete Guide with Examples

Table of Contents Candlestick Basicsbasics Single Candlestick Patternssinglepatterns TwoCandlestick Patternstwopatterns ThreeCandlestick Patternsthreepatterns Trading Candlestick Patternstrading Pattern Confirmationconfirmation Common Mistakesmistakes Pattern Reliabilityreliability Getting Startedgettingstarted Candlestick patterns are one of the most powerful tools in technical analysis, providing visual insights into market psychology and potential price movements. Developed in 18th century Japan, these patterns remain highly relevant today because they reveal the eternal battle between buyers and sellers. This guide covers the most reliable candlestick patterns, how to identify them, and how to trade them profitably. :::tip Why Candlesticks Work: Candlestick patterns work because they reveal market psychology—fear, greed, indecision, and conviction. These emotions drive price, and they appear in recurring patterns. ::: Candlestick Basics Review Before learning patterns, ensure you understand candlestick structure. Anatomy of a Candlestick The Body: Rectangle showing opentoclose range Green/White = Bulls won close open Red/Black = Bears won close < open The Wicks Shadows: Upper wick = High of period Lower wick = Low of period Show price rejection What Candlesticks Reveal Large Body: Strong conviction Clear winner buyers or sellers Momentum Small Body: Indecision Balance between buyers and sellers Potential reversal Long Wicks: Price