All Candlestick Patterns Chart: A Complete Guide

Imagine unlocking the code to predicting the market’s next move. Candlestick patterns provide precisely that kind of insight—visual representations of price movement that signal trends, reversals, and continuations. Understanding these patterns can transform your trading strategy from luck-based to data-driven. In this article, we’ll guide you through every major candlestick pattern, diving deep into their meaning, and the psychological forces behind them.

Candlestick Charts: Why Traders Swear By Them

Candlestick charts offer more than just price direction. They tell a story of buyer-seller dynamics, illustrating the psychology of the market. Each candle represents price movement over a defined time period. The candle body displays the opening and closing price, while the wicks (or shadows) show the price highs and lows.

For traders, the beauty of candlestick patterns lies in their ability to predict future movements. Whether you're day trading, swing trading, or scalping, these patterns provide an intuitive visual tool for spotting opportunities. Now, let’s dive into these patterns.

Bullish Candlestick Patterns: When the Bulls are in Charge

When the market shows signs of reversal from a downtrend, bullish candlestick patterns act as early indicators that prices might start rising. Below are some of the most widely recognized bullish patterns:

1. Hammer
   The hammer is a one-candle pattern that signals a potential bottom of a downtrend. It features a small body with a long lower wick, indicating that despite selling pressure, buyers stepped in and pushed prices back up. If this candle forms after a sustained downtrend, it suggests that a reversal is likely.

2. Bullish Engulfing
   This two-candle pattern signals a reversal of a downtrend. The first candle is a bearish one (a downward candle), followed by a larger bullish candle that “engulfs” the previous candle. This indicates that buying pressure has overwhelmed selling pressure, and the market is likely to shift upwards.

3. Morning Star
   A three-candle pattern, the morning star consists of a long bearish candle, a small-bodied candle (which can be bullish or bearish), and a long bullish candle. This pattern signifies that after a period of selling pressure, the market has changed direction, and buyers have regained control.

4. Three White Soldiers
   This pattern consists of three consecutive long bullish candles. Each candle opens within the previous one’s body and closes near its high, indicating strong buyer momentum. This pattern is a powerful signal that an uptrend is underway.

5. Piercing Line
   The piercing line is a two-candle pattern. The first candle is bearish, followed by a bullish candle that opens below the previous candle’s low and closes at least halfway into its body. This pattern suggests that bulls are starting to take control after a period of bearish activity.

Bearish Candlestick Patterns: When the Bears Take Over

Bearish candlestick patterns signal the potential end of an uptrend and the start of a downward movement. Here are some of the most common bearish patterns:

1. Shooting Star
   A shooting star has a small body near the candle’s low with a long upper wick. This one-candle pattern forms after an uptrend and indicates that buyers tried to push prices higher but were met with strong selling pressure, suggesting a potential reversal.

2. Bearish Engulfing
   The bearish engulfing is a mirror of the bullish engulfing pattern. It consists of two candles: a bullish candle followed by a larger bearish candle that completely engulfs the previous one. This pattern signals that selling pressure is taking over, and a downtrend may be on the horizon.

3. Evening Star
   The evening star is a three-candle pattern, often seen at the top of an uptrend. It consists of a long bullish candle, followed by a small-bodied candle, and ends with a long bearish candle. This pattern indicates that the uptrend has lost momentum, and a reversal is likely.

4. Three Black Crows
   The three black crows pattern is the bearish counterpart to the three white soldiers. It consists of three long bearish candles that open within the previous candle’s body and close near their lows. This pattern signals strong selling pressure and the start of a downtrend.

5. Dark Cloud Cover
   This two-candle pattern consists of a bullish candle, followed by a bearish candle that opens above the previous high but closes below the midpoint of the first candle. The dark cloud cover pattern suggests that the bulls have lost control, and the bears are taking over.

Doji Candlestick Patterns: Indecision in the Market

Doji patterns occur when the opening and closing prices are nearly equal, creating a cross-shaped candle. These patterns represent indecision in the market and can signal reversals or continuations depending on the context.

1. Doji
   A standard Doji indicates a tug-of-war between buyers and sellers, resulting in no significant price movement. If this pattern occurs after a sustained trend, it could indicate a potential reversal.

2. Dragonfly Doji
   A dragonfly Doji has a long lower wick and no upper wick, resembling a “T” shape. This pattern suggests that sellers were initially in control, but buyers stepped in and drove the price back up. It often signals a bullish reversal.

3. Gravestone Doji
   This pattern is the opposite of the dragonfly Doji, with a long upper wick and no lower wick. The gravestone Doji suggests that buyers pushed the price higher, but sellers regained control. It can signal a bearish reversal.

4. Long-Legged Doji
   The long-legged Doji has long upper and lower wicks, indicating significant price movement during the session but ultimately closing near the opening price. This pattern reflects indecision and often appears before a major price move.

Continuation Patterns: When the Trend Goes On

Candlestick continuation patterns suggest that the current trend will continue after a brief pause or consolidation period. Let’s explore a few key continuation patterns:

1. Rising Three Methods
   This bullish continuation pattern consists of a long bullish candle, followed by three smaller bearish candles, and then another long bullish candle. The three smaller candles stay within the range of the first bullish candle, indicating a pause before the uptrend resumes.

2. Falling Three Methods
   The bearish counterpart of the rising three methods, this pattern consists of a long bearish candle, three smaller bullish candles, and a final long bearish candle. This pattern suggests a brief consolidation before the downtrend continues.

Rare but Powerful Candlestick Patterns

1. Abandoned Baby
   An abandoned baby pattern is a three-candle reversal pattern that can be bullish or bearish. It features a gap between the first and second candles, followed by a gap between the second and third candles. This pattern signals a sharp reversal in the current trend.

2. Three Inside Up/Down
   This three-candle pattern indicates a potential reversal. In a bullish version (three inside up), the first candle is bearish, followed by two bullish candles, with the last one closing above the first candle’s open. In a bearish version (three inside down), the pattern is reversed.

Conclusion: Mastering Candlestick Patterns

Candlestick patterns offer traders a visual roadmap to market sentiment, providing invaluable insight into potential price movements. By learning and mastering these patterns, traders can develop a more strategic and informed approach to their trades. However, no pattern is foolproof. It's essential to use candlestick patterns in conjunction with other technical indicators to confirm potential market moves.

Incorporating candlestick analysis into your trading can be the key to spotting trends early and making smarter trading decisions. Remember that practice makes perfect—use demo accounts to hone your skills before applying them in live trading environments.

Candlestick patterns are powerful tools, but they are just one part of a broader trading strategy. Always be sure to consider market context, risk management, and other factors when making trading decisions.